Sussan Ley (Farrer, Liberal Party, Shadow Minister for Childcare and Early Childhood Learning) Share this | Hansard source

I move:

That the Building Code 2013, dated 25 January 2013, made under the Fair Work (Building Industry) Act 2012 and presented to the House on 6 February 2013, be disallowed.

One can attack this introduction of a building code from many perspectives. But the main ones that I want to highlight to the House tonight are that the motivation for such an introduction of this piece of legislation is suspect, and that the drafting has been appalling. The motivation was suspect and the drafting was appalling.

As members know, the Fair Work (Building Industry) Act 2012 enables the Minister for Employment and Workplace Relations to issue a code of practice. The code would apply to builders tendering for federal government work and would apply to their privately funded work once they are covered. The act provides that where work is to be carried out in a territory or Commonwealth place that a person who is a building contractor, a constitutional corporation or a building industry participant is required to comply with the building code.

On 30 January this year, the minister announced, out of the blue, that there would be an introduction of this building code. Previously, everyone had operated under a code and guidelines and had not been locked into legislation. A process that began in 1997 admittedly has been watered down by the present government—I think in 2009 in 2012—because it is very clear that the government does not want the tough cop on the beat in the building industry that the coalition have pledged that we will have, and that we have always had.

They watered down the code but then suddenly created this piece of legislation. I keep coming back to why. It was under the cover of the Prime Minister's announcement of an election campaign: the minister actually announced it on 30 January and then said it was to come into effect, as in fact it did, two days later on 1 February. The point is that this code introduces extensive obligations that appear not to have been completely and properly assessed in terms of the regulatory burden placed on the industry. The hapless department was left, as usual, holding the baby after the minister stepped out and made his announcement. Of course the stakeholders approached the department saying: 'What does this all mean? What does it mean for us? What about the existing Victorian code?'—and we will come back to that—'How does it match up with this new Commonwealth code that we never expected, and will it mean a whole lot more red tape?

The department promised 'frequently asked questions', as they often do when they try to cover the minister's back. But the frequently asked and answered questions were promised two weeks later and I think they appeared perhaps in the last couple of weeks. They are on the website, but I do not think that builders and people involved in this critical construction industry should rely on frequently asked questions on the department's website to get information that they should have got directly from this minister and directly through an appropriate consultation process.

Indeed, Senator Eric Abetz, the shadow minister in the other place, was quite rightly concerned that a regulation impact statement was deemed not to have been required. The code was issued, as the senator said, with no stakeholder consultation and has imposed significant new requirements and replaces implementation guidelines immediately—there are no transitional provisions. In particular, though not required by the Fair Work Act, similar to the 2012 implementation guidelines, the previous watered-down version, the code now mandates that arbitration clauses be included in all enterprise agreements entered into by participants. There will be some enterprise agreements previously assessed as being code compliant that do not contain such clauses and suddenly obviously cause problems.

The Department of Finance and Deregulation has issued a reply that does not satisfy the coalition. It simply says that the proposal was unlikely to have a huge impact. We completely disagree. I will take you back briefly to some of the history. The coalition established the Australian Building and Construction Commissioner in 2005 in response to the Cole royal commission that found that the building and construction industry was characterised by widespread disregard for the law. It catalogued over 100 types of unlawful and inappropriate conduct. The commission found that existing regulatory bodies had insufficient powers and resources to enforce the law.

We implemented a code of conduct for the building and construction sector following the Cole royal commission because we do support that tough cop on the beat and a strong code, but Labor have weakened the code, have abolished the ABCC and have allowed a culture of thuggery and intimidation to develop. We believe this must be addressed. Our policy released a fortnight ago does exactly that. As we all know, we will restore the ABCC. It was indeed a tough cop on the beat. It took a strong stand against union thuggery in the building and construction industry. It had a strong and effective building code. It helped that industry to increase productivity by 10 per cent, providing an annual economic welfare gain of $6.2 billion a year. It reduced inflation by 1.2 per cent and increased GDP by 1.5 per cent. The number of working days lost annually per 1,000 employees in the construction industry has fallen from 224 in 2004 to 24 in 2006. At the same time building costs have fallen by 20 to 25 per cent and long project delays have been dramatically reduced.

