Queensland’s $104b project boom at risk: funding gaps, labour shortages, and cost pressures challenge infrastructure ambitions

The Queensland Major Contractors Association (QMCA) has unveiled its 2024 Queensland Major Projects Pipeline Report (QMPPR), projecting an unprecedented $103 billion infrastructure pipeline over the next five years.

This 13th instalment of the QMPPR, created with Oxford Economics Australia and Construction Skills Queensland (CSQ), marks a substantial 13 percent increase from the $92 billion forecasted last year, positioning Queensland for what QMCA CEO Andrew Chapman calls “a golden decade” of infrastructure investment.

However, as the report reveals, this potential is tempered by a set of critical challenges. Nearly 40 percent of the pipeline—around $41.6 billion—remains unfunded, presenting a significant risk to Queensland’s ambitious infrastructure agenda. “Queensland is on the verge of a golden decade of infrastructure investment and delivery,” Andrew said. “We are seeing unprecedented investment in critical sectors, including hospitals, housing, energy transition, transport, and the Brisbane 2032 Olympic and Paralympic Games infrastructure. There is immense opportunity ahead, but we must be prepared to tackle the challenges.”

A Boom in Infrastructure Investment

The QMPPR shows a state-wide commitment to major projects, with $71 billion slated for delivery between 2025/26 and 2027/28. Key areas of growth include healthcare, housing, and utilities, with major transport initiatives and Olympic-related infrastructure also set to transform Queensland’s urban landscape. Andrew noted that this year's pipeline expansion is partly driven by revised project costs, with $2.4 billion attributed to rising economic pressures.

“While we welcome the increased value of the 2024 pipeline,” he noted, “it’s important to recognise that 20 percent of this growth reflects adjustments due to cost escalation.”

Public sector projects make up a significant portion of the funded work, with contributions from both state and federal governments. The 2024 QMPPR is a testament to Queensland’s commitment to upgrading essential infrastructure, particularly in the face of growing demands from population growth and the upcoming Olympics. But as the report highlights, the success of these projects relies heavily on the availability of funds and resources, with the unfunded segment increasing risks for project delays and completion.

Key Challenges Facing the Pipeline

In addition to funding gaps, Queensland’s infrastructure plans face labour shortages, rising costs, and regulatory delays. CSQ data shows a rapidly increasing need for construction workers, with projections indicating a peak demand of around 38,500 by 2026/27, compared to the 16,600 required this year. This demand is largely driven by renewable energy and heavy industry projects located in regional Queensland, including areas like Fitzroy and Wide Bay. “We need to build capacity and train workers to ensure we can meet demand,” said a CSQ spokesperson, who pointed out that expanding training programs and attracting underrepresented groups, such as women and Indigenous Australians, are essential for workforce sustainability.

The report further details the pressures caused by sustained construction cost escalation, even as global supply chains stabilise. While cost growth in 2023/24 eased to 4 percent from the previous year’s record 8.2 percent, high domestic costs remain. Labour expenses, construction materials, and equipment like diesel and bitumen contribute to continued price pressures that threaten project feasibility and budget adherence.

Andrew explained, “The opportunities that the expanding pipeline presents are vast. We need to invest in supply chain capacity to meet projected demand in sectors like quarries, concrete production, and steel fabrication.”

Regional Disparities in Project Funding

The report highlights significant variation in project funding by region. While regions like Wide Bay are set for rapid growth, driven largely by the $14 billion Borumba Pumped Hydro Project, others have seen declines in project funding. The latest QMPPR reveals that funding in six regions—including Cairns, Brisbane, and Townsville—has decreased since last year, largely due to the reshuffling of state priorities and budget constraints. In contrast, Fitzroy and Mackay-Isaac, with high concentrations of mining and industrial projects, remain vulnerable due to their high levels of unfunded work.

Further complicating this situation is the dominance of “mega projects” (those valued over $1 billion) in the funded pipeline, which has increased to 58 percent of pipeline value over the next three years. While such large-scale projects bring major economic benefits, they can also hinder smaller contractors’ access to the market.

Andrew stressed, “It is critical to balance project sizes to sustain the entire sector,” calling for an approach that ensures both mega projects and smaller, accessible projects that engage a wider range of industry participants.

Regulatory and Approval Delays

In addition to funding and workforce challenges, regulatory delays have added further complexity to project delivery. Andrew outlined several factors impacting project timelines, including lengthy approval processes under the Environment Protection and Biodiversity Conservation Act (EPBC) and the influence of Best Practice Industrial Conditions (BPIC) policies. These policies have stretched procurement and project initiation timelines by as much as a year, limiting industry responsiveness and creating bottlenecks that ripple through the project pipeline.

The report advocates for a more streamlined regulatory environment to support efficient planning and project delivery.

In a call for reform, Andrew explained, “Changes to policy that support safe, productive sites and collaborative project delivery will enhance industry efficiency.”

He added that a coordinated approach across government agencies could avoid some of the delays that have impacted recent projects.

Responding to National Policy Changes

Queensland’s infrastructure ambitions have also felt the impact of recent federal policy shifts. The Commonwealth Government’s 2023 review of infrastructure funding led to the deferral and restructuring of several projects, with 2024/25 works expected to fall short of initial projections by 11 percent, and a further 13 percent reduction anticipated for the current fiscal year. “This has had a significant impact on Queensland’s market,” Andrew explained, noting that many projects have been delayed or reshuffled to balance cost pressures on existing projects. He observed that these delays affect public confidence, particularly among private investors, who rely on government-funded infrastructure to unlock their own projects.

Pathways to Success: Collaboration and Innovation

Despite these challenges, Andrew remains optimistic about Queensland’s future, emphasising the need for a collaborative approach to project delivery. He encouraged partnerships between the public and private sectors to provide “fit-for-purpose” infrastructure solutions, where both sides can optimise their contributions to project funding, labour, and materials. The QMPPR highlights the need for private sector engagement, urging policies that support safe and productive worksites and foster a culture of collaborative procurement.

Andrew also stressed that “innovation will be key” in overcoming labour shortages and cost constraints, advocating for investment in digital tools, automation, and new construction methodologies to improve efficiency. He highlighted that new technologies not only offer immediate productivity benefits but also serve as long-term investments in industry capacity.

The report suggests leveraging technology and upskilling the workforce as vital steps to reduce dependency on traditional labour-intensive processes.

Looking Forward: A Transformative Decade for Queensland

The QMPPR indicates that Queensland’s construction sector is set for a transformative decade, with large-scale investments poised to redefine the state’s infrastructure landscape. Upcoming projects span diverse sectors, from healthcare and education to energy and the 2032 Brisbane Olympics infrastructure. These investments are expected to trigger a wave of economic activity across the state, providing job opportunities and stimulating regional development.

However, Andrew and the QMCA stress that achieving these goals will require strategic planning, a skilled workforce, and robust public-private collaboration. “We have an opportunity to establish a collaborative approach between government, industry, and other stakeholders to deliver best-practice project delivery,” Andrew said. He underscored the importance of efficient processes and strategic partnerships to ensure that projects remain on schedule and within budget, providing value to Queenslanders while supporting sustained industry growth.

As the infrastructure pipeline continues to grow, Andrew concluded that the focus should remain on efficiency, collaboration, and innovation. By addressing the funding gaps, navigating labour and resource shortages, and fostering a supportive regulatory environment, Queensland has the potential to realise the benefits of its ambitious infrastructure pipeline, creating lasting value and economic resilience for the state.

To access the full report, click here.