Queensland Report on Construction Productivity

 More recommendations and reform directions focused on regulation and planning

 

 

The Queensland Productivity Commission (QPC) released their interim report on Opportunities to Improve Productivity of the Construction Industry on 31^st July. Construction productivity has recently been the subject of two other reports, with this one following the NSW Productivity and Equality Commission report Housing Supply Challenges and Policy Options in August 2024 and the Productivity Commission report Housing Construction Productivity: Can We Fix It? in February 2025. 

 

The motivating force behind the three reports is a political requirement to be seen to be doing something to address the housing crisis, which is fundamentally due to a mismatch between a long-term lack of supply of new dwellings and the high level of demand, driven by a combination of increased immigration and decreased household size. The result has been rising house prices, falling affordability, particularly for first home buyers, increased rents and very low vacancy rates. Another factor is the high level of engineering construction, due to the size and number of transport and energy projects, many of which are for the public sector. Queensland also has the effects of additional demand from the 2032 Olympic Games projects, currently estimated at $7 billion (which based on other Olympic Games will be much more).

 

The QPC report says ‘While many problems were identified, stakeholders were generally confident that better outcomes are possible. There is broad agreement amongst stakeholders, for many of the solutions identified, on how to address the problems facing the industry.’ Unfortunately, some 342 pages later, most of the problems discussed are about regulation and planning, onsite construction productivity barely gets a mention, there is no evidence stakeholders are in agreement on solutions and more information is requested for the recommendations, and how the problems will be addressed is not included because ‘Implementation issues, including prioritisation and sequencing, are not considered in this interim report but will be considered in the final report.’

 

This post starts with the QPC interim report’s terms of reference and Queensland construction productivity, then looks at the recommendations and reform directions in the report. Some of the report’s  key points on planning and approvals and regulation are covered, and other important industry issues and opportunities not addressed in the report are discussed. 

 

The Terms of Reference Were Extremely Broad

 

To understand how complex the issues surrounding  construction productivity are and why this report (and the others) are so unsatisfactory it is necessary to start with the terms of reference given to the QPC (heavily edited to key points) :

 

•        Conditions in Queensland’s housing market, residential development, and non-residential construction, including housing supply and affordability;

•        Key trends including input costs, prices, competition, and supply chain developments;

•        Factors shaping Queensland’s productivity including legislation and regulation, industrial relations, procurement policies and labour force needs;

•        Opportunities for improvement including regulatory and non-regulatory mechanisms;

•        Priority areas for reform in the short, medium and long term (including labour, skills and competition, suitability and availability of qualified head contractors and sub-contractors etc.);

•        Impact on small and medium scale subcontractors in regional areas and their ability to compete for government tenders due to regulatory requirements;

•        Availability of labour, skills development, and matching supply with demand;

•        How government procurement and contracting arrangements affect construction productivity, including Best Practice Industry Conditions (BPICs are wages and conditions on public projects introduced to encourage enlistment of workers);

•        Barriers to entry, investment and innovation in the sector.

 

Including issues around government procurement and contracting allowed the QPC to address some important productivity determinants that were not in the other recent reports. However, the problem is the breadth of these terms of reference, and the loose or long-term relationship many of the others have with onsite construction productivity, which is what is being measured by the statistics. 

 

The QPC report, and the NSW and Productivity Commission reports that preceded it, are not really about construction productivity, which is being used as a stalking horse for the long-term lack of supply of new housing. These reports are more concerned with the complex, cumbersome and sclerotic planning and approvals process that deters, delays and prevents residential construction, and the effects of regulation and the building code.

 

Queensland Construction Productivity

 

The QPC found Queensland construction productivity is only 5 per cent higher than it was in 1994-95, compared to a 65 per cent increase in labour productivity in the market economy. As Figure 1 shows, the variation in aggregate productivity is explained by compositional changes due to the rapid growth and subsequent decline in heavy and civil engineering activity in the LNG investment boom.

 

Figure 1. Queensland productivity

 

This is also what a previous post on construction productivity in the states and territories found. In 2014 the Australian mining boom peaked with the value of work done reaching $80 billion in Queensland, mainly due to construction of three LNG plants. The pro-cyclical nature of construction productivity is clearly seen in Figure 2 as gross value added (GVA) per hour worked followed the fall in the volume of work, which declined by around 30 percent in Queensland [1].

