James McGrath (Queensland, Liberal National Party) Share this | Link to this | Hansard source

It is a pleasure to be able to continue my remarks in relation to the Building and Construction Industry (Improving Productivity) Bill 2013 and related bill. I believe there is a pressing need to fix the current legislation: to re-establish the ABCC so as to re-establish meaningful penalties that can actually deter people considering compliance with the law as optional and stop them from repeatedly breaking the law as it suits them; to re-establish an effective building code to ensure contractors that want to do taxpayer funded work strictly meet all of their legal obligations, including laws dealing with worker entitlements, workplace safety and migration laws; to ensure antiquated practices that only add cost and delay are avoided on taxpayer funded projects; and to remove the absurd restriction on the regulator's ability to enforce the law in the public interest where parties reach a private settlement in their own commercial interests. This is a Labor and Greens imposed restriction that does not apply to any other Commonwealth regulator.

The building and construction industry is very important for the Australian economy not only because of the number of people it employs and the number of families it supports but also because it represents approximately eight per cent of GDP, which is similar to the contribution made by the mining industry. The building and construction industry can be an important source of sustainable, high-paying jobs. That is why it is so important to ensure the rule of law is respected by those in the construction industry, and that thuggery, intimidation and coercion are effectively dealt with. When projects are delivered on time and on budget, there is more money for more projects and that benefits the construction industry with not only more work and jobs but it also, more importantly, provides a better return for the Australian economy and the Australian consumer. The taxpayer and the consumer ultimately pay for construction delays and budget blow-outs.

The bill to establish the Australian Building and Construction Commission will re-establish a genuinely strong watchdog to maintain the rule of law and to protect workers and constructors. A re-established Australian Building and Construction Commission will improve productivity on building sites and construction projects, whether on shore or offshore. The re-establishment of the Australian Building and Construction Commission will bring to the industry confidence that the rule of law will be applied. This will encourage further investment and provide more jobs and greater prosperity for workers and the economy. The bill will prohibit unlawful industrial action, unlawful picketing and coercion and discrimination.

Labor experimented with a weaker regulator when it abolished the Australian Building and Construction Commission, strung one hand behind the regulator's back, slashed the regulator's budget by a third, reduced its staff complement by a third, and, alarmingly, reduced the applicable penalties for wrongdoing by two thirds.

A key feature of the government's legislation to re-establish the Australian Building and Construction Commission will see a return of penalties for unlawful conduct that are high enough to actually deter people who repeatedly break the law to suit their industrial agendas. For many years, it has unfortunately been only too clear that the commercial building and construction sector provides the worst examples of industrial unlawfulness. In 2003 the Cole royal commission examined the construction industry and noted that it is characterised by unlawful conduct, and concluded:

These findings demonstrate an industry which departs from the standards of commercial and industrial conduct exhibited in the rest of the Australian economy. They mark the industry as singular.

And:

… the rule of law has little or no currency in the building and construction industry in Western Australia … The ... industry ... is marred by unlawful and inappropriate conduct. Fear, intimidation and coercion are commonplace. Contractors, subcontractors and workers face this culture continuously.

The royal commission findings lifted the veil on what everyone in the industry had known for years. Previous governments had been unwilling or too intimidated to tackle it. The Howard government was prepared to step in and make the tough decisions required to clean up the sector. The establishment of the Australian Building and Construction Commission in 2005 provided a genuinely strong watchdog and dissolved the 1970s-style practices that plagued the industry. It was a strong, specialist regulator that enforced the rule of law applying to the building and construction sector. Even Labor reluctantly acknowledged the need for a regulator and retained the Australian Building and Construction Commission, with its coercive powers, for its first term of government. It then, regrettably, abolished the ABCC and replaced it with a weak imitation with a slashed budget.

The establishment of the Australian Building and Construction Commission saw a decrease in lawlessness. Site managers reported that for the first time in years they could focus on building rather than industrial relations. Over its term in government, Labor progressively dismantled the powers of the Australian Building and Construction Commission and abolished it in 2012. Almost immediately, as night follows day. militancy and violence was demonstrated on the streets of Melbourne with the CFMEU shutting down part of the Melbourne CBD in its aggressive protest at the Grocon Myer Emporium construction site. In that dispute workers on the site who were being blockaded purchased an advertisement in the Herald Sun with an open letter to their own union bosses asking for the blockades to stop and to be given access to their own workplace. Images of these protests were seen on television screens across the world. What message did that send to national and international companies about investing in building construction projects in Melbourne or Australia? In what was unfortunately only too characteristic of the approach in the building and construction industry, on 4 September 2012 in that same dispute which shut down part of the Melbourne CBD, senior CFMEU official Derek Christopher addressed a crowd of over 1,000 protestors on Lonsdale Street with a megaphone. With fewer than 100 police officers present, he said:

There’s 11,000 coppers in the country or in Victoria and there’s 30,000 members of the CFMEU and greater among the other unions when we call on their support, so we’re up around the 50,000 mark, so bring it on we’re ready to rumble.

The approach by this union thug epitomizes the approach taken to the application of the rule of law in the industry by the CFMEU, amongst others. The current industry regulator advises that the spread of unlawfulness in the industry was a feature of Victoria and Western Australia and has now spread to Queensland and South Australia.

The previous government was well aware of this type of behaviour in the building and construction industry, and so was understandably reluctant to abolish the Australian Building and Construction Commission despite the strong union pressure. It contracted Justice Murray Wilcox QC to review the industry to buy time. Justice Wilcox recognised the need for and the benefit provided by the Australian Building and Construction Commission, stating in his report:

… the ABCC's work is not yet done.

and that it would be unfortunate if the ABCC's replacement body led to a reversal of the progress that had been made. But that is exactly what we have seen.

The principal purpose of penalties in the legislation is as a deterrent. As the royal commission into trade union governance and corruption concluded in its interim report, there is a culture of wilful defiance of the law which appears to lie at the core of the CFMEU. Unions began budgeting for penalties for breaking industrial laws and treated penalties simply as a cost of doing business. The Federal Court noted that comments such as, 'The last time it cost us'—I will say 'a bucketload' of money; I do not want to swear!—'and it is going to be expensive, but our fighting fund will fix it'. This is evidence of an attitude on the part of branch officials that the risk of the imposition of significant pecuniary penalties will not be allowed to act as a constraint on unlawful activity which they consider to be warranted.

In recent findings against the CFMEU for contempt of the Supreme Court orders in Victoria—and this was for shutting down parts of the Melbourne CBD—the Supreme Court said that the imposition of a penalty for contempt of court should not be viewed as simply an anticipated cost of industrial action. Few things could be more destructive to the authority of the court and to the rule of law then the idea that fines or similar punishments akin to a tax that, once budgeted for, enable the use of unlawful conduct to achieve industrial outcomes.

When Labor abolished the Australian Building and Construction Commission, it slashed applicable penalties by two-thirds. This only made it cheaper for the CFMEU to continue its business model of breaking the law. Even when maximum penalties were still at a meaningful level, the Federal Court said that the CFMEU had a 'deplorable record' of contraventions, that the contraventions were significant and that substantial penalties for past misconduct had not served to prevent repetition.

It was a few months ago that the Federal Court handed down yet another penalty, finding against the CFMEU, noting that the CFMEU's continued willingness to engage in contravening conduct supports the view that earlier penalties, some of them severe, had not had the deterrent effect.

The court went on to speak, in relation to the CFMEU's contravention, about the deplorable attitude on the part of the CFMEU to its legal obligations and to the statutory process which govern relations between unions and employers in this country, and that this ongoing willingness to engage in contravening conduct must weigh heavily when the need for both specific and general deterrence is brought to account.

The court also went on to say that, not for the first time, the CFMEU sought to impose its will by means of threats and coercion against employers. Its approach was one of entitlement. It was free, despite legal constraint, to deploy its considerable resources in order to achieve its industrial objectives. The concept of the rule of law was anathema to it.

This is not some historical exercise; this is a real and current problem. We must not forget that the maximum penalties are reserved for the worst offenders and repeated offences. It is extremely unlikely that individuals are penalised anywhere near the maximum for first offences.

In what was the last of the Australian Building and Construction Commission's legacy cases—meaning that it was a last case before the maximum penalty was cut by two-thirds—the CFMEU was found to have broken the law when it shut down work on a Queensland government housing project, which would have provided housing for the long-term homeless. The CFMEU proceeded to use cars to block access to the site and abused any worker who tried to enter the site.

