High wages threat to building jobs Construction firms and developers warn that building the industry is in a slump and high labour costs are unsustainable. BUILDING unions have been put on notice that extravagant wage levels are threatening jobs. Construction firms and developers warn that the industry is in a slump and high labour costs are unsustainable. The State Government says that construction has suffered too long from spiralling costs and industrial disputes. Beck Property Group director Sam Beck said the industry desperately needed a review of wage rates and other costs. "Cost of materials, of course, go up, but the labour cost has gone up exponentially over the last 10 years," Mr Beck said. It's getting to a point now where it's almost too expensive to build. Labourers on major CBD sites earn about $120,000 a year excluding allowances and enjoy special allowances, such as 26 rostered days off, 12 rain/heat days, 10 public holidays and 20 annual leave days. Your say in Victoria's future It has been estimated that apartments built with union labour cost 33 per cent more to build than those using non-union workers. Mr Beck said he wasn't a union basher, saying they promoted safety on sites and looked after workers' welfare. "But it's not much good having workers that are being paid so much that they don't get work, and that's what's happening in the industry at the moment," he said. There was a lot of work two or three years ago, it's drying up and we've got workers out there who still require their same rate, but the issue is the industry can't afford it. Master Builders Association of Victoria executive director Brian Welch said that projects were struggling to get off the ground and employers were warning of big layoffs soon. "They simply don't have the work to sustain their current work force," he said. "If there isn't moderation shown at the next EBA then I fear that the building industry is going to go into a massive slump," he said. State Industrial Relations Minister Robert Clarke said cost increases had threatened Victoria's ability to afford desperately needed infrastructure. "Labor's desalination plant project set a new standard for high-cost, low-productivity wage deals, and this has flowed through to much of the rest of the Victorian construction industry," he said. Victorian Trades Hall Council secretary Brian Boyd said that companies always whinged about paying building workers a reasonable wage. "It's a very dangerous, very hard-working industry and those building workers deserve every cent they get," Mr Boyd said. He said all enterprise deals were negotiated in good faith under industrial laws and employers could make their case for any changes when future agreements came up for discussion. Mr Boyd said that so-called sweetheart deals with unions had ended in the 1980s.