 

Figure 2. Gross value added per hour worked and construction work done

Sources: ABS 5220, ABS 6150, ABS 8755.

 

The quotes below on the causes of slow productivity growth have been taken from the QPC report.

 

‘Although empirical evidence on the causes of slow productivity growth is incomplete, it suggests that regulation is likely to have played a key role’:

·      Evidence from the United States and New Zealand suggests restrictive land use regulation may have made it more difficult and expensive to construct housing and other buildings [2].

·      Research suggests there have been significant increases in the complexity of building regulation, which has increased overheads and construction costs.

·      Regulatory design, including regional variations, have created incentives that keep the industry fragmented and dominated by smaller firms, who are less likely to innovate and have lower productivity.

·      Where regulators have poor incentives or are underfunded, results in unnecessary delays, high administrative costs and poor oversight, which can undermine productivity.

 

‘Recent changes to the National Construction Code (NCC) have been adopted without a case being established that they would provide a net benefit to the community. Similarly, Queensland introduced its trust accounts framework without undertaking a regulatory impact assessment.’

 

‘While regulatory issues seem to be a key driver of poor performance over longer time periods, more recent productivity declines seem to have been materially impacted by policy choices relating to Queensland Government procurement.’ 

 

‘Insufficient attention has been given to how procurement practices or new projects are impacting the market. This has been exacerbated by poor project selection.’

 

‘Government procurement practices, particularly BPICs, have created unnecessary inefficiencies’

 

The Report’s Recommendations and Reform Directions

 

The preliminary recommendations are ‘specific reforms that the Commission is seeking feedback on.’ There are 21 recommendations, of which six are on planning and approvals, and four on the NCC and regulation. The recommendations are:  

 

·     Government procurement - recommendations 1, 2 and 3;

·     BPICs removal –  recommendation 4;

·     Planning and approvals – recommendations 5, 6 (infrastructure charges), 7, 8, 9, and 10;

·     Regulation –  recommendations 11 (NCC), 12 (building codes), 13 (minimum financial requirements), and 14 (trust accounts);

·     Modern methods of construction (MMC) – recommendation 15;

·     Worker health and safety – recommendations 16 and 17;

·     Workforce – recommendations 18 and 19 (occupational licensing), and 20 (mobility);

·     Utility connections - recommendation 21.

 

The reform directions are ‘areas where there is a clear case for action, but the Commission is seeking further information to support the development of specific recommendations.’ There are 12 reform directions, of which

 

·    Government selection and staging of infrastructure – reform direction 1;

·    The pre-qualification system – reform direction 2;

·    Re-setting industry practices and increasing competition – reform direction 3;

·    Tendering and contracting, including building information modelling (BIM) and collaborative contracts - reform direction 4;

·    Planning and zoning reform – reform directions 5, 6 (community support);

·    Review of regulations – reform directions 7 and 8 (QBCC);

·    Worker health and safety - reform direction 9;

·    Workforce - reform directions 10 (training), 11 (migration), 12 (labour hire).

 

There are also two requests for information, on the 2024 Energy Queensland Union Collective Agreement, and on foreign investor taxes and housing construction. 

 

If the aim really is to improve construction productivity, recommendations would be focused on improving project management, logistics and supply chain efficiency, increasing investment in machinery, equipment and software, contractual relations and the structure of the industry. While the recommendations on procurement are important, and with those on workforce development and industrial relations relevant to productivity, the majority of the QPC’s recommendations are on legislation, regulation, and the planning and approvals process. 

 

A comparison with the 2024 NSW Productivity and Equality Commission report Review of Housing Supply Challenges and Policy Options for NSW is useful. That report found barriers to housing supply included high construction and borrowing costs, capacity constraints in the construction sector, and bottlenecks in the development process, with over half of the 32 recommendations on planning. It recommended reforming planning to streamline the development process and reduce approval times, and reviewing planning policy because ‘prescriptive rules’ on land block innovation. Other recommendations included education and skills, business regulations and tax, improving infrastructure and transport, replacing stamp duty with a land tax, establishing an Urban Development Program to report on the housing market and a housing supply council to advise on housing targets, and incentives for local government to meet targets. It argued for non-regulatory approaches wherever possible, and avoiding excessive regulation. While there are many overlapping recommendations, this is a more ambitious agenda than the one envisaged by the QPC. 

