Michaelia Cash (WA, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Hansard source

I rise to speak on this motion that has been moved by both Senator McKenzie and myself. It's very simple motion. One might even say it should be a non-controversial motion, when you look at what we are asking the Senate to do, and that is to establish a Senate inquiry by the Rural and Regional Affairs and Transport References Committee into—wait for it!—the nature, extent and impacts of misconduct in procurement processes involving publicly funded infrastructure and housing projects.

Now, as I said, one would think this was a very simple motion. Who in this place, whether you're a member of the government, a member of the crossbench or a member of the Australian Greens, would actually vote no to such a motion? There is currently a cost-of-living crisis in Australia and Australians are doing it tough, yet what do we know? What we know is this: the cost of publicly funded infrastructure in this country, including roads, including hospitals, including the flow-on effect on housing, and including schools, is around 30 per cent higher because of the actions of the CFMEU. And it's not just the actions of the CFMEU. Quite frankly, it is the actions of those big companies who do deals with the CFMEU, knowing full well that the deals they are doing are driving up costs and delaying projects. These deals are enabled by large construction companies that allow these practices to persist. Why? Because, as we know—this has been proven time and time again—these firms benefit from inflated costs and productivity delays. All the while, mum-and-dad Australians are the people who ultimately suffer the consequences and pay the price.

As I said, given the nature of the inquiry, which basically is to work out why publicly funded infrastructure in this country is costing the Australian taxpayer more and not being delivered on time—why it's potentially not being delivered at all—I would have thought it would go through with a resounding 'yes' from all members of the Australian Senate. But, as we know at this point in time, whilst the motion we are putting up is endorsed by the Australian public, who I would have thought are saying, 'Hey, if I am actually paying more for my public infrastructure I would like to know why,' the fact of the matter is that his motion for a Senate inquiry is not likely to get up, because of the vested interests in this place. And we'll talk about those vested interests shortly.

The position of the coalition—the Liberal and National parties—is very clear. Our proposal to establish this inquiry comes at a critical time. Again, I would have thought that our public spend on infrastructure—on housing, in particular, given the inability of Australians currently to get into housing—must deliver value for money.

If I was a member of the public I would be demanding from government that they spend my money appropriately.

Yet what does the body of evidence, now formulated over many years, show? It shows that public infrastructure projects are often delayed and that they run over budget. But we also know—and, again, there's been royal commission after royal commission into this—that they are subject to corrupt practices that inflate costs and cripple productivity. So true is this that it has become a cliche of any government project. It is almost now accepted that a government project, in particular where the CFMEU is involved, is one that will be delayed, will run over budget and will be subject to corrupt practices that inflate costs and cripple productivity. What a sad state of affairs, that we now live in a country where it is extremely rare for a public infrastructure project to be completed on budget and on time.

That's why Senator McKenzie and I are putting forward this inquiry. All we want to do is ensure that Australian taxpayers—it's their money; publicly funded infrastructure equals Australian taxpayers; they're the ones paying for it—are getting the best value for every dollar spent on these public infrastructure and housing projects. It is a fact—as I said, it's been established many times—that the impacts of misconduct in the building and construction sector have a flow-on impact to the cost Australians pay for their roads, their schools and their public infrastructure, including hospitals and housing. Bullying, coercion and other intimidation tactics on building sites, particularly those controlled by the CFMEU, are driving up costs and delaying the delivery of essential infrastructure and housing. It's not a hypothetical issue. As we know, it is a real and present problem affecting every Australian who relies on the timely and cost-effective completion of public projects.

I would have thought that this inquiry provides an opportunity for all stakeholders—those who want to come along and say, 'By the way, no, no, no, we're actually doing okay in Australia', or those involved in the delivery of infrastructure and housing—to come along and justify their position or, alternatively, share their horror stories. And I know it's the 'alternatively' that Mr Albanese and his government are worried about. The alternative is that they come along and share their stories of the bullying, the intimidation, the coercion and the abuse. But also they might be able to share with us what they think are the potential solutions. The CFMEU probably aren't going to like those potential solutions.

So the construction industry, business owners, subcontractors and of course employees all have a story to tell. Again, all this inquiry will do is ensure that their voices are heard. But, as I said, the inquiry is not going to be limited to just the disgraceful actions of the CFMEU. This inquiry will shine a light on the entire process, from the moment a project begins until the moment it ends. The behaviours we have seen year in year out from the CFMEU—and, as I said, the body of evidence is in; it's been in for several years now—are driving up costs and delaying projects. But this is the key point here: they are enabled by large construction companies that allow these practices to persist.

I've stood in this place and said that before, back in 2016, and, guess what? The Australian Labor Party were in opposition. They fought us every single step of the way to try and curb these practices.

