DECEMBER 2025 – FEBRUARY 2026
06 VISUAL FEATURE: ST KILDA PIER REDEVELOPMENT
19 INTEGRATED, FUTURE-FOCUSED, AND ICONIC
32 EMPOWERING DIGITAL TRANSFORMATION
38 NZS39102023: TWO YEARS ON
CONTENTS 2 CEO Letter 4 Q&A With AIQS President Fiona Doherty 6 Visual Feature: St Kilda Pier Redevelopment 12 Q&A – Why is it Important for an AIQS Member to Provide Tax Depreciation Schedules for Residential Investors? 15 The Magic of Elusive BIM and 5D 18 Early Contractor Involvement 19 Integrated, Future-focused, and Iconic: Complexity, Connectivity, and Commercial Vision 22 Emmanuel College St Paul’s Campus: Marianist Building
About The Built Environment Economist is the flagship publication of The Australian Institute of Quantity Surveyors (AIQS). Produced quarterly, the Built Environment Economist seeks to provide information that is relevant for quantity surveying and construction professionals, as well as asset owners. Subscribe At the AIQS website you can purchase a copy of this edition or subscribe for 12 months. ISSN 2652–4023
26 10 Cost Considerations When Estimating Off-form vs. Conventional Concrete 29 How a Lightweight Timber-Steel Hybrid Made an Impossible Extension Possible 32 Empowering Digital Transformation: Reimagining the Client’s Roles in Prefabricated Futures 35 Standard Method of Measurement: Why Not so Standard? 38 NZS39102023: Two Years On 41 From Inquiry to Inaction: Construction Insolvencies Over a Decade 44 Building Cost Index (print version only)
Contribute AIQS encourages readers to submit articles relating to quantity surveying, the built environment and associated industries including: construction economics, cost estimating, cost planning, contract administration, project engineering. If you would like to contribute, email marketing@aiqs.com.au.
Advertise Contact AIQS to discuss available opportunities. Georgia Baildon Brand Engagement Specialist T: +61 2 8234 4000 E: marketing@aiqs.com.au This edition was edited and designed by Georgia Baildon and overseen by Anthony Lieberman, Brand Engagement Manager.
Credits Images: Adobe Stock (unless otherwise stated). Cover images: Peter Clarke Photography. Disclaimer AIQS does not take any responsibility for the opinions expressed by any third parties involved in the writing of the Built Environment Economist.
CEO LETTER 2
BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026
CEO LETTER
At the time of writing, I have now been in the AIQS CEO position for over three months. I have really enjoyed meeting AIQS members at various chapter events and have of course been learning an enormous amount about all aspects of the Institute. Recently, I attended the conference of the Australasian Universities Building Education Association (AUBEA). AIQS is proud to be a sponsor of AUBEA; supporting and assisting the universities that provide the quantity surveying subjects in construction management degrees is vitally important. Promoting quality tertiary and ongoing education is critical for AIQS. It was wonderful to catch up with many people there including AUBEA President Srinath Perera MAIQS, former AIQS President Prof Anthony Mills FAIQS CQS, AIB CEO Robert Hunt, Prof (Adj) Robert Whittaker AM FAIQS, AIPM CEO Darius Danesh, University of Canberra Vice Chancellor Bill Shorten and many others.
It is projected to fall again to 1.6 per cent this financial year. This will be sufficient to lift work done to $345 billion, and will be driven largely by growth in residential building activity supported by expected lower interest rates in 2026. Growth is expected to pick up next financial year. Total building and construction work is projected to expand to $353 billion (+2.3 per cent). This will be supported by a belated recovery in business investment in building projects, especially in building large data centres, and sustained growth in demand, including from solid population growth. To access the forecasts, please log in to the AIQS website. You can find the November Australian Construction Market Report (ACMR) under Resources. If you would like to get more involved with AIQS or have any feedback that you would like to share, please reach out to me via jcameron@aiqs.com.au.
The Built Environment Awards were established to celebrate excellence, innovation, sustainability, and diversity across the built environment. Nominations have now closed, and the gala dinner will be held in Melbourne on Thursday, 28th May 2026. All industry professionals are invited to attend. The November 2025 Australian Construction Industry Forum (ACIF) Forecasts have recently been released and are available to MAIQS and FAIQS members. The forecasts project one more year of slower growth ahead. The Reserve Bank of Australia (RBA) has largely tamed inflation, but this has also lessened the growth in building and construction work. Growth in industry wide or total work done fell to 2.7 per cent last financial year.
DR JAMES CAMERON CEO The Australian Institute of Quantity Surveyors
BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026
3
INTERVIEW
Q&A WITH AIQS PRESIDENT FIONA DOHERTY FIONA DOHERTY BSC(HONS) FAIQS CQS FRICS
WHAT DOES THE QUANTITY SURVEYING PROFESSION MEAN TO YOU?
We sat down with newly-appointed AIQS President Fiona Doherty FAIQS CQS for an interview to share her visions and goals for her term as President. Fiona has served as a Director on the AIQS Board since 2019 and has more than 36 years of experience in the quantity surveying profession, playing key roles on construction projects across Australia, United Kingdom, Ethiopia, and Singapore. She has been a Director at Rider Levett Bucknall (RLB) for 11 years and has won multiple awards for outstanding achievements in her career.
For me, the quantity surveying profession is a cornerstone of responsible and efficient construction processes. It represents a unique blend of technical expertise, financial acumen, and strategic foresight. As quantity surveyors, we are entrusted with the planning and delivery of projects that maximise value for our clients. It’s a profession that demands integrity and precision, as our advice influences the decision and outcomes for clients, communities, and the environment.
Fiona’s appointment as President marks a historic moment for AIQS, as the first female President.
4
Quantity surveying is more than the numbers, it’s about being part of the teams that shape the built environment in a way that is equitable, innovative and future-focused. It means being a trusted advisor who bridges the gap between vision and reality.
BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026
HOW HAVE YOU SEEN THE BUILT ENVIRONMENT CHANGE OVER THE YEARS? Over the years I have been involved in industry (becoming too many to count!!), the built environment has undergone a profound transformation driven by technological innovation, sustainability imperatives and changing societal needs. We have moved from traditional methods for cost planning, I was part of the generation that hand wrote cost plans, to highly digitised processes, with tools like Building Information Modelling (BIM) and advanced data analytics becoming standard practice. Sustainability has shifted from being a niche consideration to a central pillar of design and delivery, influencing material choices, energy efficiency and lifecycle planning.
INTERVIEW
Quantity surveyors now provide carbon reporting as part of our services offering. Urban spaces have become more people-focused, prioritising accessibility, inclusivity and wellbeing. These changes reflect a broader recognition that the built environment is not just about structures but about creating spaces that enhance quality of life while minimising environmental impact. Our role in the cost management of these changes has had to adapt and be responsive, not just relying on standard benchmark but being responsive in our approach to costing.
efficiency and flexibility whilst also offering better safety and well-being outcome. However, this also needs to be responsive to societal demands for more responsibility to our environment. This may include a circular economy which will guide material use and waste reduction, ensuring that resources are reused and repurposed.
•
Continuing to develop our professional standards and continued education. We need to ensure that our members, as Certified Quantity Surveyors, have access to cutting-edge knowledge and tools to thrive in a rapidly evolving industry.
•
Collaboration – working with colleagues within the industry and other professional organisations to enhance our profile.
WHAT ARE YOUR KEY PRIORITIES FOR YOUR TERM AS PRESIDENT? Key priorities for my term are: •
WHAT’S NEXT FOR THE BUILT ENVIRONMENT? The future of the built environment will be defined by resilience, innovation, and sustainability. We are entering an era where carbon neutrality and climate adaptation will be non-negotiable priorities. Smart technologies, including AI-driven design and IoT-enabled infrastructure, will continue to influence how we plan, construct, and maintain buildings. Opportunities for more modular and off-site construction will become more prevalent, offering
dynamic and rewarding career for all. This also encompasses representing and providing a home for professionals in the industry that have not traditionally thought of themselves as quantity surveyors, such as contract administrators and estimators.
•
Promoting the quantity surveyor in the wider Australian community. Our profession focuses where it matters to most clients – the costs. Whilst our role is understood at a base level, our role as independent strategic advisors that are involved in the full project lifecycle, from feasibility to operations, needs to be more widely promoted. Diversity, equity and inclusion is critical as we work to create a profession that reflects the communities we operate in. In Australia, the profession has traditionally been male dominated. There is no basis for this. We need to educate the community that quantity surveying is a meaningful,
WHAT WOULD YOU LIKE YOUR LEGACY TO BE? I would like my legacy to be that of a leader who inspired meaningful change – someone who empowered the next generation of professionals. My goal is to leave behind a profession that is stronger, more inclusive and better equipped to shape a built environment.
BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026
5
VISUAL FEATURE
ST KILDA PIER REDEVELOPMENT
VISUAL FEATURE
DCWC was proud to act as the quantity surveying and cost management partner for Parks Victoria’s ambitious St Kilda Pier Redevelopment. This $58M project has revitalised one of Melbourne’s most iconic landmarks, blending modern functionality with heritage preservation and environmental care. The redevelopment was based on a community-selected design crafted by JCB, AW Maritime and Site Office. At the heart of the project is a curved pier design that includes a breakwater, creating a safer habitat for the resident little penguins, while significantly enhancing visitor engagement and recreational opportunities. Key features include: •
A 450-metre-long pier with a design life of 50 years, built with durable concrete and timber.
•
A safer breakwater and improved protection for the 1,400 resident little penguins.
•
Public access to the bay with open space, tiered seating, and a wider, all-abilities walkway.
•
•
•
Stunning views of the St Kilda shoreline and Melbourne city skyline. New public amenities, including upgrading toilets and a low-level landing for ferries. A dedicated approach to preserving the precinct’s cherished heritage features.
