Christopher Back (WA, Liberal Party) Share this | Hansard source

I rise to contribute to this debate on the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill 2009 and to state what is obvious to everyone, with the possible exception of this Labor government. If ever there was legislation which should be defeated, it is this legislation; and if ever there was a time when the ABCC should remain firmly in place on the Australian industrial scene, it is now. Only this week have we seen the Treasurer, Mr Swan, make the astounding statement that Australians need to increase our productivity in the workplace, as if he suddenly discovered this fact. Already, Labor’s new so-called fair work legislation is failing miserably to deliver on this demand of the Treasurer, and any attempt to water down the ABCC will only serve further to decrease productivity.

Why was it necessary in the first place, contrary to what we have just heard from my learned colleague Senator Siewert, for the Building and Construction Industry Improvement Act to come into existence? As we all know, it had its origins under the last government, the Howard coalition government, as a result of thuggery, poor productivity, corruption and everything that went with it in the building industry. It was this that led to the Cole commission of inquiry in 2003, and it was from that inquiry that the BCII Act came into existence. What led to that inquiry was the widespread sabotage of industry productivity through strikes, intimidation, illegal payments, violence threats, failure to honour binding agreements, contempt for the commission and court rulings, regrettably in my state of Western Australia, where it was made into an art form, and also principally in Victoria.

Clearly what was needed then, and is needed now even further, was structural and cultural change. That has been delivered to the benefit of everybody: workers, employers, investors in the building and construction industry, and the wider community. In Western Australia, following new Labor legislation, it is already evident from a series of industrial events that that culture returned in spades late last year and in the last few days.

The Howard government inherited a problem and it devised a solution which has stood us in good stead. We all know that the outcome of that solution was a spectacular success for all concerned including, of course, for the workforce, but with the exception of the militant unions and the potential union donations to this Labor government. By contrast, we have seen the Rudd government inherit that solution and now set about dismantling it. We are heading inevitably back to the problem—and at what speed, as we have seen only in the last few days.

Let us examine the indicators of industrial action over time, and remember that the ABCC came into existence in 2005. In 2004 there were 550,000 working days lost in that industry. In 2005 it halved, to 243,000. By 2006, it was 188,000. By 2007, it was down to 88,000. Then we saw this government come into existence in 2007. By 2008 it had increased to 165,000. In Victoria, one building company alone in 2003 saw 20,000 hours lost in productivity from strikes in that company. In the next year, 2004, 26,500 hours were lost. In 2007, zero hours were lost. For the first two months of 2008, the figure was 1,840. The writing is on the wall. The figures are there for everyone to see.

Failure to retain a tough regulator with strong investigative powers sees a return to the non-productive and undesirable behaviour which was the necessary beginnings of the royal commission in the first place. What would be the effect on the Australian economy if the ABCC is neutered and the amendments to the legislation go through? Let me give you an indication of history, because the best predictor of future behaviour, as we all know, is past behaviour.

What did we see as a result of that legislation coming into place in 2004 and being implemented in 2005? A 7.3 per cent productivity gain in commercial building compared to residential building since 2004—there is that word ‘productivity’, Treasurer, Mr Swan—a 10 per cent addition to labour productivity in the construction industry as a direct result, 10.5 per cent increased performance in the construction industry labour productivity compared to predictions that were made in 2002 and, most importantly, an increase in average weekly earnings per worker in that sector between 2004 and 2007 of 25.5 per cent compared to 15 per cent in all industries. The workforce enjoyed a 10 per cent increase in income over all industries.

In the 2008 report the ABCC’s role in improved productivity was estimated to yield: a 1.5 per cent increase in Australia’s GDP, a 1.2 per cent reduction in the CPI, the price of dwellings driven down by 2.5 per cent, and a gain of $5.1 billion for the economy. Why would anybody be contemplating a change in that circumstance? Costly strikes on industrial action had all but disappeared. Projects were being completed on time and on budget. Once again we were enjoying our international reputation, to which I will return. Importantly again, aggregate earnings by workers increased during that period by $18 million per annum. Of course, we ended up with a far more harmonious industrial relations environment, and we have the Treasurer calling for increased productivity.

Why would the government want to dismantle or to neutralise the ABCC? There are three reasons: first of all, payback for the unions—GST or ‘get square time’, as we were told by Kevin Reynolds and Joe McDonald in 2007-08—secondly, to weaken the highly effective penalty process; and, thirdly, to emasculate the investigative service, to which I will respond.

The amendment bill proposes a switching-off clause under the new investigative powers of the commission. That means that, if an individual union does not misbehave for a certain time, it will no longer be subject to investigation by the investigators. What is the point of having that sort of legislation in place? If it is to prevent unlawful industrial action, why is there the capacity to switch it off? There is no precedent in Westminster law for the switching off of that provision. Is the government contemplating it for the ATO, for ASIC or for the ACCC? Of course, it is not. Why would it be creating a precedent by introducing a switching-off clause in this legislation?

As we can all see, all of these changes, as pointed out earlier by my colleague Senator Abetz, are simply the Rudd Labor government paying the piper. We know, therefore, who has been calling the tune. Regrettably, this government is inextricably linked to the trade union movement and it has a vested interest in seeing once again an increase in union membership. The union movement provided some 25 per cent of the funds of the ALP in the financial year 2007-08, and they will be looking once again for a return on that investment.

