Lack of grassroots investment leaves Australia with an uncertain future

Earlier this week, the Commonwealth Bank of Australia published its “Bricks, bytes and bottlenecks” report outlining the impacts of Australia’s data centre boom.

Among the chief concerns identified was the limitations of the nation’s energy infrastructure, and the shortage of labour and resources required to keep pace with the data centre boom. The report stated, “Capacity pressures remain a serious challenge in the Australian economy and data centres will add to this pressure.”

The report acknowledged that cashed-up data centres, often backed by private technology companies, are generally capable of outbidding competing projects for the work of specialist trades.

“The build-out will require electricians, technicians, mechanical services plumbers, telecommunications cablers, engineers and project managers. As demand rises, existing shortages could worsen,” Commonwealth Bank economists claim.

“We expect data centre operators to partially crowd out other projects and/or push up construction prices.”

If skilled tradespeople are drawn towards these higher wages, little workforce will be left for critical infrastructure projects, including renewables, housing, defence projects, and public infrastructure.

In 2023, former Skills and Training Minister, Brendan O’Connor MP said: “We need to lift the focus on [training] quality to ensure students are getting the skills they and the economy need. Whether that’s from TAFE, Group Training Organisations, not-for-profit industry or private providers.” But that just hasn’t happened.

Within the electrical sector, industry-average completion rates for electrical apprentices within institutional models sit around 60%. Industry-led not-for-profit organisations have completion rates of upwards of 90%, substantially higher than the industry average, and yet receive only a fraction of the government’s investment in this area of training.

Tom Emeleus, National Electrical and Communications Association (NECA) Training CEO, said: “Only through increased investment in both sectors can Australia stand a chance of keeping up with skills demand.”

“NECA Training receives no government funding for training capacity and has to hope industry will become desperate enough to invest directly, but these skills come with a four-year pipeline,” Mr Emeleus said.

“Our facilities are full, and we’re turning people away. We call on government to invest in additional capacity for not-for-profit industry-led organisations who are achieving the best results, as well as TAFE. Without this comprehensive approach, the best value for money option is being left on the table. The community pays the price with available electricians pursuing higher pay in data centres, while critical workers for housing and other projects become harder to find.”