Luke Simpkins (Cowan, Liberal Party) Share this | Hansard source

Clearly, this bill has caused concern in the union movement and for the union movement's political arm, the Labor Party. That is not surprising, because it promises to bring back to the building and construction industry two concepts that unions like the CFMEU do not like one bit, and they are productivity and accountability. They hate such terms because they are effectively the opposite of the objectives of the unions in the construction industry. On 7 September, the Australian people went to the polling booths in full knowledge that the re-establishment of the Australian Building and Construction Commission was part of the policies of a coalition government. It was not being hidden; it was right out there. And now it is happening. This is of course not about Work Choices; this is about productivity and accountability on the building sites of Australia.

There is no greater example of the need for this bill and the reintroduction of the ABCC than the CFMEU's illegal action against construction company Grocon in Melbourne in 2012. If anyone were to say the ABCC and these powers were not now required I would direct them to recent history. Having had the chance to do the right thing, and comply with the law, the CFMEU chose to be militant and contemptuous of the law. In their dispute in Victoria the CFMEU now face the potential of multimillion-dollar fines and legal costs for contempt of court. Grocon has asked the court to impose a $1.5 million fine plus another $400,000 in legal costs after the CFMEU did plead guilty to a third round of contempt charges. Collectively the penalties could amount to more than $7 million because the court has been asked to impose fines of $5 million for other contempt charges resulting from the reckless and illegal blockades that brought Melbourne to a standstill. That recklessness was not only reckless and arrogant in its disregard for the law and court orders but also because the penalties of $7 million will come not out of the pockets of the union's leaders, who somehow thought themselves above the law, but from the members' dues—it is their money.

This is where this country has found itself. A militant union operating beyond the law, determined to destroy productivity, demonstrates exactly why the ABCC needs to be restored. The Labor Party cannot control the CFMEU but that union, drunk with its own sense of importance and power, stood defiantly against the rule of law. Yes, it is true the CFMEU could not be controlled by their political wing, but it is in fact the other way around: from the speakers list, clearly the CFMEU control the Labor Party, no doubt offering the stick and carrot to those opposite—threatening preselections and campaign contributions if the union's servants do not do as the union says.

The CFMEU is of course a repeat offender—and, when judgment is passed upon them, the costs will probably reflect their history of disregard for the law and the national interest of productivity. In Perth the same sort of disregard for getting on with the job was well known. For many years the CFMEU was led by Kevin Reynolds. Apart from getting his wife installed in state parliament as a Labor MLC, there were many deals done across building sites in Perth. A most interesting deal was where Reynolds acquired a luxury apartment in the Raffles Tower in expensive Applecross. The apartment overlooks the Canning River, and I think that the full cost of such an apartment would exceed the means of all but the most highly paid—or perhaps the well-connected, in this case.

In 2007 the Weekend Australian reported that the CFMEU in WA was greatly looking forward to a Rudd victory. The Weekend Australian found that figures showed an extraordinary halt to the union's rogue strikes—including 'blue flu', where hundreds of workers called in sick at once—after the ABCC used its powers to hit unionists with individual writs that could result in fines of up to $28,600 each.

It was a testament to the success of the ABCC that in Western Australia days lost to industrial action in the construction industry fell from 71 days per 1,000 workers in the December quarter of 2004 to just nine in the same quarter of late 2006. In fact, across 2006 there had been 45.2 days lost per 1,000 workers compared with 725 days in 2005.

In 2003 the Cole royal commission found lawlessness widespread in the construction industry. The commission heard that 10 Western Australian construction companies had handed over a combined total of $397,935.48 to the CFMEU in Western Australia for 'casual' union tickets for non-union workers. The commission also found widespread disregard for right-of-entry rules on building sites.

Perhaps in the case of WA and Victoria, the siphoning off of funds generated through 'peace accords'—some may call it blackmailing—of some builders has allowed massive war chests to be accumulated. These funds serve to inoculate the CFMEU against compliance with the law. In the case of Victoria's CFMEU it has been suggested that some $50-plus million has been accumulated in union coffers.

The question now becomes: what does this bill mean for Australians? The ABCC is to be re-established, armed with the powers it previously held to compel the attendance and production of documents. It is also good to see that new limits are imposed on unlawful industrial action and unlawful picketing, backed up by tougher penalties. There is no doubt that the need to restore these arrangements comes because of the absolute need to address what happened with a number of high-profile disputes in the construction industry, most prominently the Grocon event. It is little wonder that the ABCC needs to be brought back given the contempt the CFMEU showed for the courts in that issue.

The bill includes expansions of prohibitions on coercion and discrimination, with reverse-onus provisions to make it easier to prove breaches. A new Building Code will be issued, imposing further obligations on building industry contractors and other participants in the industry as conditions of obtaining work on Commonwealth funded projects.

Being from Western Australia I am also keen on new provisions, not present under the previous ABCC legislation, such as the expanded definition of 'building work' to include the transportation or supply of goods to building sites, including offshore resources platforms. This change will ensure that large resource construction projects, onshore and offshore, cannot be indirectly disrupted through coordinated go-slows on the supply of materials to those projects.

Of course, we are not talking about low pay or conditions at all. The CFMEU WA pattern-bargaining sees tradesmen getting about $140,000 per year, a labourer about $120,000 per year; four weeks leave a year and an additional 10 days of personal leave as well. Furthermore, there are 26 paid rostered days off per year. The working week is a 36-hour week but when overtime kicks in it is paid at double-time, because the usual site hours are around 50 hours a week. There is also very generous income protection that sees employers paying well in excess of $100,000 per year in policy premiums. Beyond their eight weeks paid leave a year, a great imposition on employers is the union training levy of $27 per week per EBA employee. From all reports there is very little training but significant collection of money, with one subcontractor having paid $70,000 in the last 12 months.