A late-stage redesign of the rock revetment necessitated repositioning the rock groyne at a splayed angle to the pier, extending 150 metres out to sea. This involved dismantling the existing groyne, sorting and reusing suitable rocks, and importing additional toe rocks weighing over six tonnes. Precision placement of these rocks was achieved using a 100-tonne crane on a barge, ensuring the new design met structural and environmental requirements. The discovery of asbestos-containing materials in the pier’s headstocks necessitated a specialised approach. EA brackets were installed by divers to support the contaminated headstocks, each weighing nine tonnes. This process required extensive resources, including divers, cranes, and barges. Public safety was maintained through a pedestrian management system, as the pier and shoreline remained operational throughout demolition.
With over 800,000 annual visitors, peaking at 6,000 per day, it was critical to keep the pier operational throughout construction while safeguarding the penguin colony. DCWC, along with other principal consultants, developed a meticulous schedule incorporating construction methodologies and staging plans to minimise disruption and ensure longterm sustainability. Construction began in November 2021, with the new pier officially opening to the public in December 2024. The balance of the project works, including foreshore upgrades and the demolition of the existing pier, was completed in mid-2025. DCWC is proud to have supported Parks Victoria in delivering this transformational project, which enriches the community and ensures the St Kilda Pier continues to serve as a vibrant cultural and environmental landmark for decades to come.
KEY PROJECT DETAILS QUANTITY SURVEYOR
DCWC
CLIENT
Parks Victoria
ARCHITECT
Jackson Clement Burrows Architects (JCBA), AW Maritime, and Site Office (Landscape Architecture)
BUILDER
Simpson Construction Co.
STATUS
Completed
TIMEFRAME
2021–2025
VALUE
AU$58M
LOCATION
St Kilda, Victoria
IMAGES
Peter Clarke Photography
The St Kilda Pier Redevelopment faced two significant challenges that required innovative solutions to ensure project success.
BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026
7
Images: Peter Clarke Photography
VISUAL FEATURE
Peter Clarke Photography.
BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026 9
VISUAL FEATURE
This article was provided by DCWC and all images courtesy of Peter Clarke Photography.
10 BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026
VISUAL FEATURE
BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026 11
Q&A
WHY IS IT IMPORTANT FOR AN AIQS MEMBER TO PROVIDE TAX DEPRECIATION SCHEDULES FOR RESIDENTIAL INVESTORS? BRADLEY BEER MAIQS
CEO, BMT Tax Depreciation Quantity Surveyors in practice are the go-to specialists for property depreciation services. They are also formally recognised in Tax Ruling 97/25 as having the appropriate expertise needed to estimate construction expenditure for calculating building write off entitlements available under Division 43 of the Income Tax Assessment Act 1997. The AIQS represents, accredits and supports members in the tax depreciation field. An example of this guidance and support was the publishing of The AIQS Quantity Surveyor’s Guide to Residential Tax Depreciation in 2023, providing a uniformed approach to delivering depreciation services. It was a welcomed initiative in the industry setting up guidelines for Quantity Surveyors to ensure accuracy, compliance, maximised claims while minimising risk to the property owner, their accountant and Quantity Surveyors.
An example of how this paper supports best practices was the guidance around the necessity of a thorough site inspection when completing a tax depreciation schedule. The guide emphasises that a physical site inspection provides the most reliable and accurate depreciation schedule. It became apparent that while desktop assessments offer convenience and an indication of deductions, they often miss critical details that can significantly affect the accuracy and size of depreciation claims. A physical site inspection will identify all qualifying structures and assets, including old additional works completed by previous owners, along with evidence of the buildings condition, age and construction type, ensuring that deductions are maximised and crucial data is gathered to assess and support the claim. According to BMT Tax Depreciation data, encompassing almost 1,000,000
12 BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026
depreciation schedules completed, 66 per cent of second-hand residential properties have qualifying additions that needed to be assessed and included in the depreciation schedule, often these are completed by a previous owner. Without a physical site inspection, property owners risk missing valuable deductions that are often invisible to the untrained eye, such as concealed wiring, plumbing or other improvements. These overlooked items can result in thousands of dollars in under-claimed entitlements. When ordering a depreciation schedule from a Quantity Surveyor backed by the AIQS, property owners can be assured that the report will be a professionally prepared, inspection-backed depreciation schedule that will uncover significantly greater deductions. For residential investors, engaging an AIQS member provides confidence that their depreciation claims are accurate, compliant, and optimised for maximum financial benefit.
Q&A
MARK KILROY MAIQS CQS CEO, Koste
With more than 25 years of specialist experience in Tax Depreciation across the United Kingdom and Australia, I have dedicated my career to helping property investors, accountants and industry professionals understand the value that expert Quantity Surveyors bring to this specialised area. Through ongoing education and advocacy, I have seen first-hand how the right guidance can transform an investor’s financial outcome and contribute to Australia’s housing economy.
SUPPORTING INVESTORS TO REINVEST, NOT OVERPAY As Quantity Surveyors, we have a professional and ethical duty to ensure property investors use legitimate tax savings to reinvest in housing rather than leaving their money with the Australian Tax Office (ATO).
Each year, the statistics remain the same, with around 60% of residential property investors failing to claim a single dollar of depreciation deductions, while the remaining 40% are unlikely to be maximising their entitlements. The reality is that the ATO will never remind them.
EXPERTISE THAT DRIVES ECONOMIC IMPACT AIQS members play a vital role in translating complex tax legislation into financial opportunities that empower investors, improve cash flow and support reinvestment back into housing and the broader economy. Our work extends far beyond calculating construction costs; it is about applying technical knowledge and professional judgment to create measurable economic value.
UPHOLDING PROFESSIONALISM AND TRUST Being a Full Member of the AIQS (MAIQS) and a Certified Quantity Surveyor (CQS) provides property investors with confidence in the professionalism, accuracy and integrity that define our industry. These credentials represent a commitment to excellence and ethical practice that distinguishes our profession and reinforces trust within the marketplace. When we, as Quantity Surveyors, lead this space with integrity, expertise and purpose, we not only maximise returns for investors but also strengthen our profession and play an active role in shaping a stronger, more sustainable housing market for Australia.
BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026 13
Q&A
YENKTESH REDDY MAIQS
Director, Corpred Enterprises Pty Limited As Director at Corpred Enterprises and a proud member of the Australian Institute of Quantity Surveyors (AIQS) for over 25 years, I regard tax depreciation schedules as a critical service for property investors. AIQS membership signals credibility, technical expertise, and adherence to professional standards. When a qualified quantity surveyor prepares a depreciation schedule, clients can trust that the report is compliant, defensible, and maximises legitimate deductions. The financial impact is significant. A properly prepared schedule allows investors to claim depreciation on
both building structure and plant and equipment assets (where allowable). These deductions reduce taxable income, improve cash flow, and enhance overall returns. Over the life of an investment, the savings can amount to tens of thousands of dollars. Without a compliant schedule, clients risk leaving substantial benefits unclaimed each year. Risk management is equally important. The Australian Tax Office requires depreciation schedules to be prepared by appropriately qualified professionals who are also registered tax agents. An AIQS member provides assurance that
the methodology is robust, valuations are accurate, and the report will withstand scrutiny. This protects clients from audit exposure and avoids reliance on guesswork or generic estimates. In my experience, clients who invest in a professionally prepared schedule gain both immediate and long‑term advantages. It is not just about tax savings—it is about building confidence in their investment strategy, safeguarding compliance, and unlocking the full value of their property. For these reasons, engaging an AIQS member is not optional; it is essential.
TECH TIP Powered by AIQS Corporate Partner, RIB A Building Rate Library is similar to a Global Rate Library with the key difference that a Building Rate Library is created in a building and can only be used in the building where it was created. This allows changes to the rate library to be restrained to the building and its workbooks and not shared across multiple buildings.
To enable a building to use building rates, open the building properties and enable the Building Rates option. Once building rates are enabled they need to be created either within the building or the quickest way to get started is to insert a rate library from the system administration to form the basis of a Building Rate Library.
Building Rate Libraries are denoted by a ‘Building’ icon under the Rates tab. For more visit rib-software.com/en/ rib-costx.
BIM
THE MAGIC OF ELUSIVE BIM AND 5D BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026 15
BIM
When accuracy and speed define the success of a construction project, Building Information Modelling (BIM) and 5D Cost Planning (5D) should be more than just words that get thrown around. They’re essential tools for experts to develop a smarter, more integrated way of working. As Caitlin Shields MAIQS CQS, Queensland Partner at Mitchell Brandtman and expert in 5D and BIM, puts it, “The original intent of BIM was a methodology or ideology about how teams should work. It’s not just a physical thing; it’s a way of thinking.” At its core, BIM is a collaborative process underpinned by digital technologies. It allows stakeholders to develop a coordinated digital representation of a project, incorporating data across all disciplines. It starts with what’s available, as Caitlin explains. A 3D model (or model) is provided, and quantity surveyors utilise this information to introduce the 5D aspect: cost. “The model is one part. The real value is in the information, it’s about how well that information is structured and shared.” Caitlin says. It’s about using all components of a project and how that information is structured, analysed, and ultimately used to make better decisions. Quantity surveyors use this data not to author, but to consume, organise, and analyse. In traditional workflows, quantity surveyors spend the majority of their time measuring from 2D documents.
COST AND DEMAND High upfront investment
BIM flips that paradigm. “The models give us quantities rapidly, so we spend less time counting and more time asking the critical questions about why things cost what they do.” The result is a deeper cost analysis that is provided within an expedited timeframe. Teams can run iterations, refine estimates multiple times (not just at traditional milestone points), and deliver insights in real-time to keep pace with evolving project needs. “The magic of 5D is when we can link the cost data directly from the model outputs so when the design changes, the cost changes with it,” Caitlin explains.