Workers were repeatedly called 'scabs, parasites and dogs' plus a smattering of unparliamentary expletives. In fact one CFMEU official, Paul Cradden, approached one of the site workers and flooded him with aggressive attacks, saying to him, 'Hey scabby, gay boy, gay boy, gay boy, scabby. The CFMEU officials also made sure to let people know who they were dealing with. The court's decision records that while people outside the main gate were yelling 'scum' and 'scab', a CFMEU official, Mr Miles, said to a group of contractors words to the effect of, 'You've all got a long time left in the industry and we can influence your future jobs.' The clear implication was: 'Do not cross the CFMEU. We will ruin you, your business and your livelihoods.'

The CFMEU think they are a law unto themselves. We cannot in this country allow this state of affairs to continue in this industry and assist the kind of behaviour that the Labor Party or the Greens, who continue to accept substantial donations of support from the union, condone. The Federal Court certainly did not. It fined the CFMEU and a string of its officials a total of $545,000 for their offences, but, despite such a penalty, the CFMEU has not been deterred and it continues to break the law as and when suits it. The point is this: if the former Australian Building and Construction Commission's penalties, which were larger, were only partially successful in deterring the repeated breaking of the law, what did Labor and the Greens really expect would happen when they slashed the maximum penalty for doing the wrong thing by two-thirds? We will no longer see the penalties of this magnitude because the penalty for wrongdoing was substantially cut.

Justice Logan called out the CFMEU for its outrageous disregard of the law, and reiterated the comments of other judges and Royal Commissioner Cole in condemning the union's perverse attitude to the law. In light of this, it is absolutely disingenuous to see the CFMEU feigning outrage at the government's efforts to restore lawfulness to the construction industry through the re-establishment of the Australian Building and Construction Commission. The CFMEU pretends that the construction industry does not require special regulation, when it is precisely because of the CFMEU's disregard for the rule of law that special legislation is necessary.

If you need any further example, who can forget what John Setka, now the CFMEU Victorian state secretary, said to a crowd of 100 people outside the Australian Building and Construction Commission offices? Directing his comments to the public servants working at the Australian Building and Construction Commission, this CFMEU official said:

And just for the task force, or ‘Rats’, ‘Dogs’ whatever they are—

he is referring to the inspectors, the public servants, employed by the Australian Building and Construction Commission—

just to remember one thing, when this is all over and they don’t exist anymore, they’ve got to work elsewhere and we will remember them 'cause we know every—

they really do swear a lot these union officials—

one of them; We'll never forget 'em.

Hindering regulatory powers is something that the CFMEU prides itself on. The former Labor government gave into unions demands and abolished the Australian Building and Construction Commission, replacing it with a severely curtailed version of the regulator in the Fair Work building industry inspectorate. As well as this inspectorate having its power substantially curtailed, it faced significant reductions in funding and cuts to staffing of around 30 per cent. In closing, I totally support this bill and the reintroduction of the Australian Building and Construction Commission. It is certainly needed so that we can cut down on the misbehaviour and the bad behaviour of the CFMEU.

Lisa Singh (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Attorney General) Share this | Link to this | Hansard source

I rise to speak on the Building and Construction Industry (Improving Productivity) Bill 2013 in the hope that it does not pass this Senate and also to make it clear why Labor opposes this legislation, which of course forces a return to the draconian Australian Building and Construction Commission. This bill is seeking to re-establish the Australian Building and Construction Commission, which was created in 2005 theoretically to investigate breaches of federal industrial law in the building and construction industry. In reality, it was then something far more pernicious and its re-establishment threatens no less than that.

The ABCC's proposed powers are extreme, to say the least, and undermine this country's very civil liberties. But before I continue, I must bring to the Senate's attention the consistent ideological attack of the Abbott government upon the working people of Australia, which really goes to the foundation of this bill. The attack by the conservative Abbott government on working people, who organise together to protect their rights, is explicit both in this bill and in the establishment of the biased, prejudicial and political witch-hunt this government calls a royal commission.

I will not reflect upon the character of anyone involved in the royal commission, although whether the commissioner can continue in his role due to the clear present bias and the political nature of his appointment is an issue worth debating. Instead, I want to draw to the Senate's attention the foundational common law case Crown and Sussex Justices, ex parte McCarthy from1924 in which it was found:

… that justice should not only be done, but should manifestly and undoubtedly be seen to be done.

And that:

Nothing is to be done which creates even a suspicion that there has been an improper interference with the course of justice.

The simple facts of this case are that Justice Dyson Heydon, whilst royal commissioner of an $80 million quasi-judicial inquiry into unions and Labor prime ministers, accepted an invitation to speak at a Liberal Party fundraiser. He has created at least the appearance of bias and, even to the most unreasonable person on the street, he has raised a suspicion that his professional judgement might be unduly influenced.

The Prime Minister has described Justice Heydon as the most distinguished person in the legal profession. If that is so, I then have no doubt that a man of Justice Heydon's distinguished legal experience and expertise knows that he has no other option but to recuse himself from the commission. I think that the commissioner really needs to consider whether his ongoing role in the royal commission is tenable.

Justice, however, will not be accorded to workers who are brought before the reconstituted ABCC when it uses its reconstituted powers under this bill to compel workers to suffer secret interviews without legal representation and under the threat of imprisonment if they resists coercion. These powers are excessive, undemocratic and unwarranted. It sounds like something directly out of the Stasi handbook of the 1950s. This bill extends the reach of the ABCC into picketing, offshore construction and the transport and supply of goods on building sites. The new powers are aimed squarely at stopping pickets and include a reverse onus that will require individuals to prove they were not motivated by industrial objectives to escape the mere $34,000 penalty that will be put upon them if they were.

The case for the reintroduction of the ABCC has not been made. We know that Labor's Fair Work Building and Construction agency already has sufficient powers to deal with any unlawful behaviour in the industry. The ABCC is based on flawed modelling and its proposed powers, as I said, are extreme and unnecessary and compromise our civil liberties.

Further, I find that this particular legislation is demonising and discriminating against workers in the construction industry—against a particular group of workers. It is subjecting them to harsher laws than any other workers in this country. No other workers are being subjected to this level of demonising and discriminatory law changes. The Abbott government's determination to take Australia back to the ABCC shows a return to something very similar, in my belief, to Work Choices, which, as we know, lurks just below the surface of this government.

As I said, the Fair Work Building and Construction agency established by Labor already has sufficient powers to deal with any unlawful behaviour in the industry. It has a full suite of appropriate investigation and prosecution powers to deal with any unlawful behaviour, whether by employers, employees, unions or contractors. Fair Work Building and Construction is undertaking more investigations, concluding more investigations, getting more matters to court faster and recovering more money for workers in the industry. Indeed, Fair Work Building and Construction has already recovered more than $2 million in unpaid wages and entitlements for more than 1,500 workers. Those were the sorts of breaches that the ABCC never focused upon. It was quite happy for workers to miss out on their fair share of wages and conditions. Those are the sorts of breaches which need to be readily investigated for a fair and transparent industry.

ABS data shows industrial disputation in the building and construction industry is, on average, less than one fifth the rate seen under the previous coalition government. Labour productivity has increased over the last 10 quarters and is almost three times higher, on average, under Fair Work than under Work Choices. Under Fair Work, the rates of industrial disputes are around one-third the rate we saw under the previous coalition government, yet the conservative Abbott government does not want to listen to any of that good news for workers and for employers. The government is not interested in giving workers a fair go. The government is only interested in systematically pursuing Australian workers through draconian laws like this.

Labor's dissenting report to this bill made very clear that there are very serious concerns of the human rights impact of this legislation. In fact, Labor believes that this bill represents a direct attack on the common law rights and privileges which form the cornerstone of our democratic and legal systems. This legislation seeks to demonise an industry, treat its workers as criminals and remove their rights in law. Not only will Labor oppose this bill but we will fight the Abbott government's ideological war on working Australians every single step of the way, including in the building and construction industry. We will continue to fight so that all working Australians will receive the fair living wage they deserve for the hard work they do in all industries and we will also ensure that the rights of all Australians are given equal respect under the law. It is for these reasons that Labor opposes this draconian legislation which tries to return the ABCC into law. It is my hope that it does not pass the Senate. It is my hope, very much, that those in the Senate, particularly those on the crossbenches, see sense to the threat of this law to our civil liberties, to the human rights of workers and to the demonising of a particular set of workers in this country and uphold the Australian ethos of the fair go for all.