 

The structure of the QPC Interim  Report echoes the Productivity Commission’s February report, which had five issues and seven reform directions. The PC’s issues were: the complex and slow approvals process; fragmentation due to regulation; the lack of innovation; the regulatory burden; and workforce issues. The reform directions were: coordinated and transparent planning approvals and appropriately funded regulators; review building regulations and the NCC’s objectives; implement ratings systems on new and existing building quality; increase diffusion of technology; public research and development funding; reduce regulatory impediments to MCC; and improve workforce mobility and flexibility. The PC suggested states should consider establishing coordination bodies to speed up the process and address delays such as the Queensland State Assessment and Referral Agency, which got two mentions but no discussion in the QPC report [3]. 

 

The Planner Productivity Problem

 

Over 45 pages the QPC details regulation of land use that ‘can be complex, restrictive, inconsistent across local governments, inconsistent between regulatory instruments and impose costly and unnecessary requirements’, a planning system that ‘is complex, difficult to navigate, inefficient and lacks transparency and accountability’, and approvals processes that ‘create uncertainty, have high transaction costs, require expensive or unnecessary modifications to building design or cause excessive delays.’ 

 

The QPC recommends an alternative development pathway for significant developments [4], amending the Planning Regulation, and reviewing the Building and Planning Acts. The Government should ‘investigate digital planning and permitting technologies to improve the efficiency, accuracy and transparency of the approval process.’ To ‘build community support for housing development’ the QPC suggests improved consultation, citizen panels, independent hearing panels, and negotiable conditions. To improve zoning financial incentives for local government might be used. 

 

It is universally recognised that the time and cost of development approvals is a problem, but that is an issue of planner productivity not construction productivity. Research from YIMBY Melbourne found ‘In 1986, for every practicing planner, Australia built around 54 homes. Now, we build fewer than nine homes per planner. A planner 40 years ago was on average responsible for the development of six times the number of homes per year than a planner working today.’ 

 

Figure 3. Planner productivity

Source: There is no planner supply shortage, YIMBY Melbourne Research Note. 

 

The Research Note concluded ‘The demand for planners has mainly increased not through an increase in construction output and project delivery, but through an increase in regulatory process and complexity.’ This is QPC’s reform direction 4, and addresses 

the problem that development projects such as new housing estates and apartment complexes can take ten years or more to complete, with most of the time spent getting approvals. 

 

Regulation and the NCC

 

The QPC says ‘evidence suggests that several regulations affecting the construction industry are not effective or efficient, and are likely to be reducing productivity. Building regulations are becoming more complex with increased risk they are impeding productivity. Reduced levels of attention are being paid to the costs of new regulation, with regulatory best practice not being followed.’

 

Figure 4. The Queensland building regulation system

 

 

The outcome is the QPC’s view that recent changes to NCC 2022 for liveable housing and energy efficiency have increased construction costs, and ‘regulatory impact analysis undertaken showed these benefits were unlikely to justify the costs they impose.’ The recommendation is for Queensland to opt out of NCC 2022 and ‘only adopt future NCC changes in Queensland codes where these have been through robust regulatory impact analysis to demonstrate they provide net benefits to the community.’ 

Under Reform direction 8 ‘consideration should be given to whether the regulatory framework underpinning the QBCC provides the right incentives for ongoing

improvements to regulatory performance.’

 

Modern Methods of Construction and BIM

 

There is a short chapter in the interim report on MMC, included in the section on regulation. The QPC argues there is no market failure and no reason for government intervention to promote MMC. The report makes some general observations about regulatory barriers to MMC, none of which are new, and did not endorse MMC as an alternative to conventional building. There is no discussion on the cyclical boom-bust nature of residential building, which makes industrialisation of modular and prefabricated housing difficult, the reluctance of most banks to finance modular and prefabricated houses, and the lack of standards or an industry quality assurance accreditation system for modular and prefabricated buildings. 

 

The QPC acknowledges the existence of the MMC program that QBuild and the Office of the Queensland Government Architect have, which is a partnership with 12 industry suppliers to supply housing in regional and remote areas. In 2023 QBuild established a training and production facility at Eagle Farm in Brisbane, and two more production facilities have since opened in Zillmere in north Brisbane, and Cairns in Far North Queensland. 