THE UTILISATION OF BIM Despite its clear benefits, BIM and 5D adoption remains patchy across the industry. Why? The answer is simple. It is not mandated. “I’m an advocate for governments to make it mandatory and make people do it right,” Caitlin says. Owners and developers often don’t ask for BIM because they don’t fully understand its value. Many projects are delivered and immediately sold off, meaning the long-term benefits of embedded digital information are lost on those footing the bill. Without incentive or pressure from clients, many project teams stick to old methods. Even subcontractors and trades are often disengaged from the BIM process. “You’ve still got a whole
industry that’s full of tradies in utes with invoices in their glove box. They’re not thinking about digital models and most importantly that transfer of knowledge of project information.” But Caitlin argues the tide is turning. Those who are engaging with BIM are beginning to see just how much it can transform project delivery. BIM enables everyone, from architects and engineers to trades and financiers, to be on the same page. And for projects that get it right, the outcomes speak volumes.
A ‘SUNNY’ EXAMPLE Mitchell Brandtman’s involvement in the $1.8B Sunshine Coast Public University Hospital project is an example of BIM and 5D at its best. “That was a gem of a project and a game changer in our methodologies,” Caitlin recalls. “We were not involved from the beginning, but when we arrived, we were able to give rapid and repetitive feedback on quantities and model information which influenced the way software providers structured their outputs. The result was a seamless process from design to delivery by providing virtual trade packages, digital coordination, and collaboration.” The project didn’t just benefit from efficiencies the team provided, but it also helped shape industry standards. It’s proof that when Quantity Surveyors are engaged early and enabled to work in 5D, everyone wins.
STANDARDS AND POLICIES
RESOURCE GAPS
RESISTANCE TO CHANGE
Absence of clear regulations and
Shortage of skilled professionals
Conservative attitudes
Poor knowledge transfer
Reluctance to change
guidelines Low market interest
Weak policy and research support Rigid contracts
Table 1
16 BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026
BIM
WHO BENEFITS AND WHO’S USING IT? The answer to who benefits is everyone. But the biggest gains are for asset owners, operators, and those managing portfolios over time. Caitlin is especially passionate about where BIM is gaining traction now. Major players across public and private sectors are beginning to understand the long-term operational gains of having a ‘digital twin’. A digital twin is valuable for owners and operators, especially in sectors like healthcare, aged care, education, or government, where understanding and maintaining a building over its lifespan is essential. “They want their real building and a digital building. The digital one holds all the information, when warranties expire, when to replace things, what materials were used. That’s incredibly powerful.” These are long-term assets, often heavily maintained and managed. With BIM, lifecycle costs can be controlled better. Even build-to-rent developers are beginning to see the light. While not mandated, many of them work with designers who are already producing models, meaning the QS can use those for fast and accurate cost planning. “It’s a tailored experience. Even for townhouses or multi-res, we use models where we can. There’s value being delivered even if the client doesn’t know we’re doing it,” says Caitlin. Pull out: A white paper by Autodesk (2021) reported that BIM engagement in Australia/New Zealand is slightly below the global average, with 46% of respondents using it on at least half their projects, an average usage rate of 50%, compared to the global 52%. However, a more recent publication by Deloitte and Autodesk (2025) reports that Australian construction businesses
have increased their average use of digital technologies from 5.3 in 2024 to 6.9 in 2025, with BIM identified as a prominent technology, indicating broader adoption across the industry. One of the most common misconceptions is that 5D, or the use of digital collaboration can only happen when models are 100% perfect. Caitlin reminds us that this notion of BIM is a methodology and should be a tool in the whole development process, “We don’t throw the baby out with the bathwater. We’ll use whatever information we’re given, models, 2D documents, schedules and we’ll make it work.”
PHILOSOPHY TO DELIVERY BIM and 5D aren’t just digital tools, they’re a philosophy and a way of delivering projects better. As Caitlin explains, “This is about using better information to make better decisions. It’s not faster and cheaper, it’s smarter and more confident. That’s how we add value. ”Whether working with operators, government agencies, financiers, or developers, This approach to BIM and 5D helps projects move from concept to construction with greater clarity and collaboration.
REFERENCES Autodesk 2021, BIM and digital transformation: 2021 Australia and New Zealand insight report, accessed 25 July 2025, <https://damassets. autodesk.net/content/dam/autodesk/ www/industry/aec/bim/aec-smartmarket-insight-2021-bim-digitaltransformation-australia-new-zealanden.pdf>. Deloitte Access Economics and Autodesk 2025, State of digital adoption in the construction industry 2025, accessed 25 July 2025, <https:// www.deloitte.com/au/en/services/ economics/analysis/state-digitaladoption-construction-industry.html>. Sompolgrunk, A., Banihashemi, S., Hosseini, M.R., Golzad, H. & Hajirasouli, A. 2023, ‘An integrated model of BIM return on investment for Australian small- and medium-sized enterprises (SMEs)’, Engineering, Construction and Architectural Management, vol. 30, no. 5, pp. 2048-2074.
For clients, the takeaway is clear; if you want a project with intelligent cost outcomes, BIM and 5D should not be seen as optional extras. They’re the future of Quantity Surveying.
This article was provided by Mitchell Brandtman.
BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026 17
ECI
EARLY CONTRACTOR INVOLVEMENT By Shaun Muddock MAIQS
The Early Contract Involvement (ECI) process isn’t new, but it has gained significant traction in recent years and is increasingly being used as a practical way to move projects forward.
I SO, WHAT IS ECI? Essentially, ECI means engaging a contractor early in the project lifecycle before documentation is complete. This early engagement allows the contractor to provide valuable input on buildability, cost certainty, risk management, and design simplification, among other areas. Typically, the contractor will charge an ECI fee, which represents an additional upfront cost to the client. This ECI fee can vary on every project based on complexity, duration, involvement, and specific requirements. However, this cost can often be offset by starting on site sooner, reducing holding costs, and improving overall project efficiency. A quantity surveyor (QS) plays a vital role throughout the ECI process, ensuring value for money, conducting cost reviews, and verifying that any design adjustments are financially sound. Before COVID, it was common to competitively tender a project and receive three to five bids, often at tight margins. In today’s market, particularly in the high-rise residential sector in southeast Queensland, it can be
challenging to secure even a single competitive tender. The ECI process requires a degree of trust between the client, design team, and contractor. Selecting a contractor known and trusted by the client, project manager, and quantity surveyor can significantly reduce risk and improve collaboration outcomes. If you’re going to pursue an ECI, do it with intent and clear objectives. The process should be structured and transparent, not just an informal arrangement for a bit of upfront advice from a contractor. Of course, there are risks. Some contractors may offer unrealistically low ECI budgets to entice clients, only for costs to escalate later. A skilled quantity surveyor can help identify these risks early and protect the client’s interests. From experience, I’ve used the ECI process successfully on numerous occasions. Done right, it ensures projects run smoothly. Done poorly, additional costs and time delays may occur.
I PROS •
Projects can commence on site sooner
•
Buildability and construction issues are addressed early
•
Encouraging an open, collaborative project team.
18 BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026
I CONS •
Not all contractors understand or manage the ECI process effectively
•
Poorly managed ECI can add time, cost, and delays
•
Design intent must be clearly defined to avoid wasted effort and rework.
This article was written by Shaun Muddock MAIQS from Measured Consulting.
CASE STUDY
INTEGRATED, FUTURE-FOCUSED, AND ICONIC: COMPLEXITY, CONNECTIVITY, AND COMMERCIAL VISION By Oliver Nichols
Image: Brett Boardman Photography
BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026 19
CASE STUDY
Source: Brett Boardman Photography.
As cities grow more complex and connected, so too much the infrastructure that supports them. As cities grow more complex and connected, so too much the infrastructure that supports them. Sydney Metro Martin Place Integrated Station Precinct is a landmark example of how visionary design, advanced technology and cross-sector collaboration can reshape the urban fabric for future generations. Delivering Australia’s first fully integrated transport and commercial precinct wasn’t just a construction achievement – it was a redefinition of what’s possible at the intersection of infrastructure, sustainability and commercial design. For RLB, the project represents not only a major
milestone but also a case study in how our practice is helping clients build the future.
REDEFINING THE ROLE OF A QUANTITY SURVEYOR Engaged from the earliest phases of the unsolicited proposal, RLB worked side-by-side with Macquarie Group, Grimshaw Architects, JPW, Tzannes and delivery partner Lendlease to bring this AU$1.5 billion precinct to life. As the scope evolved, so too did our role – advising on cost, risk and value across a complex matrix of mixed-use construction, integrated transport systems and public domain upgrades. “Supporting this vision from concept to completion has been both challenging and rewarding,” says Oliver Nichols, Director at RLB NSW. “For our team, it was a career highlight. For the industry, this project is a beacon of how integrated, technology‑led construction can serve long‑term city‑making goals.”
20 BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026
ENGINEERING TOMORROW’S CITIES TODAY Martin Place’s North and South Towers are more than skyscrapers – they’re digitally enabled, fully electrified and powered by sustainable technologies. Known as 1 Elizabeth and 39 Martin Place, respectively, these towers boast the Green Building Council of Australia’s coveted 6 Star Green Star rating and represent the future of workplace design: energy efficient, tech-integrated, and connected to both transport and community. With tunnel air exhausted onto level six and structural columns shared between commercial and transport infrastructure, the integration of building and station services was unprecedented. This kind of vertical urbanism demands high-performance modelling, real-time forecasting and rigorous cost intelligence – all capabilities RLB brought to bear through advanced digital tools and cross-disciplinary teams.