Bob Day (SA, Family First Party) Share this | Link to this | Hansard source

I rise today to talk about the Building and Construction Industry (Improving Productivity) Bill 2013 and related bills. It is a subject that I know a little bit about because I have worked in the building and construction industry for nearly 40 years. However, a definite split has developed over the years between the commercial construction industry on the one hand and the housing construction industry on the other. The glaring difference between these two construction environments is that you do not get the kind of criminal conduct on housing construction sites that you do on commercial construction sites. So what is the difference? Why do we not have the criminal behaviour, or anything like it, at home-building sites in the housing industry? The answer is: we do not see the CFMEU and its members on housing construction sites. We are having this debate about reinstating the Australian Building and Construction Commission. It is because the ABCC is the only body capable of keeping the CFMEU in check on commercial building sites.

Those who have been listening carefully to my questions to various ministers in this place will know that I have been advocating for unemployed people to be able to work on terms and conditions which suit them. The unemployed are presently trapped in a workplace regulation prison. They cannot escape because there are so many patronising organisations that say, 'We have to lock you up in this workplace regulation prison for your own good, because you might be exploited if we let you out.' Yet, as I have mentioned in examples before, nobody stops young people from travelling to some of the most dangerous places on earth where they could be taken hostage or harmed. Yes, the department of foreign affairs issues travel warnings about some countries, but it ultimately respects the rights of people to go wherever they like in the world and take whatever risks they like. There is no travel prison regulating where people can travel. For some reason, we respect an Australian citizen's inalienable right to travel and expose themselves to potentially life-threatening risk, but if they want to go and work somewhere then they are captive to over 2,000 pages of workplace regulations. In some circumstances, the work they might wish to do on terms and conditions which suit them is illegal for them to engage in. We hear the term 'paternalism' used in this place and throughout history, but the epitome of paternalism is the workplace regulation prison.

I challenge one person arguing in favour of workplace regulation to say that they have never taken the cheapest quote to have a job done. Whether it is something you need fixed at home, the servicing of your car or which hairdresser you go to, it is human nature to shop around or to change service providers because you have found a better deal. This is not considered criminal behaviour when you choose the cheapest quote, yet somehow when it comes to labour in other contexts there are regulations to say that the minimum price, for example, for working on a weekend is $40 an hour. But please spare a thought for the thousands of unemployed who are struggling on $5 an hour. These people are ready, willing and able to work for $20 an hour but it is against the law. The law says, 'No, cafe owners and others must pay $40 an hour'. But the cafe owners and others cannot afford $40 an hour, so they do not open their doors. Everyone loses: the unemployed person stays on the dole, the cafe owner cannot open and the customers cannot buy what they want. It is immoral to deny people the right to work and support their families. The contrary view on workplace regulation is this view that you simply must lock up the unemployed in this prison to protect themselves from exploitation. It is the very reason that these powerful organisations are a law unto themselves—but I digress.

Returning to the dire state of the commercial construction industry, what we are seeing here is leadership failure at every level. At the last count there were something like 80 different definitions of leadership. My favourite definition of leadership is: that which you will not tolerate. What is it that you will not tolerate? That determines what kind of a leader you are. What we are seeing in the commercial construction industry is a total failure of leadership. Let us look at some of them. The previous Labor government deliberately removed any notion that it was necessary to constrain criminal behaviour by certain unions. They were prepared to tolerate criminal behaviour—a failure. The police have failed to uphold the law in favour of so-called keeping the peace. They will tolerate criminal behaviour if it means keeping the peace—another failure of leadership. The courts have failed to uphold justice. In some cases those who have suffered unlawful behaviour wait years and years for justice. As we know, justice delayed is justice denied, and now we see in this bill the government's desire to increase penalties out of frustration at the relatively low penalties and, therefore, the low economic incentive to promote lawful behaviour. The judicial system: another failure of leadership.

When you have these growing power bases developing on construction sites, you get ridiculous situations such as those this bill seeks to rectify, including: contractors being forced to employ a non-working shop steward; situations where, if one worker is offered overtime, all workers have to be offered overtime, even if there is not enough work; and trade contractors being required to provide certain conditions to their workers even if they already have lawful arrangements with them. This bill would hope to address these and other allegations of standover tactics, intimidation and violence.

The Independent Contractors Association of Australia asserts in its submission to the Victorian CCCU inquiry that independent contractors working on the Westgate Bridge upgrade in 2009-10 were taunted regularly with 'It's a long way to fall, mate' because they were not members of the CFMEU. This is outrageous. Never in 40 years of working on housing construction sites have I heard someone saying to a fellow construction worker, 'It's a long way to fall, mate.' The ICA has posted footage of the violence and foul verbal abuse that workers were subjected to entering a worksite. The ICA went on to assert that, when the ABCC was in operation before 2010, the ABCC 'in large measure curtailed a good deal of the abuse and harassment in the Victorian construction industry, although'—sadly—'it did not eliminate it'.

The Greens talk at times about a 'social licence to operate'. In my opinion, the CFMEU does not even have a social licence to exist, let alone operate. Senator Lambie has called for the CFMEU to be deregulated. In his book Blink, Malcolm Gladwell talked about 'thin slicing'. Blink is the book and I recommend it. Weighing up situations in the blink of an eye. Looking for the shibboleths, the dead giveaways. For those who are not familiar with the Old Testament, 'shibboleth' is Hebrew for stream. Jephthah and Gilead fought Ephraimites and captured the Jordan crossing. To distinguish who was friend or foe, they had everyone say the word 'shibboleth'. If they could not pronounce is correctly, they knew they were the enemy. Hence 'shibboleth' became an identifier or a dead giveaway. It would be like hearing someone say, 'Where did I put my jandals?' Straightaway you would know they are a New Zealander. It is a shibboleth. Gladwell calls it 'thin slicing'. He says you can take a big salami and, no matter how thinly you slice that salami, everything you want to know about the whole salami is in that thin slice.

I note the CFMEU gave over $100,000 to the Greens before the last election. How morally bankrupt can you get when you oppose this legislation and you have received money from the CFMEU. The Greens, the party that pretends to be a party of ethics and morality, gladly takes money from the CFMEU. There's your 'blink' moment, your 'thin slice' of the Greens. The Greens shibboleth. Everything you want to know about them is right there.

By contrast, look at the Shop, Distributive and Allied Employees Association. I have never once heard allegations that they have engaged in criminal behaviour or provided funding to the Greens. The Shoppies have more in common with Family First than the Greens. The Independent Contractors Association says in the submission I mentioned earlier that the previous federal construction code changed the dynamic of reducing the violence, harassment and intimidation on construction sites. It did so because:

… any construction business that was involved in or permitted anti-competitive industrial relations activity (including violence and intimidation) found itself excluded from government work. This changed the commercial ‘reward’ system because the financial benefits from violence and intimidation were largely removed. Unfortunately this was undone with the closing down of the ABCC.

This bill creates the capacity for a new building code. I have heard about the huge cost blow-outs, enabled by the existing code. In my home state of South Australia the state Labor government is building a brand-new hospital, recently built a health and medical research institute, made a major expansion of the grandstands at Adelaide Oval and is, with the help of the Commonwealth, about to commence major and long-overdue roadworks. We have had to fight hard to get Commonwealth funding to support those projects and yet where will a significant percentage of that federal taxpayer money go? It will go into supporting the inefficiencies provided by the current building code.

Look at the stadium construction project my Western Australian colleagues have happening in their capital and at the new footbridge they think will be better than Adelaide's new footbridge. Indeed, just on Thursday TheFinancial Reviewreported that 76 workers at the new children's hospital project in Perth were found, by the Federal Court, to have engaged in unlawful industrial action—on a children's hospital project! I see Senator Smith nodding. This happened in his home state. If taxpayers in the states that we senators here represent want value for state and federal taxpayer money we ought to demand that building codes support efficient civil construction projects—and that is not to mention private projects like the Olympic Dam expansion and other mining opportunities. When you have major inefficiencies, such as major work stoppages on questionable grounds, it is proper for the government to look at how we can ensure that those trying to create jobs and improve our economic situation can get on with the job to deliver projects on time and on budget. Let me quote from a report by Deloitte Access Economics, of last year, submitted to the Productivity Commission:

It is also worth highlighting that the rate of engineering construction cost increase has been notably higher for public sector projects … than private sector projects. Given the significant demand seen for resources investment, and the combination of a rising $A and high import component for resources projects … costs of imported materials … one might have thought this would be the other way around.

A loss of competitiveness in delivering infrastructure projects creates difficulties for the Australian economy …

I have heard allegations being made in this place about behaviour on construction sites and towards Fair Work Building and Construction officials which make one's hair curl. They are appalling allegations. I was willing to support the continuation of the powers needed by Fair Work Building and Construction during a previous session of the parliament when they were about to expire, because I believed there were legitimate concerns that needed investigation. For those same reasons and the factors I have outlined, whilst I am not generally in favour of expanding government power, the situation in the commercial construction industry has become so bad that we need to restore the ABCC. I support the bill.