 

Although QBuild has the best developed MMC program in Australia that has produced over 500 houses, the QPC does not discuss or make any recommendation on the program. The QPC did not use the opportunity to report data from QBuild on MMC productivity, costs and time performance, or provide feedback from occupants on the build quality and  liveability of their houses, or from users of modular or prefabricated public buildings like schools and hospitals. 

 

Another oversight is the lack of discussion on the use of Building Information Modelling (BIM) or other digital tools like design for manufacture and assembly (DfMA). These are making offsite manufacturing of building modules and components more efficient and have been used for over a decade. At the end of the section on Contracting for Efficiency the QPC asks for information on ‘the key barriers to increased adoption of digital technologies, such as BIM, and the policies or practices that would allow the opportunities for digital technologies to be fully leveraged.’

 

Queensland has had a BIM mandate for public projects over $50 million since 2019, however the QPC does not think this worth mentioning or, worse, investigating. This was another missed opportunity to assess the costs and benefits of their BIM mandate, and the failure to recommend its retention and/or extension a mystery. Also, the BIM mandate is under the Queensland Department of State Development and Infrastructure, which has a 2024 Infrastructure and Workforce Productivity Plan with details on current and planned initiatives, The QPC does not refer to this plan or its effectiveness [5]. 

 

Industry Issues

 

There are other important industry issues not discussed, starting with construction costs and the volatility of the building cycle. Improving productivity through better project management and reform of the VET system are also overlooked. There is no discussion of digitisation and automation, digital tools and platforms, AI enhanced systems, and automated planning and code compliance checks. Also, industry contractual relationships and risk allocation are not considered. Subcontracting is flexible and a method to manage costs and risk, but direct employment has a smaller span of control and is more efficient. 

 

Although there is extensive coverage of building regulation and the NCC, the QPC does not discuss building defects and the lack of implementation of the 2018 report Building Confidence: Improving the Effectiveness of Compliance and Enforcement Systems for the Building and Construction Industry Across Australia recommendations on mandatory inspections and fire safety. Nor is the problem of flammable cladding in Queensland in the report, where from 2019 to 2023 there was a Safer Buildings Taskforce to advise the government on policies and actions and how to rectify combustible cladding. In August 2025 three public buildings still needed rectification and some unknown number have been rectified and removed from the online list on The Department of Housing and Public Works page, which says: ‘As of 31 May 2024:

·       976 private buildings require a solution to address cladding risk;

·       308 are potentially at risk and need to complete the checklist process;

·       345 have notified of removal or rectification.

 

Although the terms of reference were to look at other jurisdictions, there is no discussion of the NSW iCIRTsystem, developed by ratings agency Equifax, for assessing contractor and consultant capability and performance, despite clear evidence of the effectiveness of the system in NSW in improving building quality and addressing the problems of building defects and phoenixing by developers and contractors. Discussion of the 10 year latent defects insurance scheme that has started in NSW is also missing. 

 

Conclusion

 

The QPC has focused on regulation and planning as the main issues, but these are just two of the factors that affect onsite productivity, and arguably skills, technology and project management are more important. Also, while no-one disputes the importance of issues like costs, prices, competition, the supply chain, labour, skills, occupational licensing, procurement and contracting, these have been discussed and dissected over and over again. The QPC makes no new contribution to these issues.

 

The QPC’s 21 recommendations and seven reform directions are in four key areas. The first is improving government procurement policies, where well-known ideas on collaborative contracting, and selecting, sequencing, and sizing of public projects are recycled. These would all make the Queensland Government a better client and would probably increase productivity on public projects, but that can only have a small effect on the overall level of construction productivity in the state because most of the work done is for the private sector. The Queensland Government (and the other Australian Governments) have received these recommendations many times over the years. 

 

The second key area is improving land use regulations, including approvals and zoning, which are a third of the recommendations. The QPC does not directly address the reality that local government opposes new housing, although it does recommend an alternative development pathway for significant developments and reviewing the Building and Planning Acts. The issue here is planner productivity, which has fallen as regulatory complexity has increased, not construction productivity. Planning and zoning decisions have no effect on supply side issues such as the cost of construction materials and mortgage finance for new housing, providing the infrastructure needed for new developments, and the rate of conversion of approvals into commencements by developers.

