Responding to the post federal budget scramble in the built environment

by Helena Morgan
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In light of the federal budget being handed down a few weeks ago, Facility Management spoke to experts in facility management, construction and engineering to gain insight into how the industry can guarantee safety and order at their facilities in the last six months of the year.

Additionally, our experts share how facility managers can diligently and sustainably respond to maintenance demands. They also explore the impact of budget allocations on housing and construction, and what these decisions reveal about climate responsiveness, engineering innovation, placement poverty and the cost-of-living crisis.

Engineers Australia CEO Romilly Madew

1. What are the triumphs and downfalls for engineering in the federal budget?

The 2024 federal budget brings both opportunities and challenges for the engineering sector. It’s great to see $19.7 billion allocated to establish Australia as a renewable energy superpower, focusing on hydrogen energy, green metals, solar and battery technology. These are essential for our sustainable future. However, the budget also highlights the ongoing issue of skills challenges in the profession, which could impact the rollout of these ambitious projects.

Further substantial investment in research and development (R&D) will be needed for the success of the Future Made in Australia agenda, and the government has signalled its intention to take a strategic look at our R&D system. Pumping significant resources into R&D for universities and research organisations like the CSIRO can drive innovation and support the development of cutting-edge technologies. This will attract talent and foster collaboration between universities, research institutions, industries and the government, enhancing Australia’s global competitiveness in technology and innovation.

2. In your statement, you confirmed that Engineers Australia supports federal budget funding announcements to accelerate the transition to net zero through support for solar, hydrogen, critical minerals, and batteries. Would you say there is still a long way to go in the pursuit towards a clean energy future and do you share Adam Bandt’s assessment that ‘Future Made in Australia’ is merely masquerading as an initiative to expand coal and gas?

We support the federal budget’s funding for renewable energy initiatives but it’s evident that achieving a clean energy future is a complex and long-term challenge.  While progress has been made, there’s still much work to be done to help speed up the transition to renewable energy. We understand Adam Bandt’s concerns and emphasise the need for transparency and genuine commitment to reducing reliance on fossil fuels. Continuous policy monitoring and adjustments are essential to ensure that initiatives like Future Made in Australia successfully contribute to a sustainable energy future. 

3. Although the planned $319.50 Commonwealth Prac Payment from 1 July of next year will alleviate stress and anxiety for those experiencing placement poverty, the organisation Students Against Placement Poverty label this amount insufficient. Do you share this view? In light of your recommendation for engineering students to also be included in these payments, what does greater support for engineering students and their families look like to you?

We recognise that while the $319.50 payment is a positive step, it might not be enough to fully tackle the financial struggles students face during placements. Financial aid, affordable housing options and mental health services would also help ease the burden. 

Targeted scholarships, paid internships and flexible work-study programs can help students and their families gain practical experience while lessening financial stress.

The federal government recognises that as a nation we have significant skills shortages, particularly in engineering. We will need even more engineers to achieve the government’s ambitious agenda – a practical step is to assist engineers to complete their qualifications and take up positions in their chosen fields. Making a similar payment to assist engineers during their placement is reasonable and a relatively cost-efficient step to take if our nation is serious about tackling skills shortages now and into the future.

4. You strongly encourage the development of a “detailed, collaborative plan for long-term infrastructure” in guaranteeing economic prosperity and also balancing the pursuit towards climate-responsiveness. What would this plan look like to you? Also, do you have a successful example of how engineering innovation could be nurtured to contribute to a sustainable economy?

A successful long-term infrastructure plan must involve collaboration between government, industry and community stakeholders. It should focus on sustainable development by incorporating renewable energy sources, resilient infrastructure and advanced technologies. Setting clear timelines, funding strategies and performance metrics is crucial for accountability and progress.

Green buildings that use energy-efficient materials and renewable energy systems, and reduce both carbon footprints and operational costs are an example of engineering innovation contributing to a sustainable economy. Engineers Australia’s 2023 Project of the Year, Boola Katitjin at Murdoch University by Aurecon in Western Australia, exemplifies this approach. As the state’s first mass-engineered timber building, it has gained global recognition for promoting sustainable, renewable and circular construction methods.

5. How do you think industries adjacent to engineering such as construction, architecture and urban planning can ensure they are meeting end-of-financial-year (EOFY) budget requirements while also attending to maintenance and improvement costs?

