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Red-tape reduction to help smaller builders

Small time builders operating in regional areas stand to benefit from changes to the tender process for construction projects fully or partly funded by the government.

As part of its drive to slash red tape, the Coalition is easing requirements under the Australian Government Building and Construction OHS Accreditation Scheme in order to benefit small business and re-charge regional economies.

Builders will no longer be required to be accredited under this scheme when bidding for a government tender for single dwelling projects or multi-unit projects worth less than $4 million.

According to The Australian, the Prime Minister’s Parliamentary Secretary Josh Frydenberg will announce the measure ahead of next week’s red-tape appeal day which will see a further 1000 regulations axed on top of the 10,000 scrapped in March.

Currently, only those operators accredited under the scheme (run by the Federal Safety Commissioner) are eligible to enter into head contracts for government funded building projects.

However, for smaller construction businesses, meeting this requirement imposes significant additional costs and sometimes necessitates the employment of additional staff to ensure compliance.

Larger businesses more easily able to absorb the compliance costs are usually chosen and can charge more for the job. This often precludes local builders from working on government jobs.

Defence Housing Australia (DHA) has welcomed the relaxation of the rules. Based on estimates from residential developments undertaken by DHA, the accreditation compliance costs were costing the government up to $15,000 more per dwelling.

Many defence housing projects are located in rural areas, with local operators being sidelined while larger operators bring in workforces from elsewhere. DHA said the relaxation of the rules would now open up “construction tenders to a multitude of small businesses across the country.”

“This policy change will directly, and significantly, increase the number of builders able to respond to DHA’s construction tenders,” said DHA Managing Director Peter Howman.

“The requirement to engage a Federal Safety Commission (FSC) accredited contractor has restricted DHA’s business by reducing the size of the eligible tender market and lowering the likelihood that we will get the best value product at the best price.”

“In 2014/15, non-FSC accredited builders were excluded from tendering for more than 500 houses around Australia. Removal of this limitation would be expected to have saved us more than $9 million. Similar savings, should be expected for future years.”

“It will bring greater competition, reduce costs to DHA and make work available to more builders across the country,” Mr Howman said. “We look forward to working with more builders, many of them small businesses, who up until now had been unable to partner with us.”


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Joe Kelly

Joe Kelly

Joe Kelly is a writer for Dynamic Business. He has previously worked in the Canberra Press Gallery and has a keen interest in business, the economy and federal policy. He also follows international relations and likes to read history.

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