Paul Fletcher (Bradfield, Liberal Party, Parliamentary Secretary to the Minister for Communications) Share this | Hansard source

I am very pleased to rise to speak on the Building and Construction Industry (Improving Productivity) Bill 2013. This is an important step to address the growing culture of disrespect for the rule of law on building sites around Australia and, in turn, to improve productivity in the vital construction sector. This bill will achieve that objective by doing several important things: firstly, by re-establishing the Australian Building and Construction Commission to enforce the rule of law applying in this sector; secondly, by prohibiting unlawful industrial action, unlawful picketing, coercion and discrimination and by delivering significant penalties for breaches of the law; and, thirdly, by providing a wide range of remedies, including injunctions, to the Australian Building and Construction Commission and persons affected by unlawful behaviour.

In the time available to me this evening, I want to make three points: firstly, that productivity in the building and construction industry has been very poor, largely thanks to the conduct of unions in the sector and particularly the CFMEU; secondly, that the Australian Building and Construction Commission addressed in a very successful and effective way the problem of poor productivity in the building and construction sector during the Howard government years; and, thirdly, that with this legislation, should it pass into law, we will again see an improvement in productivity in this vital sector of our economy.

Let me turn first to the proposition that we have seen a reduction in productivity, a reduction in performance in the construction sector, thanks to a wide-ranging disregard for the rule of law by building sector unions over the years of the Rudd-Gillard-Rudd governments and particularly following Labor's Fair Work (Building Industry) Act 2012, which led to a sharp decline in standards of behaviour in this vital sector. Indeed, it is no exaggeration to say that we have seen a return to the bad old days of lawlessness in this sector. We have again seen aggressive and militant union behaviour becoming commonplace. We have seen site shutdowns, we have seen strike action and we have seen other industrial action occurring regularly.

Indeed, we saw a strikingly large number of high-profile, large-scale industry disputes under the Rudd-Gillard-Rudd governments—for example, at the sites at which Lend Lease, the big building company, was operating in the ACT, New South Wales, Queensland and Victoria in July 2012. We saw the notorious disputes at Grocon sites, mainly in Victoria, in August and September of 2012. We saw the episode at the Queensland Children's Hospital between August and October 2012. In Victoria, in October and November 2012, we saw industrial disputation at the Little Creatures brewery. In February of this year at the Werribee water treatment plant, again we saw egregious examples of union conduct, particularly by the CFMEU, showing a flagrant disregard for the rule of law.

I was pleased earlier this year to be appointed to chair a coalition working group on re-establishing the Australian Building and Construction Commission. Together with parliamentary colleagues, in the month of August, I met with many participants in the building industry, and we learnt about the violence and the intimidation which, I am sorry to say, has accompanied industrial action by the CFMEU at many construction sites—for example, at the Myer Emporium site in Melbourne, where CFMEU officials engaged in extensive intimidation directed at Grocon workers who wanted to go to work on the site.

We heard instances of the unions insisting on construction companies paying for union delegates to work on the site and spend their time entirely on union business, not on the business of getting the building built. We heard shocking examples of union militancy, including one example where the unions commenced a shutdown halfway through a concrete pour, which meant that the concrete subsequently had to be jackhammered out at a cost of several hundred thousand dollars and many days of lost time.

Indeed, this consultation process was a thoroughly eye-opening experience in learning that during the Rudd-Gillard-Rudd years the construction sector unions had been engaged in 1970s style militancy and disruption. We also heard alarming evidence of increasing degrees of corruption and criminality. We heard that it is not uncommon for union officials to openly ask contractors and subcontractors for money. That will be justified or described in many different ways, but that appears to be a pattern.

We heard anecdotes that subcontractors will not be retained by head contractors unless they are on a CFMEU approved list. In other words, if you are a subcontractor wanting to go about business in the building and construction sector—the way things have been operating under the Rudd-Gillard-Rudd government—and you are black-listed by the union, no head contractor will be prepared to engage you to work on a site.

We heard troubling stories, troubling anecdotes and troubling reports of criminality, drug dealing and other things on building sites. We also heard numerous reports, and this is a matter of historical record, of the CFMEU routinely disregarding court orders and routinely failing or delaying in the payment of fines which had been imposed on it by the courts.

It is troubling indeed that, in the building and construction sector, unions exercise considerable control over matters which would typically be the exclusive responsibility of the management of a business. For example, they routinely dictate to contractors who they must employ as occupational health and safety representatives on a site. We heard numerous examples of uneconomic and unreasonable terms being included in enterprise-bargaining agreements at the insistence of the CFMEU or other unions.