What have we seen in Western Australia in the last couple of months? People tend to forget that this state is the economic powerhouse of the nation. We have seen this month a return to union thuggery in the maritime industry. Companies have been forced to pay increased incomes of up to $50,000 per year with no increase—I stress ‘no increase’, Mr Swan—in productivity. On the Woodside Pluto project we saw before we rose at the end of last year workers going on strike, and they have resumed that strike—this time with the intervention of the CFMEU. People on salaries far higher than we in the Senate enjoy are demanding that their accommodation be left vacant when they are not working. Imagine the scenario where any one of us here in Canberra say to the hotel management as we leave to go back to our own state, ‘Don’t rent out my room because I need it on my return.’

I want to refer to and quote former Labor finance minister and Western Australian senator Peter Walsh. Mr Walsh believes that the $50,000 pay rise without productivity trade-offs won by offshore oil and gas workers could lead to a repeat of the 1974 wages outbreak. Mr Walsh, a finance minister in the Hawke government, said that the agreement could lead to a wages outbreak similar to that experienced in the last years of the Whitlam government. He stated:

I think it’s potentially very dangerous, leading to a more general wages breakout like 1974-75.

If they get away with a wage increase of that size with no offsets, it is potentially dangerous.

You do not need our side of the chamber to be telling people what will inevitably happen in this scenario. We in the west watched with concern last week as we saw the MUA and others undertake this bullying activity. We looked to see what the minister, who has this fresh new legislation in place, would do. I heard her to say that she believed it was the legislation working at its best. If the minister thinks that workers getting a $50,000 a year increase, staggered in over a three-year period, is legislation working at its best, one can only despair about what will happen in the industrial scene in our state and across the nation. If ever there were a time that the ABCC should continue in its present form it is now.

I would like to draw attention to some of the comments made by the previous speaker, Senator Siewert. I refer now to the occupational health and safety fears of the union movement when the ABCC came into place. There was an assertion naturally that we would see an increase in occupational injuries et cetera. It is a well-stated fact that no unlawful act has ever led to increased safety on a workplace. There are many mechanisms which employers and employees can use. I can assure you as an employer of some 30 years experience that a harmonious workplace—where there are good relations between employers and employees—is the way to increase occupational safety and wellbeing, and it is to the benefit obviously of all parties.

Let me quote some of the statistics and put them on the record. These are stats from Safe Work Australia, from only August of last year. They show that not only has there been no increase in injuries in the building and construction industry since the ABCC’s inception; they have in fact gone down. Per 1,000 workers, in 2003-04 there were 27.7 incidents of injury to construction workers. That went down in 2004-05 to 26. It went down further in 2005-06 to 24. It reduced again in 2006-07 to 22. In 2007-08, the last year for which I have statistics, it was 21. That debunks the theory that the introduction of the ABCC would increase unsafe practices in workplaces. It has not. Neither should it and neither would it.

I will speak, if I may, on the concept of industrial harmony. I made the observation earlier that, as an employer of some 30 years experience, in two states of Australia, I know that we must have a harmonious workplace to get productivity gains and to reduce any sort of industrial accident. I have always taken the view that any accident in a workplace is preventable. It should always be the case that employers and employees, management and workers, sit down together to ensure that practices are such that accidents will be minimised.

It was only in November of last year that Westpac produced very, very interesting figures relating to the preceding 12 months, when there was obviously a downturn in employment. Their figures indicated that in the Australian workplace, and in industry in particular, there had been a decrease of only 0.1 per cent in employment whilst there had been a decline of some 2.3 per cent in hours worked. What this indicates is that employers were doing their best to keep employees in the workplace, and because of good bargaining, good relations and industrial harmony they were able to negotiate for people to work fewer hours. That is exactly what we should be looking for in Australia. Nobody wants to put competent workers off, particularly at a time when—as in our state and, I hope, the rest of the nation—we are starting to see an increase in demand.

Speaking again of industrial harmony, I note that surveys undertaken by the Australian Constructors Association four years after the introduction of the building and construction industry improvement legislation indicate that three-quarters, 75 per cent, of employees had a positive reaction to the changes in that industry, 15 per cent indicated no change and only 10 per cent—one in 10—indicated that the changes had been negative. I cannot see why we need to modify or water down this legislation. It has never been my experience that industrial ill will in a workplace has done anything for employers, workers or the bottom line. I can point to innumerable instances in industries with which I have been associated where the reverse is true and where good negotiation, liaison and confidence in a workforce have led to immeasurable gains for everybody.

I conclude with the concept of encouraging overseas investment in Australian industry. The industry in which I was engaged prior to coming into the Senate was the oil and gas industry. It is of enormous importance to our productivity and our long-term commercial wellbeing that we are judged internationally to be responsible in our industrial relations. One need only look at when there was industrial turmoil in the Pilbara. Our overseas trading partners had enormous concerns. I refer also to the lamentable situation in the construction industry in Melbourne when the Japanese company Saizeriya walked away from its intention to invest in that industry. That resulted in the loss of tens of millions of dollars and up to 3,000 jobs.

I know from my own contacts in the oil and gas industry offshore that at this very moment they are watching with increasing concern what is happening in the Maritime Union situation in Western Australia and of course the situation in the Pilbara. These are the people who are shipowners. These are the people who may or may not allow the use of their vessels in our waters. I hope the Minister for Immigration and Citizenship is listening, because they are also the people who may or may not bid on contracts involving our oil and gas industry in our waters. I can tell you from personal experience of the last few days that they are increasingly saying, ‘We are not interested,’—