Jane Prentice (Ryan, Liberal Party) Share this | Hansard source

Integrity and honesty are qualities that are broadly accepted in our community; they are broadly accepted in politics. But there is one field where integrity and honesty are demanded of industry but are deliberately ignored, and that is when it comes to the building and construction unions, who blatantly misuse their power for quite improper purposes. Their power was enhanced by the Rudd-Gillard governments when they caved in to union pressure to remove quite sensible constraints on corruption and improper practices. This is why I am pleased to rise to speak on the Building and Construction Industry (Improving Productivity) Bill 2013.

It is time to ensure that there is a level playing field for industry and worker alike. Prior to the election, I was a member of the committee charged with the task of investigating the re-establishment of the Australian Building and Construction Commission. After Labor legislated to repeal the ABCC, the coalition made an election commitment to re-establish it to ensure that it upholds the rule of law and drives productivity on commercial building sites and construction projects, whether onshore or offshore.

The Australian Building and Construction Commission working group was established by the then Leader of the Opposition, the Hon. Tony Abbott, in July this year. I, along with my colleagues the members for Bradfield, Forrest and Kooyong, was tasked with examining the governance and practical problems in the construction sector, such as malfeasance and misconduct, as well as with developing a detailed plan, including drafting instructions for the prompt reestablishment of the ABCC.

The Building and Construction Industry (Improving Productivity) Bill re-establishes the ABCC to regulate the building and construction industry and provides for its functions and powers, including those of the ABCC inspectors. The coalition has pledged to drive productivity and end union control over the construction industry. We have also pledged an additional $5 million to the reestablishment of the ABCC in 2013-14, rising to an additional $10 million per annum in subsequent years.

This is great news for the many members of my electorate who have contacted me with their pleas to stop unions dictating the terms and control of their businesses and their employees. One constituent has informed me that, because he has chosen not to sign the CFMEU's EBA, the union has prevented his business from receiving any jobs in the city. For his small business, this has meant a net financial loss exceeding $500,000. He spoke of the unnecessary interruptions, intimidations and disruptions caused by union workers on his building sites choosing to carry out inspections whenever they chose—usually to cause the maximum inconvenience.

Evidence to our committee made it clear that aggressive and militant union behaviour is commonplace in the building and construction sector. Site shutdowns, strike action and other industrial action occur regularly and not for proper reasons or to protect the interests of workers. The committee received reports that the CFMEU and other unions frequently use purported safety issues as an excuse for industrial action when no such safety issues exist—that coercion of individuals and companies is a tool frequently used by the unions and their officials.

There is troubling evidence of increasing corruption and criminality in the construction industry. Key construction unions behave as if they are above the law—for example, routinely ignoring court orders to return to work. Through these improper practices, the CFMEU and other unions now have substantial industrial power and leverage, which they use to cause uneconomic and unreasonable employment terms for head contractors and, through them, subcontractors and across the industry through pattern bargaining. In addition, the unions exercise control over what should otherwise be commercial decisions, such as which subcontractors a head contractor may use, and control over detailed operational issues, such as whether a site operates beyond core hours.

This is happening because the Rudd-Gillard government, at the behest of the unions, terminated the ABCC, which the Howard government had established, replacing it with the much weaker FWBC. Another effective tool under the Howard government was the national code and implementation guidelines. To get work from the Commonwealth, a builder had to comply with the requirements of the code. This code was substantially weakened by the Rudd-Gillard government.

Our working group's hearings disclosed that the levels of strike action, site shutdowns and other industrial action are high. In some cases this action is lawful under the Fair Work Act, but we did learn that unions make extensive use of protected industrial action as a means of increasing pressure on employers during the period when they are negotiating an enterprise agreement. We also learned that many unions have no compunction in taking industrial action even where it is not permitted under the Fair Work Act. This action is frequently carried out simply to place pressure on contractors to agree to the terms of an enterprise bargaining agreement.

The Queensland Children's Hospital dispute in 2012 was triggered by six people on the site not being paid the rates set out in the EBA. The project lost almost $100,000 a day when the union decided to picket the site for many weeks. This totalled millions of dollars, at a cost not to the builder but to us, the taxpayers. Time is critical on building sites. The contractor typically faces a hard deadline and often must pay liquidated damages or lose the benefits of early completion if it is delayed in completing the job. The unions exploit this fact in their industrial action, knowing that, each day a site is shut down, the pressure to cave in to unrelated union demands is building on the contractor.

Union officials routinely state that their reason for entering a site is for safety. This is because legislation generally allows entrance on a site without notice if the union has a safety concern. It is no coincidence therefore that safety concerns are regularly cited as the reason to shut down a site. When a safety issue is raised, the unions will generally insist on the entire site being closed down, rather than just the isolated area that they are discussing.

The working group found that it is not unusual for someone wishing to trigger a site shutdown to fabricate a safety incident. There were even reports of tampering with electrical boards. Additionally, there will often be a clause in the EBA which gives union officials a very broad right of entry to a site, along with the power to stop work. These may be exercised on multiple vague and invented grounds, such as suspected safety issues or OH&S matters.

The committee heard evidence that coercion is now a common feature of union behaviour in the construction industry. This can involve threats and intimidation, verbal abuse and distribution of material making derogatory, belittling, untrue or defamatory statements about individuals or companies. It can be expressed face to face, on the internet and on brochures distributed at building sites and elsewhere. Union intimidation tactics also involve threats of physical harm and, on occasion, physical assault.