 

The third key area is the regulation of building activity. The QPC recommends opting out of the 2022 NCC updates on building accessibility and thermal performance because of their cost effects, reviewing the regulatory framework and performance of the QBCC, and pausing rollout of trust accounts while investigating their costs and benefits. The QPC argues no government support for MMC is required, but regulatory barriers should be addressed. 

 

The fourth key area is improving labour market operation, mainly through reform of apprenticeship and training pathways, occupational licencing, skilled overseas migration, labour hire licensing, and allowing recognition of qualifications from interstate. These issues were recognised and had similar recommendations in the NSW and Productivity Commission reports. 

 

What the QPC report shows is that construction productivity in general, and residential productivity in particular, is being used as a stalking horse for the lack of supply of new housing. As in the previous reports from the NSW Productivity and Equality Commission and the Productivity Commission, the main focus is on a sclerotic planning and approvals process that delays and often prevents new housing. The real issue there is local government opposition to new housing and planner productivity, not construction productivity. 

 

Houses are larger and apartments smaller than a few decades ago, but how they are procured and built, and what they are made of, has not substantially changed in decades. Fundamentally, that is also why the level of productivity has not changed. While there are more electrical appliances and offsite manufacturing of trusses, windows, doors and cabinetry, the building structure and services like electricity, water and plumbing in a 1960s dwelling are those found in a new build today.

 

Construction in general and housing in particular has a well-established system of production that is efficient and flexible. It will only change if and when there is a clearly superior method of delivery that is also profitable. Tinkering with regulations, the NCC, planning and approvals processes, and occupational licensing might make a difference at the margin, but will not deliver the big improvement in productivity that is required. For that a commitment to increased digitisation and automation is necessary, with government policies, procurement and finance aligned. 

 

There are some glaring omissions in the report. The QBuild MMC has produced over 500 houses, but the QPC does not discuss or make any recommendation on the program. Queensland has had a BIM mandate for public projects over $50 million since 2019, however the QPC does not think this worth mentioning or, worse, investigating. There is almost no discussion on the use of BIM or other digital tools like design for manufacture and assembly. Construction costs and the volatility of the building cycle, improving productivity through better project management and reform of the VET system are also overlooked. Although there is extensive coverage of building regulation and the NCC, the QPC does not discuss building defects and the lack of implementation of the 2018 Building Confidence report. 

 

The productivity issues in the QPC report are not new and can be found in many other reports on the industry, although there are some that are specific to Queensland. The interim report’s recommendations are limited and most would be little more than modifications to the current system. While those may be worthwhile, because the current system can clearly be improved, there is no suggestion that a more radical approach might be needed or taken.

 

                                                            *

 

[1] The effect of the mining boom was the subject of a 2023 post on The Long Cycle in Australian Construction Productivity using GVA per person employed.

 

[2] The US research was discussed in an October 2024 post Recent Research on Construction Productivity.

 

[3] Discussed in the post Housing Productivity Report a Missed Opportunity on the  Productivity Commission’s report Housing Construction Productivity: Can We Fix It? 

 

[4] The QPC does not refer to the NSW Housing Development Authority, established in January 2025 to approve State Significant Developments and rezonings. By August it had approved 187 projects with over 70,000 dwellings. NSW has introduced a Pattern Book of six low and mid-rise housing designs with a 10 day approval pathway. Also in August, Victoria introduced a Single Home Code for deemed-to-satisfy houses that need no further approvals. This follows the Townhouse and Low-Rise Code introduced earlier in 2025.

 

[5] A 2021post was on BIM Mandates and  Construction Industry Policy

 Subscribe on Substack here:

https://gerarddevalence.substack.com/

Klein and Thompson’s Abundance: How We Build a better Future

Can future-oriented growth restore government capability and solve scarcity?

 

It's interesting the way some books arrive at the appropriate moment. This book had its genesis in articles written by the two authors a few years ago for their respective publications in the US, The Atlantic and The New York Times, and in Abundance they argue that liberalism has not only lost the ability build and deliver projects, but liberals and progressives have prevented building necessary things such as housing, renewable energy and public transport in the US through legislation, rules and regulation. For example, environmental regulation stops replacing fossil fuels with green energy and local zoning prevents housing developments. Basically, ‘To have the future we want, we need to build and invent more of what we need.’