Dean Smith (WA, Liberal Party) Share this | Link to this | Hansard source

Thank you very much for another very well informed and considered contribution to these matters, Senator Day. Those senators on the other side of the chamber would be well served if they paid more attention to contributions like Senator Day's. I commend him for that very powerful presentation.

It is also my pleasure to make a contribution this morning in support of the Building and Construction Industry (Improving Productivity) Bill 2013 and related bill, which should be fairly uncontroversial in the sense that all the bill is doing is making sure workers in the construction sector go about their jobs each day without the fear of being harassed, intimidated or otherwise put upon by thugs within the Construction, Forestry, Mining and Energy Union.

But before I proceed I just want to comment briefly on a contribution I heard from Senator Singh. If I heard her correctly she seems to take exception to the reverse onus of proof which is contained in this bill. I would just like to point out to Senator Singh and to other Labor and Greens senators who might make a contribution to this that such a provision is taken, pretty much cut and pasted I dare say, from the Fair Work Act that was passed by the former Labor government—cut and pasted from the Fair Work Act passed by the former Labor government! So, I think it is beholden on each and every speaker following on from me on the Labor side and on the Greens side to first and foremost answer these questions. What is their position? Is it consistent with the previous position? Has it changed from the previous position? And why might that be the case? So, that is a challenge for subsequent speakers.

Of course, the Labor Party cannot survive without the rivers of cash that flow to it from the union movement in this country. This point was demonstrated ably by Senator Day. And so it is that in the course of the debate on this legislation both here and in the other place, we have had the sorry sight of Labor members and senators getting to their feet and making excuses for bullying, intimidation and violent behaviour on construction and worksites across our country—indeed, even in my own state. I will come to that briefly.

It is really quite sad to see the once-great Labor Party reduced to such a state, but there we have it. I will come to some specific examples of the sort of conduct that Labor seeks to excuse in a brief moment. This legislation, however, goes to the heart of dealing with something that the Intergenerational report released earlier this year makes clear we must deal with, and that is improving productivity. We have heard, and we will no doubt continue to hear, histrionics from Labor senators about the provisions in this legislation. But desperately as they might wish otherwise, this is not a part of some grand conspiracy. This legislation is doing no more than what the coalition said we would do in the lead-up to the 2013 federal election.

This bill will finally re-establish the Australian Building and Construction Commission, a genuinely strong and independent watchdog that will maintain the rule of law to protect workers and constructors and to improve productivity on building sites and construction projects whether onshore or offshore. This legislation will at long last reverse some of Labor's changes to the workplace relations laws which underpinned the Australian Building and Construction Commission before it was abolished by the Gillard government in 2012.

The bill prohibits unlawful industrial action, unlawful picketing and coercion and discrimination. It will put in place penalties that are high enough to provide an effective deterrent to breaches of these provisions. A number of effective remedies, including injunctions, will also be available to the ABCC and to persons affected by unlawful behaviour.

In passing this legislation the coalition government will finally be able to return some of the certainty and stability to the construction sector which went missing when Labor abolished the ABCC three years ago. Once again, we can banish some of the worst aspects of thuggery and lawlessness from construction sites across the nation and, most particularly, sites in Victoria and in my own state of Western Australia, where the corrosive culture within elements of the union movement have acted as a handbrake on economic activity for far too long.

Just to remind ourselves of the history of this issue: it was well known to insiders and to outsiders alike over many years that Australia's construction sector was home to the nation's most terrible examples of industrial thuggery and lawlessness. That was why in 2001 the Howard government's then workplace relations minister and now Prime Minister, Tony Abbott, established the Cole royal commission. It found that the standards of commercial industrial conduct exhibited in the building and construction industry varied significantly from those in the rest of the Australian economy—and not in a positive way.

Witness after witness testified to criminal conduct and unlawful and inappropriate conduct, including breaches of the relevant workplace relations and work health and safety legislation, and a blatant disregard for the law. When it came to my own state of Western Australia, the Cole royal commission found that:

… the rule of law has little or no currency in the building and construction industry in Western Australia.

'The rule of law has little or no currency.' Again, I quote:

The building and construction industry in Western Australia is marred by unlawful and inappropriate conduct. Fear, intimidation and coercion are commonplace.

Thus, in line with the recommendations that flowed from the Cole royal commission, the then Howard government moved in 2005 to set up the Australian Building and Construction Commission, a strong watchdog that would tackle lawlessness front-on. It was a strong, specialist regulator that enforced the rule of law applying to the building and construction sector.

Naturally then, as now, the move was opposed by the Australian Labor Party, which, at the end of the day, cares more about receiving its donations from the CFMEU than it does about the rule of law on Australia's construction sites. And over the three years between 2005 and 2012 when the Gillard government abolished the ABCC, what was the contribution of this body, which was detested, maligned and finally abolished by the Labor Party? According to independent research undertaken by Independent Economics in 2013, building and construction industry productivity grew by more than nine per cent, consumers were better off by around $7.5 billion annually and fewer working days were lost through industrial action.

A rational and responsible political party would look at those things and think they were positives. They would speak from the evidence. Alas, though, we are talking about the Australian Labor Party, aided and supported by the Australian Greens, led at the time by Julia Gillard and staunchly supported by her at the time loyal minister for industrial relations, Mr Bill Shorten. Instead of exhibiting a bit of leadership, standing up to union leaders and telling them that, actually, the way that they had been behaving was not on and the ABCC was needed to keep the militants and lawbreakers within their ranks in check, what did Julia Gillard and Bill Shorten decide to do? They rolled over and did exactly what the CFMEU and other unions were demanding, and abolished the ABCC.

Of course, no-one would have been more delighted by this complete capitulation to union thuggery than the likes of Joe McDonald, the secretary of the CFMEU's WA branch. Without the ABCC in place, he has been free to resume his traditional disgraceful behaviour. Earlier this year Mr McDonald, who has a long history of bullying, intimidation and thuggery on Western Australian building sites, was fined $30,000 and banned from a Perth construction site for three years—once again for bullying. He was found to have threatened to have workers 'thrown off every building site in Perth' if they did not support strike action the CFMEU was encouraging. This is not an isolated case. Joe McDonald has repeated form in this area. Not long ago he and the CFMEU were fined almost $200,000 for their role in unlawful industrial action at the Citic Pacific Sino iron ore site in the Pilbara, in the far north of my home state. The federal court judgement in that case found:

Mr McDonald’s conduct involves a calculated and careless attitude to the law governing the employment of persons by employers. It was calculated to cause disruption to employers carrying out building and construction work on the site and it was careless in that McDonald was aware of the legal consequences of his actions and pursued them nonetheless.

Indeed, Mr McDonald was proud of his flagrant disregard for the law. On that occasion, when his right to be on site was challenged because he did not possess a right-of-entry permit, he blithely said:

I haven’t had one for seven years and that hasn’t—

expletive—

stopped me.

All told, Mr McDonald and the CFMEU have, between them, been penalised to the tune of more than $1 million over the past decade for illegal industrial actions. Joe McDonald's history of criminal thuggery is well known to Western Australians. Indeed, it became well-known nationally in 2007—so well known that the then Labor leader, Kevin Rudd, ordered his expulsion from the Australian Labor Party. Julia Gillard was right on board at the time, saying:

Kevin [Rudd] and I have made it clear that under our leadership of the Labor Party there will be zero tolerance for unlawful conduct, for thuggery, in Australian workplaces.

Yet she seemed to have had a change of heart because less than six years later Mr McDonald was readmitted to the ranks of the Australian Labor Party where, so far as I am aware, he remains as a member to this day. True or false: does Joe McDonald remain a member of the Australian Labor Party to this day? Perhaps future speakers from the Labor Party might like to clarify that point for me.

That is not to say that the CFMEU's mischief is limited to the confines of my home state of Western Australia. Indeed, in Victoria the problems have been even worse. Almost the moment that the former Labor government abolished the ABCC in 2012, we saw a significant upswing in disgraceful conduct from the CFMEU in Victoria. In September that year, the CFMEU sanctions brought Melbourne's CBD to a virtual standstill. If you wanted an insight into the mindset of the CFMEU's leadership, there could scarcely be a more powerful one than the sight of its leaders telling a crowd of its members:

There’s 11,000 coppers in the country or in Victoria and there’s 30,000 members of the CFMEU and greater among the other unions when we call on their support, so we’re up around the 50,000 mark, so bring it on, we’re ready to rumble.