These are the criteria by which we should judge measures such as this. How much does it cost a state like Victoria to build its infrastructure? If a code of conduct restricts the actions of unions and union thuggery in the workplace and therefore keeps those costs viable and competitive in a tough international market then why would the government do anything less than this?

Today we seek to disallow this instrument so we may send a clear message that the coalition supports the tough cop on the beat and that the coalition importantly believes that state governments should be allowed to set their own procurement guidelines. The rushed and botched implementation of this code was of course in response to the Victorian government implementing its own code. Why shouldn't the states have the right to build their infrastructure in a cost-effective manner? The commercial reality is that construction costs are 20 to 30 per cent more than they should be. Victoria has recognised this and Victoria has introduced its own code. The guidelines require tenderers for public sector work in Victoria to commit to compliance with the law, productivity, safety and freedom of association. Unlike this national code of practice, Victoria requires that tenderers for major projects submit detailed plans that identify their approach to various matters, including workplace safety, dispute resolution, response to industrial action, right of entry, management of subcontractors, and communication and consultation with the workforce.

It is a perfectly sensible plan that the Victorian government requires of anyone wishing to do government paid building work. I want to know what it is about the Victorian code that the minister disliked so much that he had to introduce this national code.

Mr Shorten interjecting—

The minister mentioned the Federal Court. I understand the decision is on appeal. The Victorian government has agreed to make some changes to its code in recognition of some of the concerns that were raised and it has decided to appeal to the full court. We will wait and see what happens to that.

I want to reflect on some of the concerns that have been raised about this building code by the Master Builders, who represent an enormous cohort of the industry. I think they have been treated very poorly in this process. They have not been consulted. They have been directed to the department's website where frequently asked questions have eventuated and they have been basically left to work it out for themselves. The issue of no consultation is important because it is easy to say 'regulatory burden' and 'red tape' but that actually adds enormous costs, and the costs of compliance are weighing down people operating in this sector. So there was no consultation.

The minister has a clear obligation to take into account recommendations, for example, of the FSC. The FSC has an interesting relationship with the body that will implement the FWBC. The explanatory statements have not made it clear how the FSC and its requirements will interact with occupational health and safety measures that will be introduced by the FWBC. Importantly, this code creates new work health and safety obligations. The explanatory statement does not acknowledge that, because it says and the minister says that it is just business as usual; it just codifies existing obligations. You would think a new code would bring about the streamlining and certainty that people in the industry expect. It should make the administration of complying with work health and safety obligations easier. It should not make complying with work health and safety obligations harder by adding another layer of regulatory requirements and burdens.

As it stands, building and construction industry enterprises wishing to undertake Commonwealth construction projects must meet work health and safety obligations that are established by various statutes in various jurisdictions and administered by a range of regulators and agencies. This code does not actually replace those requirements; it has been imposed on top of this bewildering body of entwined arrangements. The building and construction industry will now be obliged to meet the requirements set out in: the Building Code 2013; that code's supporting guidelines; the Fair Work (Building Industry) Act; the Fair Work (Building Industry-Accreditation Scheme); the Australian Government Building and Construction OHS Accreditation Scheme; state and territory OHS laws; state and territory accreditation schemes; and obligations established by modern awards and other industrial instruments. It is ridiculous that this code's explanatory statement says that there are actually no new obligations created. That is not the case. The introduction of the code has brought about this huge range of new compliance obligations.

With the introduction of the code there are more work health and safety requirements on building and construction industry enterprises as well as more regulators. Section 20 of the code requires that building and construction enterprises must have a Work Health, Safety and Rehabilitation Management System in place and it specifies what the system must entail. Everyone must be exhausted when they hear words like this—another plan, another system!

Of course the system has to show all sorts of things. You have to say that you have a management system, and I guess that is not in itself a revolutionary redevelopment, but making it mandatory under a Commonwealth statutory instrument is a material change. Such a requirement does not exist under current work health and safety laws. There is no direct prescription of a specific management system approach elsewhere, but under this code building and construction industry enterprises will need to conform to a prescription when establishing and implementing their management systems.