CASE STUDY
That sustainability must be embedded from the outset. And that the best results emerge when cost managers are not just service providers, but strategic partners in delivering long-term value. In a landscape increasingly shaped by data centres, artificial intelligence, modular delivery and adaptive reuse, projects like Sydney Metro Martin Place show what’s possible when old boundaries are redrawn. Offices are no longer just workplaces – they’re vertical ecosystems. Transport hubs aren’t just conduits for movement – they’re anchors of civic life.
Source: Brett Boardman Photography.
CREATING CULTURAL AND CIVIC VALUE Technology may underpin the precinct, but it’s people and culture that give it soul. Martin Place has long been a meeting point and the new precinct honours that heritage. Working with the local Gadigal people, the design embeds Indigenous storytelling through public art and placemaking, supported by RLB’s cost planning services, which ensured heritage elements and art installations could be preserved and celebrated. RLB’s scope also included safeguarding heritage buildings, such as the neighbouring 50 Martin Place, from construction vibration and risk. From modelling gargoyle-safe scaffolding to budgetary allowances for conservation, our team understood that innovation doesn’t just mean new: it also means respect for what’s already here.
LAYER BY LAYER, PRECINCT BY PRECINCT
Our value lies not just in measuring cost, but in shaping opportunity. This project is a powerful example of how we’re building that future – layer by layer, detail by detail, precinct by precinct. We are proud that the Sydney Metro Martin Place Integrated Station precinct has received more than 30 awards since opening a year ago. These include the Australian Institute of Architects NSW Award for Commercial Architecture, the Urban Development Institute of Australia Award for Excellence in Urban Renewal, the Urban Taskforce Development Excellence Award for Development of the Year, and multiple accolades at The Urban Developer Industry Excellence Awards, including Development of the Year (Mixed Use) and Excellence in Community Engagement.
Source: Brett Boardman Photography.
These honours are a testament to the many individuals who brought this bold vision to life, and to the lasting benefit this vibrant, accessible and sustainable precinct brings to the community.
This article was written by Oliver Nichols, Director, Rider Levett Bucknall.
What does this precinct say about the future of construction? That integration is no longer optional, it’s essential.
BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026 21
CASE STUDY
EMMANUEL COLLEGE ST PAUL’S CAMPUS: MARIANIST BUILDING 22 BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026
CASE STUDY
PROJECT SUMMARY AND QUANTITY SURVEYING WORK The delivery of education projects across Victoria in recent years has unfolded against a backdrop of volatility, rising construction costs, and significant pressure across the building industry. Muller Partnership, engaged by Melbourne Archdiocese Catholic Schools (MACS), provided quantity surveying services throughout the design and construction phase of the project. Quantity surveyor involvement contributed to the delivery of the project while accommodating the complexities of a live school environment, complex campus infrastructure, siting constraints, and an uncertain economic climate. Successfully completed in August 2025, the project introduced a contemporary double‑storey learning facility supporting music, administration, student services, staff dining, workstation zones, meeting rooms, amenities and supporting external and services infrastructure.
PROJECT OVERVIEW The Marianist Building is located at Emmanuel College’s St Paul’s Campus in Altona North. The site previously accommodated an older Music and Performing Arts building that had reached the end of its useful life. The project scope included:
•
Full demolition of the existing building
•
External works and landscaping
•
Integration of external services including hydraulic, electrical, communications, sewer, and stormwater
•
Interface works to an adjacent existing chapel.
Construction commenced in August 2024 and achieved completion in August 2025. From inception, the project sought to balance modern pedagogical requirements with operational continuity for an active school community.
QUANTITY SURVEYING SERVICES PROVIDED Muller Partnership delivered quantity surveying services, including: Cost Planning •
Cost planning during design phase
•
Preparation of pre-tender estimate
•
Ongoing review of design changes and corresponding cost implications
•
Incorporation of risk, escalation, and contingency allowances.
Tender Review •
Detailed review and reconciliation of contractor submissions
•
Comparative tender analysis and reporting
•
Modern music and performance spaces
•
Clarification queries issued to tenderers
•
Administration, student services, and staff workspaces
•
•
Meeting rooms, amenities, storage, and circulation areas
Submission of a clear tender recommendation based on capability, pricing, and risk profile.
BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026 23
CASE STUDY
Contract Administration •
Monthly progress claim assessments
•
Assessment of all variation claims
•
Monitoring of construction costs against the approved budget
•
Monthly cashflow reporting and forecasting
•
Preparation of final account.
Throughout delivery, we worked collaboratively with MACS, the principal design consultant, the contractor, and the broader consultant team to ensure financial clarity and project transparency.
KEY CHALLENGES AND MITIGATION STRATEGIES I PROJECT SITING AND ADJACENCIES The new building was constructed on the footprint of the former Music and Performing Arts building and adjoins an existing chapel.
This required:
•
Additional fencing, hoarding, and access management
•
Noise and vibration mitigation
•
Restricted work hours Enhanced safety management.
•
Structural tie in cost allowances
•
Services integration and rationalisation
•
Architectural make good provisions
•
•
Protection of existing fabric.
I ECONOMIC VOLATILITY AND COST ESCALATION (2022–2024)
These considerations were incorporated into cost planning to mitigate hidden financial exposure during construction.
I HAZARDOUS MATERIALS The demolition of the former facility carried the expected risks associated with older campus structures. Allowances were included within cost plans for removal of hazardous materials.
The project unfolded during one of the most volatile market periods Victoria has experienced in decades. The industry saw: •
A 42% rise in construction insolvencies in 2023
•
More than 619 company collapses between July 2022 and June 2023
•
Significant pricing pressure across structural steel, mechanical services, electrical trades, and façade packages.
I WORKING IN A LIVE SCHOOL ENVIRONMENT To maintain normal school operations, the project required enhanced preliminaries, including:
We observed that education projects across Victoria (both private and public) were pricing well above historic benchmarks. As such, cost planning focused on: •
Benchmarking from 2022 and 2023 education tenders
•
Subcontract market testing
•
Inclusion of meaningful escalation allowances
•
Transparent communication with MACS regarding risk exposure.
INNOVATIONS AND SOLUTIONS I ROBUST COST PLANNING AND CONTINGENCIES Contingencies were carefully calibrated to project‑specific risks. This included reviews with the Principal Design Consultant and detailed examination of below‑the‑line development costs.
24 BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026
CASE STUDY
•
Updated cost forecasts
•
Contractor performance insights
•
Detailed cashflow projections
•
Program risk commentary
•
Variation tracking and assessment.
This allowed MACS to maintain confidence in the financial trajectory throughout construction phase works.
I EXPANDED REFLECTIONS AND BROADER INDUSTRY CONTEXT Projects like this demonstrate the importance of:
I VALUE ENGINEERING WORKSHOPS We attended workshops that examined: •
Material substitutions
•
Optimised structural solutions
•
Mechanical and electrical system efficiencies
•
Architectural rationalisation
•
Staging efficiencies and buildability considerations.
•
QS involvement to shape strategic project budget
•
Data-driven benchmarking
•
Close consultant collaboration to avoid scope misalignment
•
Maintaining client confidence through consistent, structured reporting.
The successful delivery of the Marianist Building highlights how quantity surveying practice can derisk educational infrastructure projects even when external pressures create uncertainty.
CONCLUSION The Marianist Building project shows how quantity surveying contributes directly to project certainty, especially in challenging market conditions.
This article was provided by Muller Partnership.
I BENCHMARKING AND HISTORICAL DATA MODELLING The project benefited from our database of school projects across Victoria. Benchmarking focused on actual tendered rates from similar projects tendered at or around the expected tender date for the current project.
I COST MONITORING AND CASHFLOW MANAGEMENT During construction, monthly reporting included:
BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026 25
MATERIALS
10 COST CONSIDERATIONS WHEN ESTIMATING OFF-FORM VS. CONVENTIONAL CONCRETE By Moises Lopez MAIQS CQS
26 BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026
MATERIALS
1.
FORMWORK MATERIAL AND QUANTITY
•
Conventional concrete: Standard, reusable formwork (plywood) is sufficient. Imperfections and minor leaks are acceptable as the surface will be hidden.
•
Off-form concrete: Requires premium, defect-free materials. This includes high-density (HD) plywood, specialised fibreglass, or custom-built forms to achieve specific patterns (e.g., boardformed, ribbed). The cost per square metre of formwork can be 3-5 times higher than standard forms.
(e.g., white cement), uniform, colour-matched aggregates, and potentially additives like fly ash or silica fume to enhance finish and minimise efflorescence. This mix is notably more expensive.
•
Conventional concrete: Focus is on speed and reusability. Tolerances are standard, and erection is straightforward. Off-form concrete: Requires meticulous craftsmanship to ensure tight, perfect joints and alignment. The engineering behind the formwork system is more complex to prevent bulging or misalignment. This significantly increases skilled labour hours and engineering costs.
•
Conventional concrete: Minor variations in colour or consistency between concrete batches are acceptable.
•
Off-form concrete: Absolute consistency is critical. Every truck must match perfectly to avoid visible ‘pour lines’ or colour variations on the final surface. This requires tight batch plant control, potentially holding a load until the previous one is placed, and may involve rejecting entire loads that don’t match. This adds risk and potential delay costs.
Conventional concrete: Standard mix design based on strength (e.g., 25MPa or 30MPa). Cost is minimised, and consistency between trucks is less critical.
•
Off-form concrete: Requires a carefully designed, consistent ‘architectural mix’. This often includes specified cement types
Off-form concrete: Must meet much tighter architectural tolerances for finish, colour, flatness, and bug-hole size. This requires continuous, rigorous inspection by superintendents and the architect both during formwork erection and after stripping. This administrative and quality control overhead must be factored in.
7.
FORM RELEASE AGENTS
•
Conventional concrete: Standard diesel-based or bio-based form oil is used. It may leave a residue or slight stain.
•
Off-form concrete: Requires a specialised, non-staining form release agent specifically designed for architectural concrete. These agents are formulated to not discolour the concrete surface and must be applied in a thin, even coat to prevent blotchiness.
