Building cost review to go to panel: PM

Victorian Premier Ted Baillieu says an independent review of construction costs is needed if the states are to avoid being priced out of infrastructure.

Prime Minister Julia Gillard has refused to appoint the Productivity Commission to the task, saying they have a full book.

Instead she will appoint a three-person panel of experts with building industry knowledge.

“They don’t have spare capacity. They are fully employed,” Ms Gillard told ABC Radio when questioned on the move on Thursday.

“There are decent people earning their money in building and construction who should not be the subject of anybody’s political games.

“If this is a genuine attempt to look at some of the cost drivers in building and construction then I’m happy to do it and I’m happy to get an expert panel to do it.”

Mr Baillieu said on Thursday he couldn’t believe the Productivity Commission was too busy.

He said only a few months ago the Commonwealth was spruiking the commission as being available to business.

The call for the investigation had explicitly said the review should be conducted by people remote from the building industry, Mr Baillieu said.

“We had some discussion about who would constitute that panel,” Mr Baillieu told reporters on Thursday morning.

“We put forward some individuals from certain organisations … with no vested interests. We were knocked back.

“I hear the prime minister saying we’re going to have three people from the building industry so that was news to me this morning.”

Mr Baillieu said he wanted a review into the escalating costs of major projects and general construction.

“It’s necessary because we’re pricing ourselves out of infrastructure in the future if we don’t,” he told ABC radio.

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