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Impact of Industrial Action by the Electrical Trades Union on Housing Construction in New South Wales

This research paper examines the significant impact of the ongoing industrial action by the Electrical Trades Union (ETU).

This research paper examines the significant impact of the ongoing industrial action by the Electrical Trades Union (ETU) on the construction of 1600 homes and several large warehouse projects in New South Wales (NSW). The industrial action, driven by a push for a substantial 24% pay rise, involves 750 ETU members employed by Endeavour Energy, a company in which the NSW government holds a 50% stake. Despite the state’s proclaimed prioritisation of new housing construction, the government has not intervened in the dispute. The paper discusses the broader economic and social repercussions of the delayed construction projects, the role of the government in resolving industrial disputes, and the strategic responses by affected stakeholders, including prominent property developers such as Mirvac, Lendlease, and Greenfields Developments.

Introduction

The construction sector in New South Wales is facing unprecedented delays and financial losses due to prolonged industrial action by the Electrical Trades Union (ETU) against Endeavour Energy. This strike has significantly disrupted the timeline of various housing and warehouse projects. The conflict arises amidst the ETU’s demand for a 24% pay increase over an unspecified period, with the union’s refusal to engage in necessary powerline disconnections causing extensive project delays. Despite the NSW government’s 50% ownership stake in Endeavour Energy and its stated commitment to facilitating new housing developments, there has been no governmental intervention to date.

Background and Context

Endeavour Energy and its Role in NSW Construction

Endeavour Energy is a crucial player in the energy distribution sector in NSW, responsible for the maintenance and operation of power lines essential for both existing and new constructions. The company’s operations directly impact the progress of construction projects, particularly those requiring scheduled power outages for safety during construction activities.

 

Industrial Action by the Electrical Trades Union

Since February, ETU members at Endeavour Energy have initiated industrial action by refusing to attend scheduled appointments for disconnecting power lines at construction sites. This has resulted in significant delays, with each missed appointment pushing project timelines by approximately two months. The industrial action stems from the union’s push for a substantial pay rise, reflecting broader discontent within the workforce regarding remuneration and working conditions.

 

NSW Government’s Position

Despite owning a 50% stake in Endeavour Energy, the NSW government has yet to take a decisive role in resolving the industrial dispute. This inaction contrasts with its publicly stated priority of accelerating the construction of new homes to address the state’s housing shortage.

Impact on Construction Projects

Residential Developments

The industrial action has delayed the construction of 1600 homes, severely impacting developers and potential homeowners. Prominent developers such as Mirvac, Lendlease, and Greenfields Developments have reported significant setbacks. Greenfields Developments, for instance, has faced delays in 400 housing lots valued at $280 million, with an additional 600 lots likely to be affected if the dispute continues.

 

Commercial Developments

In addition to residential projects, large-scale commercial projects, including warehouses owned by ASX-listed property giants like Goodman Property Services and Charter Hall, have also been affected. These delays are adding millions of dollars in extra costs, significantly impacting the financial bottom lines of these major players in the property market.

Economic and Social Repercussions

Financial Costs

The delays have imposed substantial financial burdens on developers and the broader economy. Each missed appointment for power disconnection not only delays the construction process but also increases costs related to extended project timelines, resource reallocation, and contractual penalties.

 

Housing Supply and Affordability

The industrial action exacerbates the housing supply crisis in NSW. With the delay in the construction of 1600 homes, the availability of new housing stock is significantly hampered, likely driving up housing prices and impacting affordability for potential homeowners.

Stakeholder Responses and Strategic Adaptations

Property Developers

Developers affected by the delays have had to navigate the challenges by rescheduling projects, renegotiating contracts, and exploring interim solutions to mitigate the impact of the ongoing industrial action. Companies like Greenfields Developments have publicly voiced their concerns, urging for a resolution to the dispute.

 

Government’s Role

The NSW government’s inaction despite its ownership stake in Endeavour Energy raises questions about its commitment to addressing the housing shortage. The government’s intervention could potentially expedite the resolution of the dispute, aligning with its broader housing priorities.

Conclusion

The industrial action by the ETU against Endeavour Energy has profound implications for the construction sector in NSW, affecting both residential and commercial developments. The delays have not only added financial strain to developers but have also contributed to the ongoing housing supply crisis in the state. The NSW government’s lack of intervention, despite its significant stake in Endeavour Energy, highlights a critical disconnect between policy priorities and practical outcomes. Resolving this dispute promptly is essential to mitigating its economic and social impacts and aligning with the state’s housing objectives.