Infrastructure projects delayed across NSW due to labor shortages

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The local, state and private sectors are all competing for qualified candidates from a very small pool, resulting in months-long delays to infrastructure projects across the NSW region.

Lockhart Shire Council chief executive Peter Veneris said there have been delays affecting his community in southern New South Wales, although no grant-funded projects have been scrapped in due to the shortage of workers.

“We’re struggling to find contractors and I’m sure we’re competing for a lot of the same contractors with lots of other councils around us,” he said.

“The biggest impact is simply the delay in completing the project and what that means for local communities, especially when it comes to a project on recreation ground or other facilities where it’s really is the focal point of the community.”

Infrastructure boom

A recent report from Business NSW highlighted that the Riverina-Murray region has over $20 billion in major infrastructure projects underway.

Six of these projects, Snowy 2.0, Inland Rail, Project Energy Connect, Snowy 2.0 Connect, VNI West and HumeLink, have been estimated at over $14 billion and require over 5,000 workers during construction.

A map of 36 major infrastructure and renewable energy projects. (Provided: Business NSW)

The report called the Riverina-Murray area “a canary in the coal mine for the NSW region”, with so many projects under construction at the same time, in an already tight labor market.

“The Riverina-Murray is already struggling to meet business needs for skilled workers and to provide enough accommodation,” said Anthony McFarlane of Business NSW.

“These pressures, while keenly felt in this region, can be found in almost all parts of NSW.”

Rachael Whiting of Regional Development Australia Riverina said while the infrastructure boom would benefit the region, the projects would contribute to worsening labor and housing shortages.

“What we’re seeing is very similar to what we’ve seen in resource booms in mining communities in the past,” Ms. Whiting said.

“Labour shortages, housing prices, lack of housing, it’s like what we’ve seen in these communities, but it’s not in mining communities for the first time in the Australian history.

Competition for workers

Riverina Eastern Regional Organization of Councils CEO Julie Briggs said there were severe skills shortages in areas such as truck driving, earthmoving, engineering and town planning.

“Our councils are now competing with some of these large infrastructure projects for people…where the large infrastructure projects are very well resourced and probably in a much better position to recruit than our councils,” he said. she declared.

A dark-haired woman in a black and white jacket speaks in front of microphones
REROC CEO Julie Briggs said councils were considering a range of options to deal with the shortage.(Provided: Julie Briggs)

“Councils are being forced into a corner where they have to pay higher salaries.

“But they’re pegged to rates, so to pay higher salaries to get staff they either have to cut services or cut staff in other areas to try and get a balanced budget.

“It’s a real dilemma.”

Ms Briggs said some councils were reporting delays of six months or more in delivering infrastructure projects.

Critical Shortage Allowance

An aerial shot of the Surfers Paradise skyline, buildings and beach
The City of Gold Coast introduced a critical shortage allowance in 2019 to attract skilled workers.(ABC Gold Coast: Dominic Cansdale )

Ms Briggs said councils across Australia, including the City of Gold Coast, had a flexible pay policy in place for essential skills.

It allows them to pay up to 25% on top of a base salary to attract people with essential skills.

“If councils want to stay competitive and the competitor is a private company that can deliver whatever they want, then councils need to take those kinds of steps, just like Gold Coast needs to address those shortages,” he said. she declared.

“I think more overseas workers might help alleviate the problem a bit in the short term, but in the longer term the councils are working hard to encourage people to consider a career in local government.”

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