 

One has to be careful about terminology. In Australia and Europe ‘liberalism’ generally means limited government and less intervention, which in the US would be called libertarianism, but the book is about the US, where ‘liberalism’ means civil liberty, social justice and regulation of industry. In the US, liberals and progressives are left or centre-left and opposed to conservatives on the right or centre-right (although these days the centre in the US is much diminished). Klein and Thompson say ‘a politics of abundance … asks what it is that people need and then organizes government to make sure there is enough of it … sometimes governments has to get out of the way, as in housing. Sometimes it has to take a central role.’

 

The majority of the book looks at the problems and issues involved in the social and political economic issues of housing, energy, health, and innovation. The problems of slower development and less delivery are well-known, and the outcome is various forms of scarcity: too little new housing, energy, medicines, infrastructure and technology. Klein and Thompson say ‘For years, we knew what we needed to build to alleviate the scarcities so many faced and create the opportunities so many wanted, and we simply didn’t build it.’

 

Klein and Thompson focus on the supply-side of the economy and believe economic growth should be revived before it is redistributed. They show the Biden administration loaded the CHIPS and Science Act with requirements to favour minority, veteran and female-owned businesses, and its industrial policy became hamstrung with red tape. They believe the major challenges of the twenty-first century, like the housing and climate crises, require a reorientation in ideas and a renewed emphasis on economic growth. 

 

One of the strengths of the book is its use of current relevant research on the issues. The authors are across contemporary thinking on these, and for those who are not engaged with policy debates this will be a valuable introduction. For those who follow these issues, there might not be much in the way of new information, however, that does not detract from the overall usefulness of these chapters [1].

 

There are many examples of the problems. They start with the housing crisis, where housing scarcity is due to restrictive zoning, regulations, requirements, and community veto, which collectively prevent housing from being built where it is most needed and raise house prices. In the US, cities and states with Democrat Party (i.e. progressive) administrations build so little housing that it has become unaffordable, while Texas, a state known for fiscal conservatism and a libertarian attitude toward business, has led in building both green energy and affordable housing. Exclusionary zoning laws and the right to appeal development proposals have prevented building of new housing in states run by progressives. 

 

California features in the examples. In one the only way to build a new social housing project in San Francisco with 145 studio apartments for chronically homeless people was to reject government funding and rely on private philanthropy, because that did not come with costly requirements to employ minority-owned or woman-owned contractors and meet onerous building standards. Another is California’s failure to build high-speed rail, after decades of development and billions of dollars in funding, in part because federal funding was tied to measures to reduce air pollution in poor communities, which determined where work started. 

 

Progressive policies have reduced the ability to build because environmental laws (in the US) allow anyone totake developers to court add delay, uncertainties, and cost to projects. The role of the National Environmental Policy Act is the most important issue here. While this legislation may have originally been intended to reduce pollution and prevent new fossil fuel power plants opening, they are now used to prevent new housing, solar farms and transmission lines, as permitting across state lines runs into the localism that also stops housing projects. The abundance approach emphasises enabling supply of these economic inputs such as energy, housing, transport and skilled workers, and making them plentiful and cheap.

 

Klein and Thompson advocate focusing on outcomes and outputs instead of processes, procedures and inputs, on how much actually gets built as a result of government spending rather than the amount of spending. They say the ‘big government-small government divide is often more a matter of sentiment than substance’ and their solution is to break through coordination problems.

 

The book also discusses funding for research in health and science. The first problem here is the process of grant application and assessment, which has ended up with a lot of ‘safe’ research on well-understood topics that does not produce breakthroughs. Not funding research with a high risk of failure also excludes new ideas that could lead to major new treatments or inventions. The second problem is that research funding has become process-driven, with up to half researcher’s time and money going on applying and reporting, rather than actually doing research. The third problem is the poor track record of turning inventions into products and industries in the US, where solar cells and microchips were invented but production is now in China and Taiwan. ‘The US needs a plan to build what it invents.’

 

Some of the most interesting parts of the book are on successful programmes run by governments during crises or emergency situations. Two examples are the development of penicillin in World War 2 and the rollout of vaccines during the COVID pandemic. Both show that the ‘mythology of invention’ as ‘eureka moments’ of discovery is wrong. Klein and Thompson argue ‘Politics should take technology more seriously. Innovation can make impossible problems possible to solve, and policy can make impossible technologies possible.’