That is what we are dealing with: basically, a union leader saying, 'Don't worry, comrades, we can take on the cops.' That might appeal to those who exist in a fantasyland where every day is a goodie versus baddie Hollywood style script—a battle between the poor downtrodden worker and moustache-twirling capitalists—but it simply does not reflect modern reality.

More than that, such behaviour does absolutely nothing to promote the certainty and stability that the construction sector requires. In case it needed pointing out, the companies that the CFMEU demonises are the ones that actually create jobs for its members and, importantly, for its members' families. The union itself does not create jobs; it seems to create only trouble. No stronger proof of the complete disconnect between the CFMEU and the interests of ordinary workers is needed than the fact that in 2012 workers on building sites published an open letter in the Herald Sun newspaper, not to the government but to the leadership of the union that supposedly represents their interests, begging them to stop the blockades and the violence and to allow workers on site so they could go to their jobs. It really is utterly perverse: workers having to beg their own union to let them do their job.

One wonders how it is that the Leader of the Opposition, Mr Shorten, continues to tolerate this situation given the clearly criminal conduct undertaken by members of that union, including its senior figures like Mr McDonald, in Western Australia. Perhaps he values union donations more than the rule of law. Does Mr Shorten, the opposition leader, value union donations more than the rule of law? Perhaps future Labor senators speaking on this bill can clarify that point: does Mr Shorten, the opposition leader, value union donations more than the rule of law? Then again, perhaps we should not be surprised by his attitude, given the Leader of the Opposition's seeming attraction to militant union activity. That is no exaggeration. In 2013, in his capacity as Minister for Workplace Relations, Mr Shorten flew to Perth to address the conference of the Maritime Union of Australia. Standing in front of a banner boasting 150 years of militant struggle, Mr Shorten cheerfully told delegates: 'There's no place I'd rather be in Australia.' 'There's no place I'd rather be in Australia' than in front of a sign that talks about 140 years of militant struggle?

Of course, earlier this year we saw the MUA's ugly underbelly once again when, at its 2015 conference, a journalist from The Australian, Mr Andrew Burrell, was assaulted by an MUA member for the crime of attending the conference, which the MUA itself had invited him to attend. The MUA's WA secretary, Christy Cain, tried to distance his union from the attack. However, Mr Cain also sought to excuse the aggressor, subsequently identified as Mr Campbell Walton, on the ground he was suffering stress due to unemployment, except we later learned that was not true. Mr Walton is employed. He works as a stevedore in Perth and also owns his own earthworks business. Once again, we see a culture of thuggery, intimidation and violence from the union movement in Western Australia. Once again we have deafening silence on these issues from the union movement's backers here in the Senate. It is interesting to note, Senator Day, that during my contribution so far, not one Labor senator has come into this chamber, and the two Labor senators sitting in the chamber have not challenged what I have said—

Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I have.

Dean Smith (WA, Liberal Party) Share this | Link to this | Hansard source

I have not heard a word, Senator Bilyk.

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Order! Ignore the interjection, Senator Smith, and I would encourage you not to invite the interjections.

Dean Smith (WA, Liberal Party) Share this | Link to this | Hansard source

When are the Labor Party going to say enough is enough and exile these rogue unions from its ranks? When are the Labor Party going to say enough is enough? Only when they are challenged by a coalition senator. What makes all this especially disappointing is that there are good unionists out there.

Senator Bilyk interjecting—

This is a most important part of my contribution, Senator Bilyk. What makes all this especially disappointing is that there are good unionists in our country. There are those who genuinely try to provide a service to their members. I do not doubt that for a second, but their efforts are constantly overwhelmed by behaviour from their colleagues that is either aggressive or criminal or just downright stupid.

You do not have to take my word for it, and indeed I am sure you will not take my word for it. Not long ago, Mr Mark Olson, the WA state secretary of the Australian Nursing & Midwifery Federation, penned an opinion piece in which he called for unions to focus on their core business, which he believes might actually stop haemorrhaging membership numbers. He condemned the recent 'paltry gathering of a few hundred at the steps of Western Australia's Parliament House', which was supposed to represent a mass worker uprising but instead made him:

… wonder why this event was even happening, other than to try and help Labor … and perhaps boost the profiles of some union heavies in an election year.

He went on to say:

Workers are sick of self-serving union officials, helping out their buddies in the movement and in Labor, and not focusing on what's best for their members.

Indeed, Mr Olson is quite right, which is why workers are voting with their feet and why self-serving union figures like Mr Joe McDonald and Mr Christy Cain are resorting to increasingly desperate tactics to try and maintain their own relevance. This government is not about to let them do that, and it is certainly not going to do so at the expense of the national productivity growth.

Under the provisions of this legislation, the Australian Building and Construction Commission will be led by its commissioner, who will have the critical task of monitoring, promoting and enforcing appropriate standards of conduct by building industry participants and referring matters to other relevant agencies and bodies as required. The commissioner will also be responsible for investigating suspected contraventions of the law by building industry participants. They will also institute or intervene in proceedings in accordance with those laws and provide assistance and advice to building industry participants on their rights and obligations under designated building laws.

This government will make certain that the ABCC once re-established will be properly funded to ensure it can do its work and restore some certainty to the nation's construction sector, on which so much direct and indirect employment depends. This legislation enables the Australian Building and Construction Commissioner to compel witnesses to attend an examination, or to produce documents, in circumstances where he or she reasonably believes that the person has information or documents relevant to an investigation into a suspected contravention of workplace relations laws. This is critical in making certain the re-established ABCC is able to carry out its investigations effectively. I have much more to say, but time is definitely against me.

Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I have to say I find it curious that the Prime Minister who said that Work Choices is 'dead, buried and cremated' seems to take a fairly backward step to the dark old days of Work Choices every time his government seeks to introduce a workplace relations bill to this parliament. While Labor struck a good balance between the rights of workers and the needs of employers in the Fair Work Act, every legislative move by this government has attempted to tip the balance unfairly back in favour of business.

We will be debating legislation this week which would tie up unions in so much red tape that they would be unable to effectively do their job—so much for a government that seeks to reduce red tape. Let us look at what has happened so far. So far we have seen legislation that will make it more difficult for union representatives to enter workplaces or talk to workers. We have seen attempts to reintroduce AWAs via the back door by weakening the better-off-overall test. We have seen the government dump Labor's 'clean start for cleaners' contracting principles, cutting the wages of cleaners who clean the buildings of government agencies, including this place. We have seen a highly centralised approach to bargaining across the Australian Public Service in an attempt to put strict caps on conditions and pay increases. We have seen the government try to cut paid parental leave for thousands of parents, mostly mothers, referring to many of them as 'double dippers' and 'rorters'.

In addition to the legislative attacks on unions and workers' rights and entitlements we have also seen $80 million of taxpayers' money already wasted on a political witch-hunt, the Productivity Commission being used as a proxy for the government's attack on penalty rates and the government flagging plans to legislate to wind back the protection of wages and conditions for Australian-crewed ships.

Work Choices is not 'dead, buried and cremated'; it is merely in hibernation. They have merely had it lying low. Let us not ever forget that Mr Abbott said Work Choices was 'good for wages; it was good for jobs; and it was good for workers'. Despite their rhetoric, we know that the coalition cannot walk away from Work Choices. The urge to reintroduce elements of Work Choices is Pavlovian. It is in their DNA. So it should not surprise any of us that the Abbott government will continue its attack on workers by dusting off its draconian Australian Building and Construction Commission, or ABCC.

The establishment of the ABCC, as Senator Smith said, followed the Cole royal commission. Senator Smith had a lot to say on the Cole royal commission, but there are a few things he did not mention, and I will come to those. The Cole royal commission was effectively a futile and very expensive exercise initiated by the current Prime Minister when he was workplace relations minister. It took 18 months and some $66 million to run the Cole royal commission but—and this is the bit Senator Smith did not say in his somewhat biased comments—after 18 months and $66 million of taxpayers' money, do you know how many criminal convictions the government managed to secure? Would anyone on that side like to hazard a guess? Let me tell you. None, not one, zilch, absolutely zero. So much for the supposed criminality, fraud and corruption in the building and construction industry.

It appears that Mr Abbott and those opposite have not learnt their lesson about the folly of using royal commissions to pursue ideological battles. A royal commission is meant to be an instrument of justice, not a political instrument. It is meant to shine a light in dark places and investigate matters that have been unable so far to be uncovered. But the Cole royal commission was the start of a pattern displayed by those opposite, a pattern of using royal commissions to pursue their ideological battles against political rivals.