5. PLACEMENT AND CONSOLIDATION TECHNIQUES •
•
3. CONCRETE MIX DESIGN •
•
4. CONSISTENCY AND BATCH CONTROL
2. FORMWORK LABOUR AND ENGINEERING •
(e.g., ACI 117) and are relatively forgiving for surface appearance.
Conventional concrete: Standard pouring and vibration practices are used. The goal is to eliminate honeycombing for structural integrity. Off-form concrete: Placement must be planned to avoid visible cold joints. Consolidation (vibration) requires a highly skilled crew; under-vibration causes honeycombing, while overvibration brings too many fines to the surface, creating inconsistent colour and texture. This skilled labour commands a higher wage.
6. TOLERANCES AND INSPECTION •
Conventional concrete: Tolerances are governed by structural codes
8. REPAIR AND REMEDIATION •
Conventional concrete: Minor surface defects are patched with standard mortar and are invisible in the finished work.
•
Off-form concrete: The surface is the finish. Repairing tie-hole voids, bug holes, or discolouration is incredibly difficult and expensive. It requires highly skilled artisans using specialised grouts and pigments to ‘touch up’ the surface to match the surrounding concrete, often with mixed results. A significant contingency (e.g., 5-10%) should be included for this risk.
BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026 27
MATERIALS
9. PROTECTION •
Conventional concrete: Once cured, it requires minimal protection from subsequent trades.
•
Off-form concrete: The exposed surface must be protected from scratches, paint, grease, and impact for the entire duration of the project. This requires installing temporary protection systems (e.g., corner guards, rigid foam insulation, plywood shielding), which adds material and labour costs.
10. CLEANING AND SEALING •
Conventional concrete: Not required, as the surface is covered.
•
Off-form concrete: After stripping, the surface must be meticulously cleaned (often with specialised acid washing or water blasting) to remove residue and even out the colour. Finally, a high-performance penetrating or film-forming sealer must be applied to protect the surface from weathering and staining. This is a multistep process requiring skilled applicators.
FREQUENTLY ASKED QUESTIONS 1.
Where is the cost centre compared to conventional concrete?
The cost shifts from the finish to the formwork. Off-form concrete invests heavily in premium formwork materials and skilled installation to create the final surface, eliminating later trades like plastering. Conventional concrete has a lower initial cost but accrues significant expenses for these finishing trades.
2.
Is it more expensive than a painted finish?
For a high-quality result, the costs are often similar. A painted finish requires ongoing maintenance and repainting cycles. Off-form concrete has a higher initial cost but is a permanent, maintenance-free finish, offering better long-term value. 3.
What specific factors drive up the formwork cost?
Three factors are critical: the high cost of specialty form-liners, a lower reuse rate due to delicate surfaces, and the need for more skilled, time-consuming labour to achieve a perfect, blemishfree result. 4.
Why is the financial risk higher for the estimator?
With conventional concrete, imperfections can be hidden. With offform, any flaw is permanent and visible. Remediation is extremely expensive, requiring a higher contingency allowance in the estimate to cover the risk of grinding, patching, or even
28 BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026
demolition. 5.
What cost savings can be directly factored into the estimate?
The primary saving is the complete elimination of all interior or exterior finishing trades (plaster, paint, cladding). This also streamlines the construction schedule, potentially reducing site overhead and enabling earlier project completion. 6.
How does the quantity take-off differ?
The concrete volume is identical. The difference is in the formwork and finishes. For off-form, you measure only the architectural faces for premium formwork and apply a low reuse factor. For conventional, you measure all formwork contact area at a standard rate and then perform a separate, detailed take-off for all finishing materials.
This article was written by Moises Lopez MAIQS CQS from Accent Estimating.
MATERIALS
HOW A LIGHTWEIGHT TIMBERSTEEL HYBRID MADE AN IMPOSSIBLE EXTENSION POSSIBLE
BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026 29
MATERIALS
Melbourne’s intersection of Flinders and Elizabeth Street is not a forgiving address for construction. Bounded by trams, pedestrians, delivery trucks and the rhythmic swell of commuters pouring from the station, it’s the kind of site where every truck, crane swing, and cubic metre of concrete is a small negotiation with the city itself. So, when Fivex Commercial Property Holdings decided to extend their building at 276 Flinders Street upwards by adding five new storeys above the active retail, gym and childcare podium, concrete was never an option. The tenancies below needed to keep trading, the footpaths couldn’t be closed for weeks on end, and the existing structure couldn’t support the extra weight of several thousand tonnes. The solution was to think light.
THE STRUCTURAL IDEA Baldasso Cortese Architects, Bonacci Group, Irwin Consult, and Multiplex Constructions developed a hybrid steel-and-timber system: a modular steel frame supporting cross-laminated timber (CLT) floor panels. The result was a five-storey, 3,300 m² office extension built above the existing roofline, linked by bridge connections to the main Fivex Tower at each level (Multiplex 2019). The logic was simple but powerful. Once fitted out, a CLT and steel building typically weighs as little as one-third of a comparable reinforced-concrete structure. That kind of mass reduction doesn’t just change the structural calculations; it transforms the project economics. Fivex’s Managing Director later described it as, “a build that would have been impossible in concrete without
gutting the whole building beneath” (Fivex 2019). In the hybrid system, the existing podium was able to carry the additional load with only minor strengthening. No tenant relocations. No structural overhauls.
MAKING LIGHT WORK OF A HEAVY SITE The location alone presented every logistical challenge imaginable. On one side, trams rattled past within centimetres of the hoardings. On the other, Melbourne’s busiest pedestrian thoroughfare ran shoulder-to-shoulder with the site gates. Below, the retail floors remained open throughout construction and site access was limited to one of Melbourne’s famously narrow alleys, just off Flinders Lane.
Every decision across the project was affected by this highly unique and often congested location. A traditional concrete build would have demanded continuous deliveries of heavy materials – trucks queued throughout the CBD, pumps stretching across the footpath, long curing times and plenty of noise. The lighter prefabricated system flipped that equation. Prefinished CLT panels arrived pre-cut and ready to install. Smaller cranes lifted them straight into position. The steel framing went up quickly, without the need for extensive formwork or wet trades. The result was a quieter, cleaner site – important when the café downstairs still had customers ordering flat whites mid-morning. Multiplex’s team reported that the
30 BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026
construction period dropped from an expected 18 months to less than 12, with the last CLT panel installed just as the trams began their evening rush (Multiplex 2019).
Less load on the foundations meant no major strengthening works... Even more impressive was how the team managed compliance and coordination around live tenancies. Noise and vibration monitoring ran throughout construction. Deliveries were timed to avoid commuter peaks. The modular steel frame was fabricated off-site to reduce welding and cutting overhead. Every decision across the project was affected by this highly unique and often congested location.
HOW LIGHTNESS TRANSLATED INTO VALUE For a quantity surveyor, the structural weight of a building is more than just a number on the engineer’s spreadsheet, it triggers a cascade of cost and risk implications. Less load on the foundations meant no major strengthening works, avoiding months of demolition, excavation and underpinning. In cost-planning terms, it erased entire trade packages from the estimate. Smaller cranes and lighter logistics meant lower preliminaries. Traffic management, hoarding, and disruption costs all shrank in proportion to the lighter structure. A faster programme meant reduced overheads and financing costs. With no curing delays and prefabricated elements arriving on time, the structural frame went up like a kit of parts.
MATERIALS
The hybrid system cut embodied emissions by roughly a quarter compared with a conventional concrete build... Tenant continuity meant retained revenue. For a building with active ground-floor leases, the ability to trade throughout construction wasn’t just a convenient perk – it was commercially critical. And of course, the carbon savings. The hybrid system cut embodied emissions by roughly a quarter compared with a conventional concrete build, storing carbon in the timber elements rather than releasing it into the atmosphere (Fivex 2019). As Multiplex Regional Director Ross Snowball put it, “Given the lack of land available in Melbourne’s CBD, it makes sense developers are looking up to their rooftops to give them more bang for their buck. Innovative construction methods such as CLT lend themselves to these types of projects, because they are up to 80 per cent lighter than traditional structures” (Build Australia 2019).
COST AND FEASIBILITY Was timber cheaper than concrete? Not on a per-square-metre basis, at least not for the superstructure alone. Timber and steel fabrication costs still carry a slight premium over conventional concrete slabs. But that’s not the right comparison. The relevant question is: what would it have cost to build the same extension in concrete, under these site conditions?
...The lighter structure made the project possible and profitable. The answer: significantly more. The need for strengthening temporary works and tenant relocation would have driven both cost and time much higher. Once those line items are included, the hybrid system delivered an overall cost saving of around ten per cent, according to the developer’s own estimates. Put simply, the lighter structure made the project possible and profitable.
LESSONS FOR THE PROFESSION The Fivex project underscores a simple truth that’s increasingly relevant for urban renewal and adaptive-reuse work: in many CBD sites, the real cost driver isn’t what you build, it’s what your building sits on. For quantity surveyors, this means thinking of structural mass as a financial variable. Less mass doesn’t just save material; it affects everything downstream: earthworks, removal of contaminated soil, foundations, cranes, scaffolding, risk allowances, and programme. Hybrid timber-steel systems like this are emerging as enablers for vertical extensions and over-builds, where concrete would be too heavy, too slow, or too disruptive. They also bring an environmental dividend that tenants and investors increasingly value. While Melbourne may have been an early adopter, the logic extends across Australian cities. Ageing office stock, tight planning envelopes and rising embodied-carbon pressures are
combining to create new opportunities for lightweight extensions. Projects like 276 Flinders show that it’s not only possible to build more with less mass, it’s becoming essential. In the years ahead, quantity surveyors may find that ‘lightweighting’ a structure is just as powerful a cost strategy as value engineering or material substitution.
