Building Victoria’s Road to Recovery
Our inaugural Be Summit 2020 kicked off with an address from Tim Pallas MP, Treasurer of Victoria with an insight into the opportunities for the construction sector to play a key role in the State’s economic recovery. Explore the key insights from the session!
If you missed the live session on Building Victoria’s Road to Recovery with Tim Pallas MP, Treasurer of Victoria, or would simply like a recap, here are the leading points that came out of the session from our inaugural Be Summit 2020.
Context: The Economic State of Victoria
“We find ourselves in one of the most challenging times in the last century, from both a health and economic perspective, it’s been an incredibly tough year for us in Victoria…” from the beginning of his discussion, this sentiment was clear from Tim Pallas MP, Treasurer of Victoria and Minister for Economic Development and Minister for Industrial Relations.
It is relevant before delving into construction specifically, to look back at the state of the economy before the pandemic hit. Victoria started 2020 in good shape economically, “the envy of the nation on the key fiscal metrics and the leading economy in the nation for 8 conservative quarters” states the Minister.
Due to the effects of 2020, Australia has recently entered a recession, which has ended over two decades of continuous economic growth. The Victorian unemployment rate may peak at 11% in the September quarter – a troubling reminder of the effects of the pandemic. 2020 has certainly caused disruption in small and medium businesses, but Pallas says that there is a cause for optimism going forward.
Victoria’s government has announced more than $13 billion to support the economy in response to COVID-19. This includes $6.5bn for business and job support and $2.7bn towards infrastructure projects.
Construction and Infrastructure during COVID-19
The Victorian government has been committed throughout the pandemic in keeping construction moving, knowing that the infrastructure pipeline is an investment that will drive economic activity and jobs.
“Our strategy has been to maintain construction sector activity and the pipeline, mobilise immediate quick start projects through stimulus, reform with new approaches to investment…Infrastructure has been the cornerstone of our success to date and will be central to our recovery” the Minister explained.
Stage 4 restrictions in Victoria did restrict construction slightly, however, Critical Construction Projects continued, alongside comprehensive COVID-Safe Plans. $107 billion Big Builds is the biggest project pipeline in the nation, including the North East Link, West Gate Tunnel Project, Metro Tunnel, and Level Crossing Removals.
Another aid to the Projects Pipeline, is an online portal recently developed by the Office of Projects Victoria, supporting the construction sector in their preparations to be a major part of project delivery across Victoria, and provides an open invitation for those within the construction sector to get involved.
Victoria’s Recovery Taskforce, which ensures permits continue at a steady pace has issued permits for the development value of more than $7 billion since March. The taskforce’s fast-track function will continue for at least the next 12 months to accelerate approvals during this recovery period.
Digital Strategies evolving
The Minister expressed excitement about the prospect of digital strategy within the construction sector going forward, especially that for Treasurers, this will give them more opportunity to control adjusted costs, and means they can make provision for those costs.
Pallas is confident that Victoria is at the forefront of developing and applying digital engineering assets, that ultimately the tools will improve the planning, design, delivery, and maintenance of major projects. This can include 3D models and rendering of projects, 3d visual, and 4D modelling to enhance project safer project delivery and cost-effective outcomes.
“For many built environment attendees today, infrastructure starts well before concrete pouring on a project,” says Tim, “I think there are so many things that we can do around our digital assets strategy, and particularly with BIM, and it will help business and people tendering for work…there will be a consistency of approach and there will be a greater opportunity for Project Managers to understand what the consequences of making adjustments to plans as they’ve been submitted during the running of the construction project…”
Essentially, a digital strategy will enable greater clarity to business throughout the construction process, consistency o tendering approach, and also the capacity to make changes along the way for bigger building projects and an understanding of what changes will cost for all those concerned – which will be important when it comes to economic recovery.
Social and Public housing, and Compliance issues
Tim Pallas recognised that COVID-19 has been a substantial crisis and that things may not be the same on the other side of the pandemic, but we could make it better, picking up some of the best change behaviors that have historically been neglected.
There were many questions from our virtual audience during the session, some of which – as expected – the Minister was unable to elaborate too much on during the session. In terms of Social and Public housing, Pallas stated that both of these will play a substantial part of the upcoming budget, and acknowledged that the government will need to be more aggressive in their actions within the sector.
Issues with building compliance also cropped up from the audience, the Minister said that he was aware of the profound failures within the built environment industry, for example, cladding problems, however, they had received great support from the public in recognizing the issues and thus being able to put in a program to get these fixed as quickly and efficiently as possible.
There is a collective responsibility for compliance, the industry and government will need to work together, to get better approval processes, there may be mistakes along the way but these have to be acknowledged, and everyone involved needs to remember that we are dealing with people’s homes and wellbeing.
Fast-tracking and the Future Role of Urban Areas
1 in 10 workers in the Victorian economy are within the construction industry, Pallas recognised that we cannot have a job-led recovery if we’re not helping the construction industry.
It sounds as though there is more capital investment to come, but Pallas was adamant that we need to make sure we are building a better society and not just a more economic infrastructure. To get people working again, this might mean shorter-term substantial investments in the economy to kickstart the construction workforce.
Although the Minister is optimistic about cities and central business spots, he said that until a vaccine is widely available, we will have to adopt COVID-safe practices, likely for the next 12 months. Putting in practices, even where there is no community transmission, as this readies people for any future outbreaks.
“There are many learnings that will tell us the future can be better…remote learning, working from home, digital connectiveness, our capacity to work together collegiately.”
It is possible we could also see a population shift towards regional areas in the future, and the government wants to make that attractive and connect Victorians to the economic opportunities available that may have previously only been focused on CBDs.
The road towards ‘COVID-normal’
“We in Victoria have adopted a staged approach to restrictions…we’ve come too far and worked too hard for this to come to nothing,” says Pallas. “Victorian have dug deep and have pulled together to get through it, that resilience will help us now on the economic front.”
Thanks to the hard work of Victorians, hopes that the state can find the right balance and reach ‘COVID normal’ by Christmas. Throughout the session it is obvious that the Minister, although looking towards COVID-normal, that he wants Victorians to strive towards something better than what we had before the pandemic.
“We need to recognise that we have an opportunity to make a profound change”
“Rest assured that we will leave no stone unturned during our economic recovery, we will pursue every single option possible to get Victoria back to the position of being the envy of all other states when it comes to economic growth, job creation, liveability, and cultural experience.”
Jamila Rizvi, Author, presenter & political commentator (Be Summit MC)
Tim Pallas MP, Treasurer of Victoria, Minister for Economic Development and Minister for Industrial Relations