Australian construction and property industries tackle modern slavery
On the international day of remembrance of victims of slavery, new research reveals the lengths Australian property and construction businesses are going to to end the scourge
3 min
Concerns about modern slavery usually focus on the garment and technology sectors but new research in Australia has focused on ways of identifying and dealing with the scourge in construction supply chains.
The Property Sector’s Modern Slavery Act Response Research Project is a joint project between Bond University, Better Sydney and Informed 365, an Australian tech company focused on monitoring compliance and supply chain transparency under the Australian Modern Slavery Act 2018.
The Act mandates annual reporting for companies with revenues of more than $100 million. The Global Slavery Index 2022 estimates that modern slavery accounts for nearly 50 million worldwide. Since the Act was introduced, company boards have been held responsible for public statements made by their companies on their abilities to assess and manage the risk of modern slavery in supply chains. The construction industry is considered to be particularly vulnerable thanks to the lack of visibility over long and complex supply chains, as well as the high demand for a low-skill labour force.
The research project, released to coincide with the International Day of Remembrance for the Victims of Slavery, was tasked with examining the Australian industry’s ability to cope with assessing and managing reports of slavery in the supply chain. It follows on from the launch of the Property Council Supplier Platform in 2019 by the Property Council of Australia and Informed 365 to provide a digital platform for the local property and construction sector to collect, compare and understand supply chain data on human rights and modern slavery.
Supply chain slavery issues are notoriously complex to identify but Property Council national policy director Francesca Muskovic said modern slavery in construction impacts millions of people in Australia and abroad and needed to be addressed at a national level.
“Our industry provides jobs for more than 1.4 million Australians – more than mining and manufacturing combined. This extensive influence places us in a unique position to address the social impacts of our activities and improve people’s lives,” Ms Muskovic said.
She said despite the challenges, the Australian construction and property industry sought to improve human rights outcomes both here and overseas.
“Our supply chains are geographically diverse, multi-tiered and complex. Understanding the human rights and modern slavery risks within them is essential in helping the industry make their supply chains more ethical and sustainable,” Ms Muskovic said.
“The property sector has forged a world-leading position on environmental sustainability, and it is pleasing to see leaders continue to step up their efforts on social sustainability.”
The research revealed that while 88 percent of suppliers to Australia’s leading construction and property firms understand what modern slavery is and 44 percent reported they had processes in place if a human rights incident or modern slavery was identified, smaller firms were less prepared.
“Many smaller firms were not aware of supply chain issues due to a lack of engagement, resources or audits, so there were mixed results in terms of supply chain mapping and risk assessment,” said Robin Mellon, CEO of Better Sydney, Board member for the UN Global Compact Network Australia, and Project Manager for the Property Council’s Human Rights and Modern Slavery Working Group.
“The report found 56 percent of suppliers who assessed their supply chains beyond their own immediate suppliers found some human rights issues or concerns, showing how important it is to investigate all levels of supply chains.”
Designed to better understand the challenges, strengths and opportunities for the property sector to improve its response to slavery, the research is part of Australia’s ongoing contribution to eradicating it worldwide.
Mr Mellon said access to resource materials are key to helping property and construction businesses stay informed.
“There are now excellent learning materials available through the Property Council, the UN Global Compact Network Australia, and anti-slavery organisations to help engage, educate and support suppliers towards continuous improvement,” he said.
As housing drives wealth and policy debate, the real risk is an economy hooked on growth without productivity to sustain it.
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As housing drives wealth and policy debate, the real risk is an economy hooked on growth without productivity to sustain it.
3 minFor decades, Australia has leaned into its reputation as the lucky country. But luck, as it turns out, is not an economic strategy.
What once looked like resilience now appears increasingly fragile. Beneath the surface of rising property values and steady headline growth, the Australian economy is showing signs of strain that can no longer be ignored.
Recent data paints a sobering picture. Australia has recorded one of the largest declines in real household disposable income per capita among advanced economies.
Wages have failed to keep pace with inflation, meaning many Australians are working harder for less. On a per capita basis, income growth has stalled and, at times, reversed.
And yet, on paper, things still look relatively solid. GDP is growing. Unemployment remains low. But that growth is increasingly being driven by population expansion rather than productivity.
More people are contributing to output, but not necessarily improving living standards.
That distinction matters.
For years, Australia’s economic success rested on a powerful combination: a once-in-a-generation mining boom, a credit-fuelled housing market, strong migration and a property sector that rarely faltered. Between 1991 and 2020, the country avoided recession entirely, building enormous wealth in the process.
But much of that wealth is tied to property. Around two-thirds of household wealth sits in real estate, inflated by leverage and sustained by demand. It has worked, until now.
The problem is the supply side of the economy has not kept up.
Housing supply is falling behind population growth. Rental vacancies are near record lows.
Construction firms are collapsing at an elevated rate. At the same time, massive infrastructure pipelines are competing with residential projects for labour and materials, pushing costs higher and delaying delivery.
The result is a system under pressure from all angles.
Despite near full employment, productivity growth has stagnated for years. In simple terms, Australians are putting in more hours without generating more output per hour. The economy is running faster, butgoing nowhere.
Meanwhile, government spending continues to expand. Public debt is approaching $1 trillion, with spending now accounting for a record share of GDP.
The gap between spending and revenue has been filled by borrowing for decades, adding further pressure to an already stretched system.
This is where the uncomfortable question emerges.
Has Australia become too reliant on a model driven by rising property values, expanding credit and population growth?
As asset prices rise, households feel wealthier and borrow more. Banks lend more. Governments collect more revenue. Migration fuels demand. The cycle reinforces itself.
But when productivity stalls and debt outpaces real income, the system begins to depend on constant expansion just to stay stable.
It is not a collapse scenario. But it is not particularly stable either.
Nowhere is this more evident than in housing.
The National Housing Accord targets 1.2 million new homes over five years, yet current completion rates are well below that pace. With approvals falling and construction costs rising, the gap between supply and demand is widening, not narrowing.
Housing is also one of the largest contributors to inflation, with costs rising sharply across rents, construction and utilities. Yet the private sector, from small investors to major developers, is struggling to make projects stack up in the current environment.
This brings the policy debate into sharper focus.
Tax settings such as negative gearing and capital gains concessions have undoubtedly boosted demand over the past two decades. But they have also supported supply. Removing them may ease prices briefly, but risks deepening the supply shortage over time.
That is the paradox.
Policies designed to make housing more affordable can, in practice, make the shortage worse if they discourage development. The optics may appeal, but the economics are far less forgiving.
It is also worth remembering that most property investors are not institutional players. The majority own just one investment property. They are, in many cases, ordinary Australians using real estate as their primary wealth-building tool.
Undermining that system without replacing it with a viable alternative risks unintended consequences, from reduced supply to higher rents and increased inflation.
So where does that leave Australia?
At a crossroads.
The country can continue to rely on population growth and rising asset prices to drive economic activity. Or it can shift towards a model built on productivity, innovation and sustainable growth.
The latter is harder. It requires structural reform, long-term thinking and political discipline.
But it is also the only path that leads to genuine, lasting prosperity.
The question is no longer whether Australia has been lucky.
It is whether it can evolve before that luck runs out.
Paul Miron is the Co-Founder & Fund Manager of Msquared Capital.
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