LOOKING UP Today, the new levels at 276 Flinders Street sit comfortably above the old podium. From the street below, you’d never guess that the building was ever a different shape or size, or that above it now rests five storeys of timber, quietly locking away tonnes of carbon dioxide. For Melbourne’s dense urban core, this project signals a shift in what’s possible. Building up no longer means building heavy.
REFERENCES Baldasso Cortese Architects 2019, 276 Flinders Street Project Profile, <https:// www.baldassocortese.com.au/276flinders-street-by-baldasso-cortese>. Fivex Commercial Property Holdings 2019, ‘Twigging to Timber - Fivex Scores Big Benefits’, <https://www. fivex.com.au/2176/twigging-to-timberfivex-scores-big-benefits>. Multiplex Constructions 2019, ‘276 Flinders Street, Melbourne – A hybrid steel and timber sustainable office’, <https://www.multiplex.global/news/ multiplex-completes-fivexs-riverviewhouse>.
This is a paid advertorial written by AIQS Corporate Partner, WoodSolutions.
BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026 31
PREFABRICATION
EMPOWERING DIGITAL TRANSFORMATION: REIMAGINING THE CLIENT’S ROLE IN PREFABRICATED FUTURES
By Chamil Erik Ramanayaka
32 BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026
PREFABRICATION
...Rising costs and shifting expectations are not just pressures – they are catalysts for change. In the evolving landscape of Architecture, Engineering, and Construction (AEC), rising costs and shifting expectations are not just pressures – they are catalysts for change. As margins narrow and ambitions grow, digital technologies emerge not as panaceas, but as precision instruments: refining processes, reducing waste, and restoring clarity to complex undertakings. When aligned with core business priorities, digital tools can strengthen competitiveness and support cost control, all while maintaining executive oversight and operational governance throughout the project life cycle. Digitalisation is thus no longer a peripheral consideration but a central demand in large-scale commercial and infrastructure projects. Today’s organisations are no longer constrained by fixed ICT infrastructure. Instead, they can leverage scalable, cloud-based platforms that deliver secure data storage and intelligent software applications on demand. This shift enables operational agility and financial precision through usage-based pricing – ensuring resources are consumed efficiently and investments remain tightly aligned with performance. As digital solutions become more cost-effective and the business environment more dynamic, executive confidence in digital project delivery continues to grow.
Central to this digital transformation is Building Information Modelling (BIM) – a structured methodology for capturing both the physical and functional characteristics of built assets. In the evolving symphony of global innovation, thought leaders like the World Economic Forum envision BIM not as a solitary instrument, but as part of a harmonious ensemble – interwoven with the precision of prefabrication and the sculptural elegance of 3D printing – to compose the future of intelligent construction. For project sponsors, the fusion of BIM and prefabrication is more than a technological evolution – it is a strategic alchemy. BIM provides the analytical backbone: precise modelling, early risk detection, and coordinated decision-making. Prefabrication brings manufacturing discipline to construction: faster delivery, reduced waste, and predictable cost structures. Individually, each offers incremental gains. Together, they orchestrate a symphony of control, speed, and certainty. Projects are delivered faster, with fewer surprises, and with greater control over quality and cost that are hallmarks of sound investment.
Designers, manufacturers, suppliers, and contractors are left to interpret intent without context or purpose. While integrating BIM with prefabrication technologies offers a compelling solution to longstanding productivity challenges in the AEC sector, the benefits are far from automatic.
Real value hinges on the client’s ability to cascade high-level, Organisational Information Requirements (OIRs) into precise, actionable inputs across the supply chain. OIRs are not bureaucratic relics – they are the narrative threads that weave a client’s strategic vision into digital form. They pulse with the tempo of market forces, innovation appetite, and regulatory tides. Yet these highorder requirements often arrive at the supply chain as distant echoes: complex, unfamiliar, and unanchored. Designers, manufacturers, suppliers, and contractors are left to interpret intent without context or purpose. Unless key departments within the project sponsor’s organisation act as interpreters – translating OIRs into structured, actionable Exchange Information Requirements (EIRs) before tender – digitalisation remains a promise deferred. Too often, however, EIRs surface only at the twilight of commissioning, long after the critical windows for early validation and integration have closed. The absence of narrative clarity – of explaining not just what is required, but why – undermines the supply chain’s ability to engineer value, align effort, or innovate with confidence at the early stage of prefabrication projects. Prefabrication introduces a distinct operational shift: with most construction activities relocated to controlled factory environments and on-site installation compressed into days or weeks, opportunities for late-stage verification or reactive adjustments – common in traditional, site-based projects – are significantly reduced. In the end, the cost is not just inefficiency, but erosion of trust; of reputation; and of the long-term stability that digital transformation was meant to secure in the client’s organisation.
BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026 33
PREFABRICATION
Clearly defined EIRs are foundational to the health and resilience of the industry. When structured with clarity and purpose, EIRs enable the supply chain to assess its own readiness – digital competencies, ICT infrastructure, and the financial implications of participation. This foresight allows bidders to allocate resources for upgrades and training, aligning capability with ambition and ensuring that digitalisation objectives are not just declared, but delivered.
...Even a single overlooked obligation to produce digital deliverables can tip the balance between profit and loss. Contractual structures in BIM are seldom linear. Though the client’s formal ties often extend only to the lead appointed party – typically a designer or contractor – the creation of information containers ripples outward through nested layers of subcontracting. Guided by the chosen federation strategy, these teams may unfold into intricate constellations, each entity tethered by its own agreements and degrees of visibility. Yet, when EIRs are composed with clarity and purpose, they possess a quiet resilience – capable of traversing this hierarchy with coherence and intent. This clarity is especially critical for SMEs operating at the lower tiers where margins are thin and competitiveness high. In such environments, even a single overlooked obligation to produce digital deliverables can tip the balance between profit and loss.
...Prefabrication becomes a precision tool to navigate R-code limitations, transforming regulatory boundaries... With a more methodical and purposedriven approach to defining EIRs, the integration of BIM and prefabrication could become a national instrument for transformation. By way of illustration, Australia’s ambition to deliver 1.2 million well-located homes over five years, as outlined in the National Housing Accord , is not merely a construction challenge; it is a societal imperative. Yet this ambition is tempered by density regulations, material disruptions, and a widening skills gap – factors that threaten to stall progress unless met with coordinated innovation. In this context, pre-fabrication technologies such as volumetric construction offer more than operational relief. By alleviating labour shortages and streamlining fragmented supply chains, it reconfigures how capacity meets demand. When paired with high-density infill developments, prefabrication becomes a precision tool to navigate R-code limitations, transforming regulatory boundaries into opportunities for urban renewal and sustainable intensification. But the viability of such developments rests not on engineering alone. It hinges on investor confidence in innovative business models that reward energy efficiency, attract eco-conscious tenants, and qualify for green financing incentives; confidence in climate
34 BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026
resilience data that defends long-term asset value; confidence in transparent ESG reporting that earns public trust and regulatory alignment. These are not abstract ideals. These are scaffolding of tomorrow’s built environment and the OIRs that must be translated into structured, actionable EIRs. When this translation is done with clarity and intent, the supply chain is empowered to respond with precision: leveraging BIM to deliver the right data, at the right time, with the right integrity to investors. The result is not just smoother procurement or cleaner compliance but a recalibration of risk, reputation, and return. For investors, the above opportunity is not simply to fund housing – it is to shape portfolios that do not merely perform but endure. This is to participate in a movement where digitalisation is not a cost centre, but a safeguard against socio-economic fracture. In this light, EIRs transcend technicality – they become instruments of foresight. The future they enable is one worth building.
This article was written by Chamil Erik Ramanayaka from CQUniversity, based on a research paper published in the Construction Economics and Building Journal.
STANDARDS
STANDARD METHOD OF MEASUREMENT: WHY NOT SO STANDARD? By Ryan Marschke MAIQS CQS
INTRODUCTION Let’s start by saying that we’re not suggesting that the industry resorts back to the glory days of traditional ‘guaranteed’ Bills of Quantities. However, if you weigh up the benefits of relying upon industry-recognised measurement standards versus the risks of going rogue, BoQs have got to be worth more careful consideration. If you’re involved in the planning or delivery of construction works, it’s likely that you’re familiar with the term Bills of Quantities or BoQs. You’ve likely encountered something that loosely resembles a traditional BoQ. However, the definition of a BoQ, and the understanding of a BoQs potential to add value, has been significantly diluted and misrepresented in recent times. To the point where anything that includes measurements of material quantities compiled in a list is at times being referred to as a BoQ.
BILLS OF QUANTITIES – BY DEFINITION The AIQS Australian Cost Management Manual (ACMM) defines a BoQ as, “A detailed trade-based measure of quantities in accordance with the current standard method of measurement for the purpose of tendering and contract administration...”
BoQs are essential for transparent and accurate cost and commercial management of construction projects. Traditionally, BoQs were prepared by a quantity surveyor or others with a sound understanding of the various industry recognised measurement standards. You say “BoQ” to a quantity surveyor and they will immediately interpret this to be detailed measurement and pricing prepared strictly in accordance (possibly with minor deviations) with an industry recognised standard. However, amongst the broader industry the term BoQ is sometimes referring to contract pricing schedules, material take offs (MTOs), or tender returnable schedules.
THE CURRENT BOQ LANDSCAPE When it comes to BoQ production, we commonly encounter these four scenarios: •
Scenario 1 – The author of the BoQ is short for time/fees, doesn’t completely understand the value in having a well-prepared BoQ, and therefore develops a partially completed ‘shopping list’ of items that is intended to (but rarely does) reflect the complete proposed work scope; and/or
•
Scenario 2 – The author of the BoQ is the only person who has a clear view on how the BoQ is to be interpreted and administered, and gets frustrated that others can’t follow the intentions and perceived logic; and/or
•
Scenario 3 – The author of the BoQ places little emphasis on having a well-prepared BoQ on the assumption that the receiving party/someone down the track will develop something more logical and complete; and/or
•
Scenario 4 – The author of the BoQ is unaware that measurement standards, that could complement the initiative they are working on, even exist.