One of the things I noticed in the requirements of this system is that it has to demonstrate how they will improve practices over time. How can you demonstrate that? Who is looking at this? Who is there with the statutory backing of compliance behind them to be able to say, 'I do not think that is good enough. That does not measure up to the type of plan we expect.'? Imagine the regulatory burden this is imposing in the area.

The broad nature of the code's obligations raise the question of how it is intended that the extent of these obligations will be placed not just on contractors but also on subcontractors, a sector that generally is not completely captured by the code. There is a section—section 6 of the code—that draws subcontractors into compliance with the code in a way that extends wholly beyond work on government projects. The effect is that a building contractor and a building industry participant, the subcontractor, will be compelled to comply with the code for all the work they undertake, government related or otherwise, as soon as they submit an expression of interest or tender for work on a government project. Once the threshold of government-related work has been triggered, the section of the code sets out that contractors and subcontractors are subject to the code for all their building work. So if you submit to a government project and you are unsuccessful, you and your subcontractors are subject to the code, it would appear, for all future building work. I would like the minister to actually address that point in his response.

I know that the frequently asked questions on the website and the not-so-frequently answered questions sort of do hint that maybe that would not be the case, but it is not appropriate, really, that builders rely on a website to get their information from a government that refused to consult with them in the first place. How ridiculous that if you tender for government work and you are unsuccessful, you and the subcontractors that may be associated with you are then captured and caught by this code even for your privately funded building work. That is a regulatory bridge that is totally unacceptable.

The ramifications would be extraordinary and it is difficult to contemplate realistically how these requirements of the code could be regulated with any effect anyway by Fair Work Building and Construction without the imposition of yet another burdensome paper based compliance and reporting system. The obligation on contractors to comply with the code before doing business with them has the effect again of drawing in the work undertaken by subcontractors on nongovernment projects. Another regulator is now enforcing work health and safety obligations in respect of the building and construction sector. FWBC, Fair Work Building and Construction, will be required to monitor and ensure that work health and safety requirements are met. So we are drawing work health and safety into the federal jurisdiction, with Fair Work Building and Construction holding the power to investigate the compliance of builders with OHS law, which it did not previously have to do, which previously came under a completely different set of regulations. I am getting tied up talking about this, but it is not surprising and I cannot imagine how anyone can untangle the mess, the regulatory and compliance mess, that will be imposed by this.

I would like to conclude by just reiterating the coalition's approach in this area and make it quite clear that we will ensure right of entry by unions with provisions that are sensible and fair. The coalition government will ensure that union right-of-entry provisions are sensible and fair by making sure that they are modelled on the Prime Minister's 2007 promise that said, 'We will make sure that the current right-of-entry provisions stay.' This promise was broken. Unions were given much easier and far broader access to workplaces under the Fair Work laws—in one case up to 200 visits in three months. A coalition government will change the law so that these provisions are modelled on the promise that Labor made in 2007 and we will oppose Labor's recent attempts to go even further.

We will re-establish the Australian Building and Construction Commission to ensure that it maintains the rule of law, that it drives productivity on commercial building sites and construction projects whether onshore or offshore. We recognise how effective the ABCC was in addressing workplace militancy and improving productivity in the building and construction industry, and we have seen how productivity has dropped in that industry under this government. We will replace this government's failed Fair Work Building and Construction unit and will administer a national code and guidelines that will govern industrial relations arrangements for government projects. This step will ensure that taxpayers' dollars are used efficiently. We will work with state governments who have put in place their own codes—a New South Wales code is underway and I understand that a Queensland code is being talked about. We believe in state rights. We do not want to jump all over the right of individual states to manage their own infrastructure projects according to their own procurement guidelines in ways which ensure that they get value for the dollar.

So I am very pleased to have moved this disallowance motion this evening. I encourage members who may not have made up their minds to urgently consider supporting the coalition and I present this motion to the House.

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