It is a fact that these large construction companies benefit, as I said, from inflated costs and productivity delays, and the only people who end up suffering are the Australian people. They suffer the consequences. Last month, Minister Watt denied that the CFMEU's behaviour has an impact on construction costs. I would have thought that if that were the case he would have welcomed the inquiry so he could prove those on the coalition side to be wrong. This is what Minister Watt said: 'I've had a bit of a look at this, Patricia, and I cannot find any evidence whatsoever to support that.' Really? Seriously? So many sayings are going through my mind—ostrich with its head in the sand or living under a rock. Go and talk to any of the smaller builders, any of the subbies. Go and talk to Australians who are having their infrastructure projects delayed. They will tell you Minister Watt has a blatant denial of reality, but Minister Watt's comments also show and tell you all you need to know about Labor's unwillingness to confront the truth.

The body of evidence is in. The evidence shows that CFMEU construction projects cost the Australian taxpayer around 30 per cent more than they should. In Queensland, where Labor's cosy relationship with the CFMEU is particularly evident, the cost of building apartments on CFMEU controlled sites—that's right, apartments which people want to get into—is 33 per cent higher than on non-union sites. A 2024 economic analysis by the Queensland Economic Advocacy Solutions found that CFMEU controlled apartment buildings take 50 per cent longer to build. Seriously, you could not script this if you tried. The cost of a two-bedroom apartment, for example, can be inflated by an extra $287,199, pushing the total build cost from $869,687 to $1,156,886. This is not just an isolated finding. A report from Ernst & Young estimated that Labor's abolition of the Australian Building and Construction Commission would lead to an additional $34.5 billion decline in construction output by 2030, with a $47.5 billion reduction in economic activity as higher costs and lower activity act as a handbrake on the rest of the economy.

Statistics from the Australian Securities and Investment Commission show that from the past financial year to 16 June—wow!—there were 2,832 construction industry insolvencies. That is up by 28 per cent from the 2023 financial year, when there were 2,013 construction insolvencies. There were 1,200 construction insolvencies in the 2022 financial year, the last year—lo and behold!—the Australian Building and Construction Commission was in operation. This is the economy that Mr Albanese and his government preside over. These are the consequences, laid bare, of their destructive industrial relations changes.

The CFMEU's conduct has far-reaching implications, and it's not just affecting large infrastructure projects. Australian home buyers and taxpayers are the ones who are ultimately paying the price for the CFMEU's bullying, their thuggery, their intimidation and their coercion. The chief executive of the Recruitment, Consulting and Staffing Association told the ABC in July that the CFMEU has created a serious increase in costs through a lack of competition. Quantity surveyors from Rider Levett Bucknall found that the CFMEU's wage deal in New South Wales would increase labour costs by up to 19 per cent in its first year alone. Similarly, Queensland builders and developers report that productivity on CFMEU controlled projects averages three days a week due to a sweetheart deal between Queensland Labor and the union. Seriously?

The federal budget in May revealed just how much this is now costing Australians.

The Albanese government paid out an extra $10.1 billion to cover cost blowouts on state and territory infrastructure projects. Of this, $5 billion went to Victorian Labor, and not a single extra kilometre of road was built with that money. Yet as we stand here today, those on the other side, the Albanese Labor Government, sit there rolling their eyes. They remain absolutely unwilling to take serious action. All this inquiry will do is allow us to dig deeper into the role that tier 1 construction firms play in fostering a culture of collusion, intimidation and corruption. All this will do is establish that Australians are paying too much for their public infrastructure, and it may actually put some solutions on the table. But let's wait and see.

I also move the amended motion standing in my name:

That the motion be amended as follows:

To move— That the following matter be referred to the Rural and Regional Affairs and Transport References Committee for inquiry and report by 28 November 2024:

The nature, extent and impacts of misconduct in procurement processes involving publicly funded infrastructure and housing projects and programs in Australia, with particular reference to:

(a) the adequacy of the Commonwealth regulatory framework in preventing and addressing corruption, bullying, standover and other intimidatory tactics in the building and construction industry;

(b) the adequacy of Commonwealth procurement contracts in ensuring the security of payments to small and medium subcontractors and opportunities to strengthen these arrangements;

(c) any practices or arrangements that discriminate, or have the effect of discriminating, against certain persons, classes of employees or subcontractors;

(d) connections between the Construction, Forestry and Maritime Employees Union, declining productivity and the escalating costs of infrastructure in Australia, including housing;

(e) the impact of misconduct on construction businesses, suppliers and skills shortages;

(f) the causes and effect of cost and delivery pressures on the Australian Government's infrastructure investment program;

(g) Commonwealth oversight of state and territory procurement and contracting arrangements for infrastructure projects with a federal contribution;

(h) examples of best practice infrastructure procurement processes around the world;

(i) improving the involvement of Indigenous businesses, small and medium business suppliers, subcontractors and independent contractors on infrastructure projects;

(j) the need for anti-racketeering laws in Australia; and

(k) any related matters.