The CFMEU's treatment of my constituent is shamefully common across the industry, where non-CFMEU members are bullied and labelled as scabs. The CFMEU's actions were constantly in open defiance of the Fair Work Act and Supreme Court orders, yet with no strong enforcement body the unions continue to wreak havoc. Workers who wanted to get on with the work were threatened with throat-cutting gestures, threatened with having their heads stomped in and told they were 'dead' by union protestors at sites such as the Little Creatures brewery site in Geelong.

We learned through the investigations carried out by the working group that there is troubling evidence of increasing corruption and criminality in the construction industry. We also learned that it is now not uncommon for union officials to openly ask contractors and subcontractors for money. There have been repeated anecdotes that subcontractors will not be retained by head contractors unless they are on a union-approved list, which is what happened to my constituent.

The previous Labor government were aware of this unforgivable conduct, and their inaction makes them complicit. They were even informed by Justice Murray Wilcox of the benefit provided by the Australian Building and Construction Commission. He acknowledged that the ABCC's work was not yet complete and that it would be unfortunate if the ABCC's replacement body led to a reversal of the good progress that had been made in the industry. Yet the Labor government still buckled to union pressure. A reversal of previous progress is exactly what we have seen. Labor replaced the ABCC with a shadow of the commission called the Fair Work Building Industry Inspectorate. Its powers were severely limited, its budget was substantially cut and its staffing was reduced by about 30 per cent.

This bill restores the full power of the ABCC and the funding that Labor took away. It will bring back integrity to this industry. The operation of the ABCC contributed to improved productivity in the building sector. One study found that building and construction industry productivity was boosted by 9.4 per cent. In the 10 years to 2012, the ABCC's last year of operation, multifactor productivity in the construction industry increased by 16.8 per cent. 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. Industry trends since the ABCC ceased operating suggest that productivity performance in the building and construction sector is declining. Independent Economics, in a report prepared for the Master Builders Association, estimated that the removal of industry-specific regulation would ultimately result in a loss of 75 per cent of the productivity gains achieved during the Building Industry Taskforce and Australian Building and Construction Commission era.

Poor productivity and weak competition lead to costs for construction projects being higher than they should be. Customers are being overcharged. We the taxpayers are being overcharged. When the customer is a state or federal government, it is us, the taxpayers, who are ultimately being overcharged. Industry participants inform me that, on large construction sites, it costs about 30 per cent more to do the same piece of work as on an individual home building site. This is a powerful indicator of the excess cost built into the construction sector due to union militancy driving unnecessary expense.

The initiatives associated with the ABCC era resulted in productivity gains which produced an average lower construction cost of 3.4 per cent. Consumers also benefited from a 0.5 per cent reduction in the price of all dwellings. We found that, unequivocally, the ABCC needed to be brought back to ensure the rule of law and productivity on commercial building sites and construction projects, both onshore and offshore.

The Office of the Federal Safety Commissioner and the Building and Construction Work Health and Safety Accreditation Scheme are maintained in this bill. The bill includes a number of provisions modelled on the former Building and Construction Industry Improvement Act 2005 which provide building-industry-specific provisions, such as higher penalties for breaches of industrial law and associated provisions for proceedings relating to a contravention of a civil penalty provision, and protection against discrimination, coercion and undue pressure and rules from the Fair Work Act.

This bill, importantly, encourages productivity and the pursuit of high levels of employment in the building and construction industry. It will ensure that the government's policy to deliver the infrastructure of the 21st century is being delivered on time and on budget. The bill will create jobs and investment by ensuring that employers and workers in the industry can get on with the job without fear of intimidation.

There are also a number of changes in this bill from the original ABCC legislation. The definition of 'building work' in the bill includes offshore prefabrication of made-to-order components for parts of buildings, structures or works. The definition of 'building work' also includes the transporting or supply of goods to be used in building work. This is a change from the previous ABCC legislation and is included to ensure that large resource construction projects cannot be directly disrupted through coordinated go-slows on the supply of materials to those projects. Reforming the lawless culture of the building and construction industry requires strong regulation, a strong regulator and a level of penalties that will act as a deterrent to unlawful behaviour.

The bill contains appropriate and effective safeguards to ensure due process and transparency in the use of powers. The bill requires the Australian Building and Construction Commissioner to provide the Commonwealth Ombudsman with a report about the examination, along with a video recording and transcript of the examination. The bill includes measures to ensure public transparency and accountability and give the community confidence in the work of the ABCC.

Australia cannot afford to have a building and construction industry which is inefficient and unstable. I am proud to be on this side of the chamber and to be able to stand up for my constituents who are being bullied by unions, being denied jobs and workers by unions, and having the few jobs they do receive delayed and interrupted by union officials. Those in the construction industry are doing it tough. Today the coalition is standing up for the rights of workers to go to work each day without the fear of being harassed or intimidated or the subject of violence.

The former Labor government abolished the Australian Building and Construction Commission and saw a return to the days of lawlessness and unproductivity. The coalition is committed to standing up for business owners, like my constituents in Ryan, who are pleading for stability and reform in the industry. The rule of law must be applied fairly to this industry, and it is simply not fair or just to require the employers of Australia and their workers to comply with reasonable laws and not expect the construction unions to do the same. This is a significant step forward for the industry and for the principle that we are all equal before the law.

I commend this bill to the House. Australia cannot afford not to increase productivity, and with this bill we are doing something about improving standards in the workplace for all our workers.

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