Dave Sharma (NSW, Liberal Party) Share this | Hansard source

The Building and Construction Industry (Restoring Integrity and Reducing Building Costs) Bill 2024 (No. 2) sets out to do exactly what it says, which is restore integrity and reduce building costs in an industry which is incredibly important for Australia. The construction industry accounts for about 10 per cent of Australia's GDP, but we also rely upon it to build new hospitals, roads, airports, transport infrastructure, schools and homes.

We need to recognise that the construction industry is in great trouble right now. We've seen labour productivity in the industry fall by 18 per cent over the past decade. So, for a job that would have taken you 100 workers to complete in six months, say, in 2014, you now need 18 extra workers—more workers, less output. We've also seen some 3,010 construction businesses enter external administration in the year to 1 July 2024, which is up 30 per cent from a year earlier. In fact, construction businesses now account for one-quarter of the insolvencies that are taking place at a record level in Australia.

We also see that housing targets are not being met. The necessary increase in the supply of residential housing is not even close to being there. The National Housing Accord sets a target of 1.2 million new homes over the next five years. To take the New South Wales share as an example, that is 377,000, which means New South Wales needs to be building approximately 75,000 new homes per year. But there were only 43,000 new homes commenced in New South Wales in the year to March 2024. If you look back to the period of 2013 to 2018, New South Wales was building 67,000 new homes per year on average. It was pretty close to the target of 75,000, but right now it's languishing at 43,000 homes.

The other big problem, of course, is that inefficiency, low productivity and failures in the construction sector—business failures, insolvencies—are pushing up the costs of infrastructure, meaning major projects like the Western Sydney airport, new hospitals and schools and highway upgrades are costing much more than they should. This is because this is a sector which, since this government has come into office, has been characterised by a lack of competition and an abuse of market power. There has effectively been a monopolistic provider of labour to the construction sector, and that has been the CFMEU.

Unsurprisingly, when a single player enjoys market dominance, they tend to abuse their market power. We have no problems recognising this in other sectors. Whether it's in retail, with the supermarkets; in electricity and gas, with a couple of major players; or in banking and finance, with the four major banks, we recognise that when market power is concentrated the case for the abuse of market power is rife. We often either create a special regulator or give enhanced powers to the ACCC or other regulators to police those sectors. That is why the coalition government first established the ABCC, the Australian Building and Construction Commission: to tackle lawlessness, corruption, thuggery and intimidation in the sector which were caused by the dominance of a single player and a single union—the CFMEU—which exerted a stranglehold over providers and was able to use its market power to intimidate the purchasers of its services.

That body, the ABCC, had a 91 per cent success rate in prosecuting union misconduct and was also highly successful in curbing intimidation, thuggery and corruption in the sector. Unsurprisingly, the CFMEU, which saw its own powers trimmed by this body and saw it could no longer use its market power to get its own way and to dictate terms, lobbied for the abolition of the ABCC. That's why the Albanese government—which has taken $6.2 million in CFMEU donations since Anthony Albanese became the opposition leader, in 2019—abolished the ABCC as one of its first acts in office. This was a quid pro quo. The CFMEU made quite clear that their continued support for Labor, not only at the 2022 election but with their continued donations, was contingent upon their interests being looked after, and that's what has happened.

Wind the clock forward two years, and, as a result of the media expose that was too large and too significant to ignore—and full credit to the Nine media group for exposing intimidation, corruption and thuggery in the building sector, as they did—Labor has been forced into appointing an administrator into the CFMEU. The administrator has said that corruption was worse than expected, more entrenched, and that the problems are going to take longer to fix. Why is this such a problem? Some of the biggest buyers of construction services are Labor state and federal governments, and they've been handing over millions of dollars of taxpayer money in inflated costs to the CFMEU, leading to big cost blowouts, which we have all heard about, on infrastructure projects. But we've also seen, in the private sector, the CFMEU effectively allowed to exercise a veto so that big private civil construction companies do not get to decide who they employ; the union does—the CFMEU gets to do that.

The result of this for residential building is that workers are fleeing to the union dominated projects, where wages are higher because the CFMEU demands as much from the Labor government, and we're seeing smaller construction players in the residential sector, by and large, go to the wall, as well as worker shortages. As a result, residential construction, particularly for detached residential dwellings, is almost flat. It's largely unviable commercially, at least in New South Wales, to build detached dwellings, simply because the costs are too high and the labour is too scarce.

The problem with the government's approach of appointing a CFMEU administrator is it's not going to fix the problem. If you talk to anyone in the private sector, they are still intimidated. They fully expect that, once this period of administration is over, the CFMEU is going to return stronger than ever, more bent on revenge than ever, more likely to abuse its market power than ever. And, indeed, they are telling the private sector that explicitly and implicitly. No-one in the private sector is prepared to look at renegotiating enterprise bargaining agreements or look at touching any of the special privileges the CFMEU enjoy on their sites or touching the veto they exercise over their choice of subcontractors. They are concerned that in a year or two the CFMEU will be back, and, if they haven't played ball in the meantime, the CFMEU will extract their revenge.

The Hawke government was brave enough to take on the BLF because of the problems it was causing the construction sector. The Howard government was brave enough to take on the Maritime Union of Australia in the late 1990s and early 2000s because of the stranglehold that union militancy was exacting on our waterfront. Given the importance of the construction sector to the national economy and given the fact we all pay a tax, either directly through our taxes or indirectly as purchasers of these services, any Australian who buys a home, who seeks to do a renovation or who wants to construct a granny flat is paying the inflated costs that are the result of union militancy running rampant in the construction sector and all the flow-on effects.

We all have an interest in fixing this issue, and that is why this bill is the only genuine solution to the continued abuse, corruption, intimidation and misuse of market power in the construction sector. That is why I support this bill.

(Q uorum formed)