I understand that the construction sector has been willing to pay premium wages and conditions in the past, so long as productivity was delivered, but the CFMEU has failed to deliver for many years. Those commercial builders who sign the union EBA suffer a major cost disadvantage compared with those who do not. I emphasise that base wage rates are similar between the union and non-union sectors, but the excessive union allowances, 26 RDOs and insurances are a major difference between the two sectors. Productivity is also higher in the non-union sector.

The industry works on the general rule of thumb that labour costs represent around 50 per cent of total construction for a commercial project, so high labour costs are a major consideration for clients, including the public sector and the private sector. Rents therefore will reflect the costs of construction, and uncompetitive and unproductive union sites will result in higher costs for consumers. Extra costs in WA also include the union-imposed requirement for non-working job stewards on about $150,000 per year, for subcontractors to have safety officers that are paid in excess of $100,000 per year, and for the engagement of union EBA subcontractors only. It therefore revolves around making builders pay for the nepotism and jobs for the mates—or, more accurately, paid positions for the mates of union bosses. All these extra costs, these uncompetitive and unproductive practices, are being supported and applauded by those opposite. This is not the old mantra of a fair day's pay for a fair day's work; rather, this is about fleecing builders and therefore consumers without regard.

The bill provides for the establishment of the ABCC, headed by the commissioner. The commissioner's functions include monitoring and promoting appropriate standards of conduct by participants; investigating suspected contraventions of relevant building laws; instituting or intervening in legal processes; and providing assistance, advice and representation to building industry participants where appropriate. The commission will also have inspectors who can enter premises where they believe breaches of building laws are occurring or likely to occur, or where there are records or documents relevant to compliance purposes on the premises. While on the premises, the inspectors can inspect work, conduct interviews and require the production of records. The bill also restores the 'coercive powers' formerly held by the ABCC. These powers are designed to be 'a key tool for breaking down the historical and unacceptable culture of silence' in the construction sector. The ABCC's exercise of these coercive powers will be overseen by the Commonwealth Ombudsman.

Chapter 5 of the bill contains prohibitions on organising or engaging in 'unlawful industrial action' and 'unlawful picketing'. To be covered by the bill, these prohibited forms of action must be taken by, or in a way that affects, a 'constitutionally covered entity'—that is, a corporation, the Commonwealth, a Commonwealth authority, a body incorporated in the ACT or the Northern Territory, or a federally registered union or employer organisation. An unlawful picket is action that has the purpose of preventing or restricting a person from accessing or leaving a building site or ancillary site; that directly prevents or restricts a person from accessing or leaving a building site or an ancillary site; or that would reasonably be expected to intimidate a person accessing or leaving a building site or an ancillary site.

The penalties for unlawful industrial action are increased under the bill to $34,000 for individuals and $170,000 for corporate entities. The same penalties apply for unlawful picketing. The government states that these increased penalties are needed to 'act as a deterrent to unlawful behaviour' and 'blatant disregard for court orders'. With the exception of protected industrial action, it is also unlawful to take action to coerce another person to agree or not agree to make, vary or terminate a building enterprise agreement.

In conclusion, I would like to further reinforce the need for this bill to pass. I have talked about the high-profile incidents that make this bill and the re-establishment of the ABCC critical for a return to productivity and competitiveness that the CFMEU is the enemy of. However, to further make this point, I would like to also speak about something of an icon for shoppers in Perth. I speak of the direct factory outlet and discount centre known as Harbour Town. In the construction of Harbour Town some 10 years ago, it was well known in the industry that anyone bringing equipment or furnishings on to the site had to pay to get in. There were particular costs for each item. Apparently, to be allowed by the CFMEU to bring carpet on site was worth a carton of full-strength beer, to be handed in at the gate. And this was not the 1970s; it was not long ago.

To quote a 2009 Federal Court decision against the CFMEU, Justice Gilmour said:

It is of particular concern that the CFMEU, Mr McDonald and Mr Buchan have, as I have found on a prima facie basis, hidden behind spurious concerns as to the health and safety of employees to advance, as I infer, their own unspecified industrial aims. It is the very behaviour which the Commonwealth Parliament has made clear should be eradicated from the building industry in this country. It is conduct that directly undermines the main object of the BCII Act (s 3(1)) which is to provide an improved workplace relations framework for building work to ensure that building work is carried out fairly, efficiently and productively for the benefit of all building industry participants and for the benefit of the Australian economy as a whole.

The point is that unions such as the CFMEU have been and are responsible for massively increased costs, inefficiencies and the reduction of productivity. Like so many organisations, they have a reckless disregard for the need for businesses to be competitive and efficient. They see any project as a chance to fill the coffers for the union leadership and they just do not get that they are driving businesses overseas through excessive costs.

The ABCC needs to be returned with all these powers to help return accountability, efficiency and productivity to the industry. The CFMEU and construction unions had the chance to be part of the Australian team under their political arm but instead they chose to fleece builders and undermine the economy. Rather than let them carry on, the time to act is now. It is time to restore the ABCC and get the construction industry back to a lawful and effective industry in this country. Whether it is the CFMEU or their Labor Party, those on the other side of politics find that eventually you run out of other people's money to spend. The well is not bottomless, and Australians expect this reckless waste and self-interest to stop. I therefore commend this bill to the House.

See this speech in context