Relying upon sub-standard BoQs for any cost planning, tendering, procurement, or commercial management initiative presents major exposure, creates confusion, and usually adds unnecessary complexity to an already challenging working environment.
BoQs have been around in one form or another for over 300 years.
BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026 35
STANDARDS
BILLS OF QUANTITIES – BEST PRACTICE
•
The work described in a BoQ is defined using different methods of measurement, each with a set of measurement and pricing ‘rules’ that are identified thanks to the item descriptions.
Australian Standard Method of Measurement of Civil Engineering Works and Associated Building Works – AS1181, and
•
Various standards developed by state road authorities such as the QLD Department of Transport and Main Roads (DTMR), Transport for NSW (TfNSW), etc.
•
Traceability – cost plan, becomes tender, becomes contract price, becomes contract pricing schedule, becomes progress claim, etc.
•
THE BENEFITS OF RELYING UPON RECOGNISED STANDARDS
Accountability – Justification/ learnings from each project (e.g., cost overruns) can be accurately reported upon and lessons learnt incorporated into future projects
•
Below is a list of benefits that can be realised by relying upon recognised standards throughout the planning and delivery of construction works:
Reporting – Improved linkages between cost, programme, etc. Also improved reporting (cost forecasting, earned value, etc.)
•
Risk Management – Opportunity to create risk adjusted cost plans/ estimates. Also the opportunity for scenario-based risk modelling
•
Change Management – Improved understanding of the baseline provisions which can also be used as a point of reference for assessing change (variations, EOTs, etc.)
•
Accuracy - Margin for error and the potential to overlook scope is reduced by starting with an exhaustive list of items for consideration rather than building BoQs from the ground up (more robust considerations)
•
Benefits for All – Benefits (efficiencies, greater cost certainty and confidence, risk allocations, etc) shared by Clients, Contractors, Subcontractors, etc., as all parties get familiar with pricing the same work presented the same way
•
Quality Assurance – Producing BoQs can sometimes detect issues with the design, specification, etc (reliance documents) ahead of issues that would otherwise be encountered during the project delivery phase
Well prepared BoQs include: •
References to the relevant standard that underpins the workings
•
Detailed preamble notes and general items
•
A logical work breakdown structure (WBS)
•
Clear linkages between the BoQ items and the corresponding drawings, specifications, programme, and intentions of the WUC
•
Predetermined units of measure (m, m2, m3, etc.) that apply for each item
•
Standard item numbering/ coding used for ease of reference, analysis, and benchmarking, and
•
Provisional items and provisional quantities inserted where scope is anticipated but cannot be fully defined.
•
•
Provides further cost certainty and reduces commercial risk
•
Rich, comparable cost data for cost analysis and benchmarking purposes (to inform future estimates, tender evaluations, identification and realisation of value for money)
•
INDUSTRY RECOGNISED STANDARDS BoQs have been around in one form or another for over 300 years. Most standards are improved and revised over time to remain current, embrace innovation, and attend to potential oversights and omissions. Below is a list of reputable and frequently relied upon local Australian measurement standards: •
Australian and New Zealand Standard Method of Measurement of Building Works (ANZSMM)
Uniformed approach (a common language) that sets a professional baseline expectation for conforming cost plans, estimates, tenders, etc.
Improved estimating efficiency – recycle rather than build bespoke each time and build rate libraries to suit the items contemplated by the standard
•
Recycle the contents of the BoQ as a single source of truth to inform procurement, forecasting, project planning, asset management, reporting, taxation, etc.
•
Improved scope definition and removal of ambiguity surrounding pricing inclusions/exclusions
•
Correlation and linkages between the design/specification and the items in the BoQ
36 BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026
STANDARDS
•
•
Better Procurement – Well presented BoQs provided with procurement packages encourages better tender response rates and more competitive pricing, and Scalable – Others can join in at any stage and get up to speed quicker.
COMMON BOQ INHIBITORS When it comes to BoQ production, our industry frequently feels inclined to build something bespoke rather than relying upon already developed measurement standards. This is usually driven by the following factors which are often combined and have a compounding impact: •
Time/Fees – Time constraints and/or the perceived idea that the project can save on fees by rationalising the approach to BoQs, and/or
•
Inexperience – Project teams are inexperienced and unaware of the importance and benefits of maintaining standards, and/or
•
Education – Projects teams are unaware of the available measurement standards, and/or
•
Project Nuances – Project teams feel like existing measurement standards are not suitable for use on their project due to project specific constraints and complexities, and/or
•
Scope Definition – The project is lacking in scope definition that is required to underpin a detailed BoQ
•
Lack of Direction – Project teams embrace what they know – templates that may have been used in the past and/or utilised across other projects undertaken by the business or in their travels elsewhere.
All of these factors have undoubtedly contributed to the continual demise of the traditional BoQ and unrealised benefits of relying upon recognised standards. These factors are all centred upon the perceived idea that a rationalised approach to BoQ production can still serve the intended purpose whilst reducing time and fees. Of particular relevance the energy, communications, water, and wastewater sectors have a considerable amount of work to do to overcome this list of BoQ inhibitors. The works being undertaken by these sectors often blends together conventional civil works with more technical aspects. In our experience, the BoQs provided in these sectors require the most improvement if the desired benefits of BoQs are to be fully realised.
HERE IS OUR ADVICE Projects are often under extreme time and cost pressures, and we get that project teams have limited resources and many other competing priorities. Adherence to measurement standards should not be seen as ‘more work to do’, or an ‘added cost to the project’. In fact, adherence to measurement standards is relatively simple – read the standard and apply the rules. The standards include a predetermined, tried and tested recipe for success. Here is our advice: •
Consider the comprehensive list of benefits associated with relying upon industry recognised measurement standards that have been highlighted within this article
•
If you decide that you don’t have the time and/or fees, you should carefully weigh up the consequences. You must consider the time and/or fees involved in the production of BoQs in the context of the broader project.
For example: •
The extra time involved in producing the BoQ could be offset by the reduced time in tendering
•
The extra fees involved in producing the BoQ could be offset by the fees involved in managing change during project delivery and avoiding disputes.
•
If you are inexperienced with measurement standards, call on the help of a professional to upskill your team, or outsource to other skilled resources
•
If you go down the path of building a bespoke BoQ, at least support it with an agreed measurement plan or as much definition as possible to support its intentions.
THE WRAP UP We live in a rapidly changing world. The measurement and pricing landscape is developing to incorporate AI advantages and modern ways of working. We’re excited about the new possibilities that technological advantages could open up for cost control functions such as the development of BoQs.
This article was written by Ryan Marschke MAIQS CQS from Mersa.
BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026 37
STANDARDS
NZS39102023: TWO YEARS ON By Mike Hanson MNZIQS
38 BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026
STANDARDS
INTRODUCTION In October 2023, the New Zealand Standard NZS 3910 conditions of contract for building and civil engineering construction underwent a significant update, following an extensive consultation process driven by statute law. Historically, this standard is reviewed roughly every decade, with the previous update occurring in 2013. However, the process is anything but nimble, constrained by complex legal frameworks. As a result, practice notes/ amendments have not been issued to keep users abreast of the latest developments or legislative changes. Instead, the industry has relied on ad hoc special conditions, crafted by various participants for individual projects. NZS 3910 is reportedly used on 80% of construction projects across New Zealand. Yet, two years after its release, uptake of the updated standard has been slow, with most principals adopting a cautious ‘wait and see’ approach. While the standard now reflects current legislative requirements and introduces some positive improvements, several issues continue to lurk beneath the surface.
THE PERSISTENT PROBLEM OF SPECIAL CONDITIONS When Standards NZ scoped the review of NZS 3910, there was overwhelming consensus from the construction sector: the standard needed a comprehensive overhaul to reduce the reliance on special conditions of contract. The goal was to improve consistency, familiarity, and efficiency in construction contracting.
review, “The published result has not achieved that lofty goal and is unlikely to obviate the need for extensive special conditions or to discourage the use of other conditions of contract.” These words have proven prophetic. Two years on, projects based on the 2023 version have attracted extensive special conditions. There has been no meaningful reduction in their number. When the NZS 3910 review committee could not agree on an initiative, it was simply shelved, compounding the special conditions problem. For example, the “Good Contracting Principles and Guidance” document, published by the Master Builders Association (MBA) eight months after the 2023 update, contained many proposed sensible special conditions, despite the MBA being well represented on the review panel. Substantial, ad hoc special conditions are still being prepared by different lawyers, each bringing their own perspectives. This results in additional costs for both principals and contractors and reduces efficiency in construction contracting. The proliferation of special conditions also undermines the ‘plain English’ ideal, as multiple authors contribute to a patchwork of contractual language.
The practice of heavily amending standard contracts with extra clauses defeats the purpose of standardised contracts...
The Construction Sector Accord, a partnership between the New Zealand Government and the construction industry, once aimed to rationalise the type and number of special conditions on government agency projects, which often numbered over 300. The Accord found that not only was the risk allocation significantly altered but technical matters such as status report requirements were included, as well as duplication of legislative requirements. To quote the Accord, “the practice of heavily amending standard contracts with extra clauses defeats the purpose of standardised contracts. It means every project must spend resource, time, and effort in
...Emerging practitioners must navigate a patchwork of bespoke clauses and conflicting interpretations. understanding the intent of contracts and negotiating terms. This can lead to misunderstandings among the team, and difficult project relationships”. Unfortunately, this initiative was never completed, and the Accord itself has since been disbanded. This complexity does not just burden current projects – it creates a significant challenge for teaching contract administration to the next generation of construction professionals. Instead of learning a clear, consistent framework, emerging practitioners must navigate a patchwork of bespoke clauses and conflicting interpretations.