Now we have got the long-running, expensive political witch-hunt in the form of the Royal Commission into Trade Union Governance and Corruption. For those in the gallery and those listening who may not be aware that the trade union royal commission is a political exercise, on this side we are particularly concerned with the royal commissioner's judgement in accepting an invitation to help raise funds for, guess who, the Liberal Party. The recent revelations about Mr Abbott's royal commission and his captain's pick of a royal commissioner, Mr Dyson Heydon, confirm this. The community have legitimate concerns about the affinity of the commissioner with Mr Abbott and the Liberal Party. In fact, over the weekend I do not know how many people spoke to me about it.

I believe the commissioner really needs to consider whether his ongoing role in the royal commission is tenable. The royal commission is and always has been a political exercise commenced by Mr Abbott to go after his political enemies. And who are his political enemies? The Labor Party and the trade union movement. I believe that only a lawyer with a predisposition to the Liberal Party would have taken on this blatantly political royal commission. You only have to look at the terms of reference to know the intention of the government and that it is a political witch-hunt.

In regard to the fundraising event that the commissioner was going to attend, no matter what the commissioner knew and when, it is clear from his own correspondence that his predisposition is to the Liberal side of politics. To top it all off, we have seen the New South Wales Liberal Party absolutely refusing to reveal when the commissioner was invited to speak at the Liberal Party fundraiser, an event that we all know has been addressed by prominent Liberals since it commenced in 2010. So I think there needs to be a bit of revisiting some of the commissioner's conduct, some of the commissioner's rulings and some of the commissioner's conclusions so far and the question needs to be asked: was any of it was influenced by the commissioner's political world view? The commissioner has consistently gone beyond what might constitute corruption to what is legitimate industrial behaviour dealt with according to the industrial laws in place in this country.

The tendency of those opposite to use royal commissions as a political instrument has many unfortunate consequences. One in particular is that they waste tens of millions of dollars of taxpayers' moneys for absolutely no public benefit. Just look at the Cole royal commission. They are an exercise designed to produce a headline, to fight ideological battles and to embarrass the political rivals of those opposite. Another unfortunate consequence—and one I think is really sad—is that they have the potential to undermine the credibility of those royal commissions that actually are being used for public benefit and for justice and that are not merely a political exercise. With the royal commission currently being conducted into the serious issue of child sexual abuse—an issue which everybody in this place knows I am very passionate about—I consider this to be extremely unfortunate.

While those royal commissions that are used as an expensive political exercise by those opposite help to generate a headline, they are also a useful excuse for the coalition to introduce legislation aimed at gaining further power over their political rivals. And this was the other purpose of the Cole royal commission—to be the catalyst for establishing one of the most draconian bodies in Australia's history.

There is absolutely no justification for this bill we are debating today. There is already a watchdog for the building industry, and it is highly effective. The building industry watchdog that Labor put in place, Fair Work Building and Construction, has actually been outperforming the ABCC. Fair Work Building and Construction is undertaking more investigations, concluding more investigations and getting matters to court faster and recovering more money for workers in the industry. It has secured over $2 million in unpaid wages and entitlements for more than 1,500 workers. Under Fair Work, labour productivity is up, and industrial disputations have dropped dramatically compared to their levels under the Howard government.

The Abbott government use flawed modelling to back its argument that a body such as the ABCC needs to be reintroduced. The firm whose report they relied on, which is now called Independent Economics and was called Econtech, has a history of churning out report after report purporting to support the case for the government to attack the CFMEU. The claims in the report—particularly that the ABCC produced $6 billion in productivity savings—have been debunked by a range of people, including Justice Murray Wilcox QC, the Queensland Government's department of industrial relations, and academics from Griffith University. Justice Wilcox said the modelling is 'fundamentally flawed' and 'ought to be totally disregarded'. So basically you can disregard any comments that those on that side make in regard to those reports. But far be it from those opposite to engage in evidence-based policymaking, unless they are relying on discredited evidence which suits their predetermined agenda. For those opposite, this is personal and ideological. We know, as I have said, that Work Choices is in their DNA. We know that a coalition government will stop at nothing in attacking the rights and entitlements of workers. And we know that they will stop at nothing to attack those who stand in their way, particularly the trade union movement.

They do not like the fact that workers organise and bargain collectively, that they can negotiate on an even footing with big business—after all, big business are their financial and political backers, their mates. Those opposite, the Liberal-National coalition, are in their corner on workplace relations, just as they are on issues like multinational tax avoidance. Yet, those opposite have learned the hard way that Work Choices is politically toxic, so they try the boiled frog approach instead—introducing legislation bit by bit, aimed at cutting entitlements and attacking the collective power of the trade union movement. I think the Australian people are too smart to be fooled by that. They will not accept Work Choices 2.0 any more than they will accept the first version. Draconian bodies like the ABCC are part of the architecture of Work Choices and they should rightly be rejected.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

At this stage, I would like to indicate that I will support the second reading of the Building and Construction Industry (Improving Productivity) Bill 2013 and related bill, but I reserve my position on the third reading. There are matters that I believe need to be thoroughly negotiated with the government, and with the opposition, in my view, to involve key stakeholders. That includes not only industry groups that are concerned about the state of play on building sites in this country but also the unions. These bills propose measures that are controversial and contentious. On the one hand, unions have a vital role in Australia's workplace relations system and they must have the freedom and power to be able to do their jobs. That involves not just issues about terms and conditions for their employees—obviously fundamental—but also issues of workplace safety.

Whilst I was a member of the South Australian parliament, I did propose, and it was rejected by a state Labor government, that we ought to have industrial manslaughter laws. I think we need to have tougher laws in place when it comes to workplace safety and there ought to be appropriate and strong penalties in respect of that. Insofar as unions require a right of entry for the purpose of safety issues, then I think that is quite fundamental and ought not to be derogated from.

On the other hand, concerns have been raised through the royal commission, and the Boral court case cannot be ignored—and I will refer to that shortly. I think it is appropriate, at this stage, to refer to the controversy around Royal Commissioner Dyson Heydon and the invitation to a Liberal Party fundraiser. Notwithstanding that not much money probably would have been raised at that fundraiser—presumably there can be auctions and other peripheral fundraising activities that usually occur at these things—it was an invitation about which we need more information from the royal commissioner. I think it is quite reasonable for the royal commissioner to provide a detailed and thorough explanation as to what he was aware of at the time he accepted the invitation, when he accepted the invitation and whether he was the commissioner or about to be appointed as commissioner for this royal commission. If he did so whilst he was royal commissioner and he assumed that the royal commission would be over by then and that there would not be a problem attending this fundraiser, and he was aware that it was a Liberal Party fundraiser, then, on an objective basis, I think that would show a significant error of judgement on the part of the royal commissioner. If so, he ought to be apologise for that.

Notwithstanding what the member for Sturt has said, that this was a birthday gift for him the other day on his 48th birthday—and happy belated birthday to Christopher Pyne—as you know, Acting Deputy President—

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

I would ask you to refer to the member for Sturt by his appropriate title, Senator Xenophon.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

What title would that be?

Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Mr!

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Mr Pyne, sorry—the Hon. Mr Pyne. Thank you for defending the honour of the Hon. Christopher Pyne, Mr Acting Deputy President. I am very grateful for being pulled up on that.

Richard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Agriculture) Share this | Link to this | Hansard source

A principle worth upholding.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

It is worth upholding. It was unambiguously a very serious issue that still needs to be ventilated because there are issues that some have raised about apprehended bias. I know there are different academics raising different views about this. I note that Julian Burnside—no friend of the coalition government—has defended the commissioner. At the very least, if the commissioner accepted this invitation, assuming that the royal commission would be over, then I think it shows an error of judgement on his part and an explanation is warranted.

In my view, if you are a royal commissioner on something as contentious as this, then for the rest of your life you should not even be thinking about attending any political event or any party fundraiser. It is interesting to note what some commentators have said, such as Michael Stutchbury—the editor of The Financial Reviewyesterday on Insiders. He used to do music reviews for me when I was on the Editor many years ago at Adelaide university and is a fine music review writer. He raised issues about the nature of the interchange between the royal commissioner and the opposition leader. There are some reasonable commentators who are saying that that may have been seen to be somewhat too harsh and unnecessary in terms of the royal commissioner's intervention.