 

The fortuitous discovery of penicillin in 1928 is often cited as one of the most important scientific developments of all time. However, ten years later there was no method to manufacture penicillin in bulk and only a handful of patients had been treated, some of whom died. In 1941, the U.S. government was looking for medical technology that would be useful during the World War, and they picked up the UK invention of penicillin and created a large team of scientists, technologists, and engineers to develop methods of mass production and distribution. The number of lives saved since the 1940s may be ‘hundreds of millions, if not billions.’ The lesson of penicillin is that ‘implementation, not mere invention, determines the pace of progress.’

 

The second example is Operation Warp Speed, which shortened the development time for a new vaccine from 10 years to 10 months in 2020. Again, this took a large team of many specialists, but the success of the programme was due to the removal of barriers to development such as extended trials and grant funding processes. Solving the science of mRNA, organising clinical trials, manufacturing and distributing the vaccine was all done by industry, but the government funded and coordinated the process, bought the vaccines, then provided them for free. The pandemic and its aftermath provide another lesson on the importance of government capability, from managing test kit distribution to vaccine deployment. 

 

It is not until the penultimate chapter that the book gets to the solution to the problems. In a section called ‘The Bottleneck Detective’ the authors argue is that government has to identify and remove the barriers to progress that have been created over the last few decades, ‘to recognize that wise policy begins with an investigation rather than an ideology.’ Sometimes this is about removing restrictions, sometimes it requires new programs, sometimes prizes or incentives like advanced market commitments will work (i.e. committing to buy a new product to accelerate its development, like vaccines or green cement). 

 

Although it is clear there are coordination problems in research grants, public administration, rules and regulations on energy, infrastructure and housing, the problems are distinct and different in each case, and they each have vested interests that will oppose any reforms. Can committing to future-oriented growth be the solution? Can government’s ability to act be restored? What is the right balance between a market- and state-led approach? 

 

One problem with the book is it focuses exclusively on the United States and how these issues are playing out between blue Democrat and red Republican states, where the economies of red states like Texas and Florida have grown significantly faster over the last few years than blue states like California and New York. Abundance is directed at progressives in the US, and wants to make it easier for the federal government there to do big things. That is understandable because, firstly, the authors are American, and secondly, how these issues managed in the US is highly specific and particular to that country. On the other hand, it's not like other places in Europe and Australia don't have similar difficulties in resolving these issues.

 

A second problem is a lack of detail on how, and how much, Klein and Thompson want to change regulations affecting infrastructure and housing developments. It is one thing to acknowledge the trade-offs required, but they do not go into details about how or which environmental laws should be amended and how NEPA should be revised. They say ‘What is needed here is a change in political culture, not just legislation.’ A change to less regulation and more growth is a challenge to the degrowth movement’s objectives, NIMBY objections to more housing in affluent suburbs, and conservationists opposing solar and wind farms. The ‘book has offered a critique of the ways that liberals have governed and thought over the past fifty years. It also reflects an opportunity open to liberals now.’  

 

The Abundance agenda of ecologically friendly economic growth, regulatory reform, more public investment in housing, infrastructure and technological progress, is an attractive idea. It will not appeal to anyone on the further extremes of the left or the right. Critics on the left will argue this undermines social democracy and the welfare system, and deregulation favours corporate interests. Critics on the right will argue it is anti-market, that building state capacity is about big government and managing the economy. Neither are accurate. 

 

There is, however, is something of a disconnect in Klein and Thompson’s agenda, and how to reconcile the deregulatory emphasis of Abundance with increasing government’s ability to develop policy and deliver projects will be an ongoing debate.  They conclude ‘What we are proposing is less a set of policy prescriptions than a new set of questions around which our politics should revolve. What is scarce that should be abundant? What is difficult to build that should be easy? What inventions do we need that we do not have?’ Their answer is to confront the reasons for scarcity, to increase supply, and to turn away from a politics of scarcity toward a politics of abundance. 

 

 

Ezra Klein and Derek Thompson, 2025.  Abundance: How We Build a better Future, Avid Reader Press/Simon & Schuster. 

 

 

 

 

[1] Two other books recently published on the issues in the US raised in Abundance are Why Nothing Works: Who Killed Progress—and How to Bring It Back by Marc Dunkelman, which mainly looks at building and infrastructure projects, and Stuck: How The Privileged and the Propertied Broke the Engine of American Opportunity by Yoni Appelbaum, on the decline in social mobility.