Such lawlessness has profound economic and social consequences. It results in lost productivity and in construction costs being higher than they ought to be. Indeed, an independent report prepared for the Master Builders Association estimated that, if things did not change, 75 per cent of the productivity gains that had been achieved during the Howard years thanks to the Australian Building and Construction Commission were at risk of being lost.

That leads me to the second point I want to make, which is that the record of improvement in productivity, of improvement in performance, in the building sector during the Howard government years under the Australian Building and Construction Commission is an impressive record. The evidence speaks for itself. During the period that the Australian Building and Construction Commission was in existence, before it was white-anted by the Rudd-Gillard-Rudd government, there was substantial evidence of improved productivity. According to one study, building and construction industry productivity was boosted by 9.4 per cent. In the 10 years leading up to 2012, which was the last year that the ABCC in its old form existed, multifactor productivity in the construction industry increased by 16.8 per cent. Indeed, the construction industry was one of only three industries that experienced increased labour and multifactor productivity growth in the 2000s when compared to the 1990s.

Another very telling piece of evidence is that in the ABCC years the number of days lost due to industrial disputation fell very sharply. Between 1995-96 and 2000-01, that is to say before the ABCC, the days lost to industrial action in the building and construction industry averaged 159,000 per year. Once the ABCC arrived, that rate dropped sharply. By 2007-08, it was down to a mere 8,000 days a year. So it was 159,000 days pre ABCC and a mere 8,000 working days lost due to industrial disputation in 2007-08, post ABCC. That reflects, amongst other things, the clear and demonstrated preparedness on the part of the ABCC to pursue unlawful conduct and to do it without fear or favour. It pursued unlawful conduct on the part of unions and on the part of building companies equally—and indeed on the part of any other industry participant.

The ABCC built a reputation as a tough, strong, determined regulator. Let me give you one instance which was repeatedly pointed out to me and my colleagues during our consultation process. When the ABCC was notified of a dispute, its inspectors would frequently or typically arrive on the building site within an hour of being notified. This was a proactive and effective regulator. But once it finally ceased operation in 2012, after the sustained period of white-anting under the Rudd-Gillard-Rudd government reached its peak, you saw a very rapid turnaround. Between 2011-12 and 2012-13, just in that one year, working days lost rose from 24,000 to an estimated 89,000, an astonishing jump in just one year. Over half of the gains achieved by the ABCC in working days lost turned to dust and ashes once the ABCC was gutted by Labor.

The final point I want to make is that the legislation before the House this evening, if passed into law, will once again improve productivity in the vital building and construction sector. We have been in the dark ages under the Labor government, but with this bill we will come into the light, into a new era of productivity and efficiency.

This coalition government is committed to ensuring that the rule of law is maintained in the building and construction sector and that workers are able to go to work free of the kind of base intimidation and harassment which has regrettably been a feature of the modus operandi of the CFMEU over the past few years—a modus operandi which it has been allowed to proceed with without interference, unrestrained by government or its agents. It is no wonder that confidence in the building and construction sector dropped very sharply. But this bill, if it passes into law, will restore order, will restore confidence and will ensure that the rule of law is enforced, and its building-industry-specific provisions, including much tougher penalties for breaches of industrial law, will maintain order. And, in turn, this legislation will again encourage productivity and again encourage the pursuit of high levels of employment in the sector.

The bill makes it clear that there are significant penalties for taking unlawful industrial action or for engaging in or organising an unlawful picket, and this is an important and necessary step in view of the kind of conduct we have regrettably seen on building sites all around the country over the past few years.

The bill also gives the Australian Building and Construction Commission the power to be effective in investigating and in enforcing the law. The bill will give the ABCC the power to compel witnesses to provide evidence in relation to suspected contraventions of workplace relations law. Now, we have seen some ill-informed criticisms of this measure from the other side of the House, but I make the point that these powers are quite consistent with those granted to other regulators such as the ACCC, ASIC, the Australian Taxation Office and Medicare, and these powers are necessary given the culture of silence, based on fear and intimidation, which has prevailed on building sites. Employees on building sites have been simply too frightened to speak. They have been subjected to a culture which very strongly discourages them from saying to the regulator what has actually happened. That is why this particular power is necessary and that is why it is included in this bill.

I conclude by saying that the measures in the bill before the House this evening are of the first importance. Should this bill pass into law, these provisions will encourage productivity and employment growth in the building and construction sector. This is something that the coalition can do. It is something that the previous Rudd-Gillard-Rudd Labor government could not do because it owed the CFMEU far too much. But we are ready to do so and we are prepared to do so, and we are acting in the national interest.

See this speech in context