To meet EOFY budget requirements and tackle maintenance and improvement costs, sectors related to engineering should adopt proactive financial planning and project management strategies. This means regularly assessing and prioritising maintenance needs.

WPC Group group general manager Andrew Sezonov

1. What are the rewards and limitations of the federal budget allocations towards housing and construction? Do you think we are steering into perilous or promising territory?

Rising costs and competition for materials and labour, compounded by the cost-of-living crisis, make it challenging for young people to complete apprenticeships. The current funding and initiatives, while necessary, may not significantly impact the existing skills shortage. Broader industry coverage is needed. It starts with one apprentice, one trainee. Encouraging young people to consider a vocational educational pathway is a promising step forward.

2. Do you believe the government is failing other industries by only focusing on fee-free training positions in the housing and construction sector? If so, what measures could be put in place to mitigate the negative impacts of this alleged negligence of other industries?

It’s a sector that has required focus for a long time. Housing has consistently run in second place to the infrastructure sector. Over half (51%) of all current jobs require a VET qualification. The soaring demand in housing and construction is a long-term problem that will take years to rectify. Compelling evidence suggests that additional granular data should be collected to enable the government and other stakeholders to identify, understand and respond appropriately to key issues in the sector.

3. Could boosts such as those set to be announced on 18 June be applied to students in industries experiencing ‘placement poverty’? Although the planned $319.50 payment from 1 July of next year will alleviate stress and anxiety, Students Against Placement Poverty are saying this is an insufficient amount. 

Financial incentives for both employers and apprentices are important for improving completion rates. Apprentices – who often face financial challenges due to low wages – will benefit from even the smallest changes. These additional payments will help apprentices feel more confident in completing their placements. While the issue is ongoing and will take time to fully address, these measures represent progress.

 4. Is the $90 million allocated to cover the education costs of 20,000 more people seeking to study programs related to housing and construction an adequate and sustainable amount? 

The investment in 15,000 TAFE/VET places and 5,000 pre-apprenticeships is much needed, particularly in the housing and construction sector. While this investment may only make a small impact on the existing skills shortage, any improvement is valuable, especially as we continue to address pandemic-induced debt. 

Old Melbourne Gaol operations manager Kathleen Toohey

1. Do you see any rewards and limitations of the federal budget allocations towards tourism – budget funding decreases from the current $173 million to $170 million in 2024 to 2025. Are you wary of this decrease as the operations manager of a popular cultural tourism site or do you feel equipped?

I am aware of the decrease as a member of the Victorian Tourism Industry Council. I am disappointed to hear of the decrease but considering the current economic situation many Australians are facing right now, I am also grateful it wasn’t more.

I believe that the reduction will affect the growth of international tourism, which everyone will feel to an extent. However, the Old Melbourne Gaol will be unlikely to be directly affected. The nature of a private, not-for-profit means we are always dealing with limited resources, so we will ride the storm as we always do with the support of the public.

2. How do you think facilities and operations managers can ensure they are meeting EOFY budget requirements while also attending to maintenance and improvement costs?

One of the biggest key performance indicators (KPIs) of an operations role is to work within a budget, so this won’t be anything new, perhaps just a little extra tight, but always workable. The same rules would apply – monitor and be stringent where you can in order to ensure the essential is completed. Knowing your product and staff’s abilities are essential when it comes to making some financial decisions.

3. What are the biggest mistakes FMs and operations managers can make when responding to the budget-induced scramble to allocate costs, realign priorities and feel prepared for the last six months of the year?

Knowing when and where to spend money can be a fine art because there are times when you have to spend money to make money – cutting costs isn’t always the answer people assume it to be. It can ruin staff morale and reduce opportunity for growth and the quality of the product, which isn’t going to bring in money. Ensuring staff are kept well-informed, supported and in a positive mindset is very important.

4. How can FMs ensure their buildings and facilities are running smoothly, sustainably and safely for the last six months of the year?

Forward planning is key. Having pre-planned maintenance scheduled throughout the year as opposed to all at once provides some breathing room for potential unexpected issues down the line. This applies across the board. With all things spread out, opportunities to save on expenses can be seen and monitored for use down the track. This seems like a simple thing, but it can make all the difference.

Future Made in Australia Act posits hopeful clean energy future.

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