However, as construction law specialist John Walton noted in his January 2024
BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026 39
STANDARDS
This environment makes it harder to instil best practice, develop confidence in impartial decision-making, and uphold the principles of fairness and efficiency that standard contracts were designed to promote.
THE INDEPENDENT CERTIFIER (IC) MUDDLE Under the 2013 version of NZS 3910, the Engineer to the Contract (EtC) played a dual role: sometimes acting as the Principal’s agent, and at other times making fair and impartial decisions. Over the past decade, concerns about impartiality have led to separate people carrying out these roles i.e., the EtC and Engineers Representative (ER), respectively. Some Principals appoint separate individuals from different consultancies or an ER from their own organisation. This practice often muddles responsibilities and complicates project delivery.
...With the 2013 version potentially liability issues exist if the IC/EtC and CA/ER roles are undertaken by parties from separate firms. In an attempt to address these concerns, the NZS 3910 review committee formalised the separation of roles, introducing the independent certifier (IC) and contract administrator (CA). The CA is responsible for making ‘agreements’ with the contractor, while the IC has a certifying function and makes ‘decisions’ when the CA and contractor cannot agree.
This approach is unique; it is unlike the model adopted by any other standard construction contract, and it has led to some unfortunate consequences. These include potential duplication of roles, increased costs, and the fact that the CA, who is empowered to make the most important decisions, is not required to be impartial. Furthermore, unlike the EtC, the CA cannot delegate any duties – a restriction that is likely to be problematic on large projects. This model risks blunting the influence of the IC, (who is often the most experienced practitioner) by reducing them to essentially an arbitration role. As is the case with the 2013 version potential liability issues exist if the IC/ EtC and CA/ER roles are undertaken by parties from separate firms. Curiously, the contract allows the IC and CA to be the same person. Despite the title, as is the case with the 2013 version, the IC is not truly independent, as their fees are paid by the principal and when issuing final decisions, the IC will be determining disputes over their previous decisions. True independence could have been achieved by adopting the NZS 3915 model or something similar, where an agreed independent expert resolves disputes and fees are split 50/50 between principal and contractor. It should be noted that the construction industry also tried to address EtC impartiality concerns with the formation of the Society of Construction Contract Practitioners (SCCP) to improve the standard of EtCs and commit them to a code of ethics. It was expected that EtCs would largely be nominated from this group. Unfortunately, this group was formed too late to be collectively involved in the NZS 3910 review process.
40 BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026
CONCLUSION The issues with the 2023 version of NZS 3910 are likely to be addressed, at least in part, by further ad hoc special conditions, with all the pitfalls previously described. While some special conditions will always be necessary to address unique project requirements, the current situation goes well beyond this. This raises an important question: Is it time for the construction industry to take control of standard contract conditions and move away from the New Zealand Standards process? The NZS 3910 review committee included 25 people from 21 organisations. By contrast, the UK’s Joint Contracts Tribunal (JCT) has just seven member organisations. Ten years is a long time to wait for a standards update. The asserted inefficiency of the New Zealand construction industry is only exacerbated by the current contract situation. Could the industry appoint a focused, nimble committee, similar to the UK’s JCT, to compile and manage standard contract conditions that keep pace with industry trends and legislation, issuing practice notes/ amendments as needed for the benefit of all project participants or is the sector too fragmented for such a shift?
This article was written by Mike Hanson MNZIQS from RDT Pacific.
REFORMS
FROM INQUIRY TO INACTION A REVIEW OF CONSTRUCTION INSOLVENCIES IN THE DECADE SINCE THE SENATE ECONOMIC REFERENCE COMMITTEE INQUIRY By Sam Neave
BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026 41
REFORMS
A decade ago, the senate inquired into insolvency in the construction sector. They made 44 recommendations to which there has been little to no action. Reflecting on the financial year that has just concluded, we can see that construction insolvencies are rising and reached record levels. 3,491 construction firms lodged initial administration, or controller reports last financial year. This reflects a year-onyear increase of roughly 21%. Indeed, the sector has consistently ranked amongst the worst performers in the wider Australian economy. This isn’t, as the senate confirmed, the outcome of market forces. Rather, it reflects the deep-rooted structural deficiencies in one of the most crucial industries in the Australian economy. Rising construction insolvencies signal substantial challenges in addressing the housing crisis, job security, and critical infrastructure delivery. These challenges are exacerbated by the sectorial issues studied by the senate; namely, slow or non-payment of subcontractors.
...On average, the sector was burdened with $3 billion in unpaid debts annually. However, the issue is not new. Rather, the 2015 senate inquiry identified several economic and non-economic implications of non-payment and insolvency in the construction sector. The most immediate economic implication was irrecoverable debt. The inquiry found that, on average, the sector was burdened with $3 billion in unpaid debts annually. The senate heard evidence from several
subcontractors who, due to their status as an unsecured creditor, recovered little if anything during the wind-up of an insolvent head contractor. In the years since the inquiry there has been several examples of this. Notably, Probuild, who failed in 2021, owed 2,300 creditors between $250-300 million. On the 443 Queens St project in Brisbane alone subcontractors were owed $7-10
...The non-economic implications for families, individuals, and communities are likely high. million. The senate also noted the direct and indirect economic loss to the government. The Australian Tax Office is a creditor in 98.6% of all construction wind-ups, with an estimated $1.51.9 billion in irrecoverable tax debt annually. Indirect costs to the government were borne from the cost of legislative safety nets, like the Fair Entitlement Guarantee (FEG). Indeed, employees were found to be particularly vulnerable as they cannot securitise their entitlements. Alarmingly, employees of failed construction firms incurred a loss of $137 million, including $63 million in unpaid superannuation in FY2013/14. 17.6% of FEG claims were paid to employees of failed construction firms. The implications of insolvency went further than economics. The social impact of construction insolvency was noted by the Subcontractors Alliance as including, “the stigma attached to insolvency, the inability to restart, loss of personal property, marriages and tragically for some, their insolvency caused by others, ends in suicide”.
Further examples included an unpaid subcontractor’s inability to pay for their partner’s surgery. Given most failed construction firms are small-tomedium enterprises, the non-economic implications for families, individuals, and communities are likely high. Insolvency also impacts the sector’s productivity. The increased costs and time needed because of the failure of a construction firm stifles not only the productivity of the immediate project but also has flow-on effects throughout the supply-chain. Anecdotally, the Construction, Forestry and Maritime Employees Union (CFMEU) stated, in their submission to the inquiry, that, “if a subcontractor…is effected by a collapse on Project A, this can bring its operations on Project B, C, and D to a halt”. Productivity is further weakened by the increased cost of financing. Indeed, the Housing Industry Association (HIA) submitted that insolvency risk in the sector made it harder for firms to secure financing and consequently, win new projects. Addressing this issue may unlock several benefits for the Treasurer’s productivity ambitions. The inquiry also foreshadowed what has been sensationalised by reporting from The Age and Sydney Morning Herald on the presence of criminal activity in the construction sector. The senate noted the apparent use of outlaw motorcycle members to recover debts. In response, the final report argued that the proposed improvements to payment security mechanisms will, in part, address this concern. The Inquiry prefaced two reforms that would, “mark a sea change in the Commonwealth’s role in regulating payment practices in the construction industry”.
REFORMS
Namely, the enactment of a uniform, national legislation for security of payment and adjudication as well as a two-year trial of Project Bank Accounts (PBAs) on Commonwealth funded projects valued over $10 million. There has been little movement on either. Currently, each Australian jurisdiction independently regulates payment practices. This fragmented payment regime increases unfamiliarity among stakeholder, ultimately reducing its use. It poses challenges for firms that work across state borders, increasing administration resources that could otherwise be used for project delivery. Several reforms have been introduced in the various states; however, federal reform has not been politically supported.
The 2024/25 financial year marks the worst on record for construction insolvencies and a decade since the senate inquiry.
Meanwhile, there has been piecemeal reform, and more taxpayer dollars spent on similar government reviews, such as the Murray Review (2017) and Fiocco Report (2018). National, and indeed global debate continues around the issue of payment securitisation in the construction sector. For example, the UK construction sector has explored other payment security mechanisms, such as Digital Parallel Payment Accounts and Insurance-Backed Guarantees. The plethora of recommendations, be market or government led, speaks to the appetite for addressing poor payment practices and insolvency risk. However, the industry continues to favour inquiry over action.
This article was written by Sam Neave, Graduate Researcher at The University of Melbourne.
Similar, Project Bank Accounts (PBAs) have received little attention at the federal level. PBAs are a form of payment trust, whereby funds are secured and distributed directly to main and lower-tiered contractors simultaneously. In the years since the senate inquiry, PBAs have been trialled and implemented in Western Australia and Queensland. The 2024/25 financial year marks the worst on record for construction insolvencies and a decade since the senate inquiry.
BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026 43
BUILDING COST INDEX
DECEMBER 2025
THE BUILDING COST INDEX IS PUBLISHED IN THE PRINT VERSION OF THE BUILT ENVIRONMENT ECONOMIST. IT CONTAINS DATA THAT CAN BE USED AS A PREDICTOR FOR THE ESTIMATED TIMES FOR DESIGN AND CONSTRUCTION AND INCLUDES A SUMMARY OF THE PAST, PRESENT AND ESTIMATED FUTURE CONSTRUCTION COSTS.
44 BUILT ENVIRONMENT ECONOMIST: DECEMBER 2025 – FEBRUARY 2026
ADVANCING BUILT ENVIRONMENT COST PROFESSIONALS
Level 4, 35 Clarence Street, Sydney, New South Wales, Australia 2000 +61 2 8234 4000 www.aiqs.com.au