The royal commission has gathered evidence, some of which I find quite compelling, about allegations of corruption and about allegations of bullying and harassment. These matters also relate to serious allegations of misuse of funds, boycotts, threats and even corruption. These allegations, if true, are clearly unacceptable. And they raise the question of whether our existing legislative framework is strong enough to properly address these issues. We know the commercial building sector is a very substantial employer. I want a strong and vibrant building and construction industry in this country in the commercial sector as well as in the home-building sector. I want the workers in that industry to go to a safe working environment where occupational health and safety are of paramount consideration. I also want them to be well paid for the work that they do. If there are impediments, then they need to be dealt with in a way that people's rights are considered.

I want to make it very clear that union representatives I have worked with in the past and whom I am working with on current issues have always been strongly against the kind of action that this legislation aims to address. I think it is an interesting paradox that there is no suggestion that Michael O'Connor, the head of the CFMEU—someone with whom I have worked very closely on issues involving free trade, 457 visas and putting Australian jobs first—has been involved in these sorts of activities. If find him to be a person of great integrity.

I have also worked recently with Aaron Cartledge, the state secretary of the CFMEU in South Australia, who has been subject to some allegations. However, one issue that I have worked with him very constructively on is substance abuse on building sites, particularly the use of ice. He has shown a lot of leadership in relation to that, because he does not tolerate it and the impact that it can have on a work force and the safety of not only those who are abusing the substance but also others on building sites.

More recently, I have also worked with Mr Cartledge and met with a number of subcontractors in relation to the collapse of Tagara Builders—a complete mess that has left many people in the lurch. I have to give credit to Mr Cartledge for the work that he has done on that. We need a better approach to this in consultation with industry so that subbies—the subcontractors—who have been left in the lurch and face financial ruin have better forms of redress. I also wish to pay tribute to Senator Cameron's work in relation to this, and I hope that the inquiry will have a hearing in Adelaide sooner rather than later, because it would be incredibly welcome. We need a better approach to dealing with that.

Insofar as there are allegations of bullying, intimidation and corruption, they need to be dealt with. I do not subscribe to the view that unions are uniformly bad or that they have too much power. I do very strongly believe that they have responsibility and a duty of care to their members; in the environment that they work in, they do not cause unnecessary and needless disruption; and they should be subject to greater scrutiny in that regard.

I also believe that, as in any negotiation, there may be particular individuals or groups who act in their own interests who are rogue operators instead of acting in their members' broader interests. It is these people who I believe this legislation ought to be targeting. The question is: are the measures in these bills fair and proportionate to the issues that they are trying to address?

I have some concerns about limiting the control of a body such as the ABCC solely to the building and construction industry—and I do not want to verbal my friend and colleague Senator Madigan about what to do about corruption in other sectors where there are concerns in other workplaces. I acknowledge the argument, however, that this is where most of the concerns have arisen but I wonder whether this legislation should be so targeted at one sector. Surely, there are legitimate concerns in other sectors that could benefit from the oversight provisions in these bills.

A few months ago I supported, unambiguously, the need to give the fair work building inspectorate the coercive powers to call in witnesses just as the ACCC, ASIC and other key regulators have. Without those powers, you will not get in my view some witnesses coming forward. There has been intimidation in respect of that from the evidence that I have heard.

I note that my crossbench colleagues Senators Madigan and Lambie have expressed concern about the breadth of this legislation. I look forward to exploring these matters in more detail during the committee stage, if the bill is passed at the second reading stage—as I hope it will—because I think these are legitimate issues that need to be vented.

I also think it is important to clarify that I believe that some changes need to be made in this area. What I am hoping to have clarified by the government through this process is why the new ABCC has to be established and why the additional powers should simply rest with the Fair Work Building and Construction inspectorate or Fair Work more broadly. I will also be seeking assurances from the government in relation to maintaining the right of entry and other matters for union representatives in relation to legitimate workplace and safety issues. I do not want to see reasonable union behaviour curtailed and I want unions and businesses to have access to the tools they need to combat the serious issues that have come to light.

In relation to the issue of Boral, that is a matter still before the courts; however, I do not think it is improper to raise the fact that this has taken a long time for our legal system to deal with these issues. It raises issues about access to justice, which is a much broader issue in civil and all sorts of disputes in this country, but it has had a significant impact on one particular company. If the allegations are proven, then it raises issues as to whether there has been an abuse of power in that regard. I think that there must be a better way for the resolution of such disputes, and the difficulties in the gathering of evidence in this case raise issues about whether you need to have the sorts of mechanisms that have been raised in this legislation in some form to deal with disputes.

At the end of the day—and I emphasise this—I want there to be a strong building and construction industry in this country. Building and construction can provide a real antidote to the job losses we are expecting in manufacturing. Having people working in a safe, working environment on good incomes is absolutely fundamental. My concern is that there needs to be some reform to help facilitate that. The issue is: to what extent do you go in this legislation? I think it is worth having this bill go into committee for further negotiations in respect of this.

Eric Abetz (Tasmania, Liberal Party, Minister for Employment) Share this | Link to this | Hansard source

I thank honourable senators for their contribution to this debate. I also indicate that, in the event that the second reading is supported by honourable senators, I will be seeking to adjourn further debate—namely, the committee stage—for further discussions to take place.

Prior to the 2013 federal election, the coalition committed to re-establish the Australian Building and Construction Commission to restore the rule of law to a sector that is plagued by lawlessness, intimidation and thuggery. The government consulted widely seeking feedback on this important policy to identify issues which need to be addressed.

The construction industry is critical to a productive and prosperous Australia and is vital for jobs. It is the nation's third largest employer, with more than one million people employed by the 100,000-plus predominantly small and medium businesses. The sustainability and success of the construction sector are crucial to the Australian economy and to the Australian people.

The need to re-establish the ABCC is clear and evident. This industry, regrettably, stands apart from others in terms of its industrial unlawfulness. For far too long there has not been a meaningful consequence in the construction industry for doing the wrong thing. Who is then surprised that this has resulted in a culture where complying with the law is taken to be merely optional? Industrial laws and penalties in this industry are seen as no more serious than a parking ticket where the fine is paid, the cost charged to the client or union members and the offending conduct repeated again and again. Since 2005 the courts have imposed fines of over $6.1 million on CFMEU related unions and officials for proven breaches of the law, but even this has not been enough to deter those activities from continuing—remembering that these are breaches of laws that have passed through this chamber but are yet ignored. The Federal Court recently spoke of the CFMEU's 'outrageous disregard' for 'Australian industrial norms'. The court also cautioned that breaking the law should not be seen as 'nothing more than an affordable price of doing business'. Yet, because Labor and the Greens slashed the maximum penalties for industrial wrongdoing in this area by two-thirds, that has only promoted the CFMEU's business model of breaking the law.

Re-establishing the ABCC is about introducing a meaningful consequence for unlawful industrial conduct in the construction industry, whether by unions or employers. It is about bringing about a needed change in the culture. When there is an effective regulator enforcing laws with meaningful penalties, there will once again be a deterrent for breaking the law, and those who would previously have done the wrong thing, simply because they could, will think twice.

While the ABCC existed, the performance of the construction sector improved. The ABCC contributed to economic benefits for consumers, higher levels of productivity and fewer days lost to industrial action, and we saw an increase in respect for the rule of law across the country. This benefited all law-abiding workers, unions and employers and the taxpayer.

Labor abolished the ABCC in 2012 and replaced it with a significantly weakened regulator. Labor slashed its budget by $9 million each year, making it even more difficult for the independent regulator to do its job. What flowed from Labor abolishing the ABCC was entirely predictable. Almost immediately we saw the CFMEU shut down parts of the Melbourne CBD for days on end in defiance of Supreme Court orders. Who can forget seeing on the news footage of protesters yelling abuse and threatening workers trying to get to work—workers who were actually members of the CFMEU, by the way—or protesters attacking police horses? All this while, CFMEU officials actively promoted this ugliness.

I am amazed that certain Labor and Greens senators opposite sit in silence when faced with such conduct and do not immediately condemn such abhorrent and repeated unlawful and thuggish behaviour. If the Senate were faced with such unlawfulness in another part of society as has been seen in the construction industry, there would be an outcry, and rightly so, yet we have silence from those opposite in respect of the construction sector. There are currently 69 CFMEU representatives before the courts or the Fair Work Commission, and the courts have time and again commented that the CFMEU simply shows no contrition despite repeated penalties being imposed on it for its wrongdoing.

The current system is simply not effective. It was only on Friday last week that a Federal Court judge fined a CFMEU official for his contempt in ignoring the court's orders. The judge said:

The CFMEU has a significant history of non-compliance with the provisions of industrial legislation … I have remarked upon the fact that each of the individual respondents' conduct indicates that each—

with the exception of one individual—

simply did not care about complying with the entry provisions.

In that case, the court found that the CFMEU officials had threatened to go to war against the subcontractor if he did not employ a CFMEU official and put him on the payroll. This was last week in South Australia, not some historical reference to the former BLF. This was a decision of the Federal Court in Adelaide just three days ago.

It reminds me of an earlier case where a CFMEU official was found to have said to a contractor in Victoria:

Everything works on a bit for youse and a bit for us. Forget about the law, … right?

Another CFMEU official in Queensland was found to have told a group of contractors who had been prevented from working because of the union blockade:

You've all got a long time left in the industry, and we can influence your future jobs.

When one of the subcontractors asked, 'What are the consequences to my business if I bring my boys on site?' the union official replied:

You want to know what the consequences are? You would be committing industrial suicide.

I am sure senators from South Australia, Victoria and Queensland in particular would join me in condemning these examples of the disregard shown for the laws of this parliament in their home states.

Regrettably, these are not isolated incidents. They disclose a culture in the construction industry of wilful defiance. The list of examples continues. Only last week, there were allegations finally explored in the Royal Commission into Trade Union Governance and Corruption over the conduct of the CFMEU—listen to this—in siphoning off half of all employer EBA payments meant for a drug and alcohol facility straight into the CFMEU's own coffers.

In another example of the graft revealed in evidence, the CFMEU had skimmed $80,000 of a $100,000 donation by a construction company to a drug and alcohol facility. The CFMEU took an unauthorised 80 per cent donation for itself. Yet Labor and the Greens would say, 'Nothing to be seen here; move right along. We don't need to deal with this.' This conduct shows there are elements in the industry, particularly in the construction division of the CFMEU, that are more interested in exercising their power over overs and lining their own pockets. I would also say that I think employers have a huge responsibility here. But one suspects these payments are simply made to buy some industrial peace and whether the money gets used for drug and alcohol purposes is a secondary consideration.

I will move on to the point of safety. The act that established the former ABCC, the present bill and Labor's Fair Work Act have the same standard of safety in respect of stopping work over safety concerns. The proposed ABCC legislation uses the very same standard on safety that Labor put in its Fair Work Act and which currently applies in the construction industry. Incidentally, this is the exact same standard which was previously included in the former ABCC legislation. This bill does not contain any provisions that would prevent legitimate safety issues in the building industry from being raised and addressed by employees, unions or state and territory work, health and safety regulators. I also note that the bill retains the role of the Federal Safety Commissioner and the Australian government's building and construction industry work, health and safety accreditation scheme. The misrepresentations over this important issue should be seen for the shameless tactic it is; namely, to deflect and distract from their unlawful industrial conduct.

On the issue of the compulsory powers, I have made it clear many times in this place that they are similar to powers that Labor gave to the FWBC. And Senator Xenophon outlined that the powers that the ACCC, ASIC and APRA have are very similar, other than there are a lot more safeguards under this legislation.

A very important aspect of this legislation is that it will remove the absurd and unprincipled restriction on the current regulator to which no other Commonwealth regulator is subject. This is in fact without precedent. This restriction prevents the regulator from commencing or continuing legal proceedings if private industrial parties reach a 'settlement' in their own interest. This put private interests above the public interests. When this absurd restriction was forced through this place by Labor and the Greens even the Law Council of Australia condemned such a restriction on a public regulator. This private settlement arrangement is subject to abuse. It is the equivalent of the Fair Work Ombudsman being unable to prosecute an employer guilty of underpaying a worker because the worker and employer reached a confidential settlement which could be for a nominal sum of $1. This also has the perverse outcome that, once wrongdoers achieve what they set out to achieve through unlawful means, they have an added incentive to coerce parties into confidential settlements so the public regulator cannot prosecute.

We recently saw an example of how this absurd restriction played out in Queensland with respect to the nine-week strike at the Lady Cilento Children's Hospital site. Just before the judge handed down his decision on wrongdoing over the nine-week stoppage, the CFMEU and ETU entered a confidential settlement with the builder; meaning the FWBC was unable to take any action in the courts in respect of the nine weeks that were lost on that important public project. At the end of the day, the regulator was legally prevented from enforcing the law and the taxpayer was left to foot the bill. If such a restriction on enforcing the law in the public interest were imposed on the police, on the Fair Work Ombudsman or the ACCC, there would be an outcry from those opposite—and rightly so. Yet, when the favour is done for the benefit of the construction unions, which are significant donors to Labor and the Greens, there is simply shameful silence from those opposite.

Any objective observer can recognise that there is a particular problem in this industry; yet the ABCC was regrettably abolished before it could achieve a lasting change in culture in the industry. I recall at one time the construction union was crying for 'one law for all' in arguing for the abolition of the only regulator that was keeping it in check. When one considers the appalling rap sheet of the CFMEU and its litany of regular and repeated industrial contraventions, it is clear that the CFMEU has no credibility when it calls for the application of 'one law for all'. It ignores Supreme Court injunctions. It ignores orders of the Fair Work Commission. It thumbs its nose at the rule of law, which it says everybody should abide by. The FWBC reports that it now has more cases before the courts than ever before. As I said a moment ago, there are currently 69 representatives before the courts. More than 90 per cent of FWBC cases before the courts involve allegations of wrongdoing by the CFMEU. Is anyone surprised that the ABCC, which was effectively started to hold the CFMEU to account for breaking the law is opposed by the CFMEU?

There has been the suggestion that, as a solution, we should deregister the CFMEU. I would make three points. Firstly, when the Builders Labourers Federation was deregistered in the 1980s it was a Labor government, with the support of a responsible opposition, that passed the legislation. The fact is that the current Labor opposition and the Greens are so beholden to the CFMEU that they would not support such a measure. Secondly, the deregistration of the BLF did not solve the problem of the culture in the industry. Here we are again dealing with the BLF by a different name and once again facing endemic industrial unlawfulness in the industry. Former BLF tactics have simply migrated to the CFMEU—which leads me to my third and key point.

The purpose of the ABCC is to introduce into the industry the concept of respect for the rule of law. The ABCC will work to introduce a culture in which any party, whether an employer, employee or union, accepts that they must comply with the laws set by this parliament. Indeed, I am reminded that just last week Baulderstone, a major construction company, was fined for having demoted a worker where the only reason that could be proffered was that this worker had resigned from the CFMEU. This sort of cooperation behind the scenes between big unions and big employers needs to be weeded out, and I am delighted that Baulderstone was publicly shamed by this case and fined for so doing. This is why we need the ABCC.

The bill will also provide for a building code. This applies to employers, and only employers can be sanctioned for breaches of it. The code will mean employers can no longer just ignore wrongdoing on their sites because they do not want to get involved. Employers will no longer be able to ignore inefficient practices and cost blowouts because they know they can just pass the cost on to their client, who is often the taxpayer. The building code will require strict compliance with employment, safety and migration laws. Why shouldn't the taxpayer expect that projects funded with tax dollars are run efficiently, lawfully and safely? The new code will have a new and streamlined enforcement mechanism to allow the ABCC to efficiently impose sanctions on employers who breach the code. The code will introduce a real commercial consequence on employers for doing the wrong thing or for allowing laws to be broken on their sites.

There has been a concerted campaign of misinformation about the code—for example, the absurd suggestion that the code bans RDOs or time off over Christmas or Easter. Each of these claims is simply false. Why they are made beggars belief, but it indicates the paucity of argument against the proposal that is currently before the Senate. One only needs to ask: what are the true motivations for the misrepresentation and untruths that are propagated in opposition to the return of an effective regulator and an effective building code that will hold employers to account?

The problem of endemic industrial unlawfulness in this industry has been clearly established. No objective observer can argue that the construction industry is simply like any other; it has shown itself to stand apart from other industries. The current laws have proven not to be enough. What is proposed in this legislation is about changing culture so this industry becomes like every other—that is, one in which the law always applies rather than only when convenient. The Senate today has a clear choice before it: to either send a message to the construction industry that it must comply with the law like everyone else or turn a blind eye and endorse the construction industry's history of ignoring the laws of this parliament and engaging in intimidation and bullying.

The problems with this industry are obvious. The choice is clear. The consequences flowing from that choice will be evident soon enough. As this nation embarks upon its most ambitious infrastructure-funding project of over $50 billion, it is vital to ensure that the construction sector is brought to account to abide by the rule of law so that the $50 billion worth of money invested by the Australian taxpayer proves value for money and that these projects can come in on time and on budget. I commend the legislation to the Senate.