Bridget McKenzie (Victoria, National Party, Shadow Minister for Infrastructure, Transport and Regional Development) Share this | Link to this | Hansard source

I, and also on behalf of Senator Cash, move:

That the following matter be referred to the Rural and Regional Affairs and Transport References Committee for inquiry and report by 4 March 2025:

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

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

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

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

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

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

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

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

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

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

(j) any related matters.

Tonight, I rise to speak on a motion standing in both Senator Cash's and my name proposing a Senate inquiry by the Rural and Regional Affairs and Transport References Committee into the nature, extent and impacts of misconduct in procurement processes involving publicly funded infrastructure and housing projects across the country. At the outset, I would like to thank senators and stakeholders in the public who have expressed their support for this motion and particularly the intent behind it. As we have had a public debate and passed legislation here this week, indeed to put the CFMEU into administration—that process is underway—there are still significant and serious questions about the expenditure of the Australian Commonwealth taxpayer funds into publicly funded infrastructure projects across the country. I believe—and many senators in this place and community members right throughout the country believe—that a Senate inquiry is the appropriate place for this to be examined. We know that a Senate inquiry has the power to subpoena witnesses—we've done that before—to provide protection to witnesses and evidence and also to hear evidence in camera should that be required. I think those three protections that are peculiar and particular to the Senate standing committee process mean that examining this issue—the public expenditure of money in my own state and in other states—through this process is incredibly important.

There are many in this chamber who agree that more needs to be done to ensure that, when the period of the CFMEU administration ends, there has been an opportunity to establish an enduring change in the culture of the entire construction sector so that corruption and outlawed bikie gangs, bullying, coercion, sexism and intimidation cannot once again take root. It is of course dealing with the issues of the here and now. It is also appreciating and understanding that this particular sector in our economy lends itself to this type of behaviour, as it has in the past, when Bob Hawke deregistered the BLF to get rid of Norm Gallagher. We now have John Setka kicked out and the CFMEU put into administration because of the construction division. What we want to make sure is that the son of Setka is not able to once again rise within the construction division to actually bring building sites and the construction industry more generally into disrepute, as has occurred.

No-one who has expressed support for this motion wants to see a situation where the CFMEU returns to type within months or years of administration ending. This is an important opportunity for the Senate to investigate and make recommendations for stronger policies that will help keep down the cost of building our houses, multiresidential developments, roads, bridges and railways. We know that Australian families are paying more than they should to build new housing and accommodation. We know that Australian taxpayers are being slugged more than they should be to build major civil infrastructure projects, the roads and railways that we need to get people to school and to work; to connect with family; and to move our fresh produce from farm to port and to the dinner table and beyond.

There is significant evidence of misconduct in the procurement and delivery of infrastructure and housing projects by the CFMEU, as well as by those participants in the construction industry who are willing to collude with those elements within the CFMEU that the administration is proposed to solve. This type of behaviour is actually the behaviour that's driving up costs for projects, and it's understood the cost of CFMEU controlled construction projects is 30 per cent higher than for non-CFMEU projects. These higher costs are having a real and material impact on all Australians. They are contributing to the nation's declining economic growth and diminishing standards of living and to the fact that we still sadly have a zero at the front of productivity. They are driving up inflationary pressures, raising the cost of living for families and businesses, slowing our economic recovery and subjecting homeowners to higher mortgage repayments for longer than they need to be.

Higher construction costs are forcing Australians, especially those who live in rural, regional and peri-urban areas, our thriving outer suburbs, to drive on unsafe, potholed and degrading roads for longer than they should have to do, as road maintenance and upgrade projects are delayed year after year because of the behaviour that I have outlined. These costs are locking workers in our capital cities into gridlocked streets during morning and evening peak hours as they travel to and from their place of employment and home. Time spent in congestion results in increased fuel consumption and emissions and in less time at home with loved ones.

When it comes to housing, the higher cost of building apartments and the associated delays are threatening the very social fabric of our country. You do not have to go very far outside this place to know that housing is a real and present issue for Australians, renters in particular. If young Australians can't envisage a future pathway to owning their own home, and when we see working people living in tents or cars in capital cities because they can't find a place to live, the culture of a nation will change. It is therefore imperative that those of us in this parliament with the privilege of representing our communities take every opportunity we can to investigate and examine policy solutions to reduce the cost-of-living pressures on families and drive down the cost of construction. That is what this proposed inquiry seeks to achieve.

There is significant evidence to support the contention that it is much more expensive to deliver infrastructure and housing developments on CFMEU controlled projects. This is not some myth of the coalition's making. This is a substantiated fact. The Master Builders and industry who've been champions of getting the CFMEU into administration attest that the CFMEU forces up the cost of construction by 30 per cent. In April 2022, an EY analysis was done into the cost of abolishing the ABCC, which estimated the removal of that regulator could cost over $35 billion, due to a decline in construction output, by 2030. In addition, that report estimated Labor's policy to abolish the ABCC could result in a $47.5 billion reduction in economic activity. This was a direct result of higher costs and lower productivity from CFMEU activity acting as a handbrake on other sectors.

Under the Queensland Labor government, the state's sweetheart deal with the CFMEU, the standard best-practice industry conditions, is driving increased costs and reduced productivity. Queensland builders and developers have suggested that productivity on some CFMEU-controlled projects averages just three days a week. Queensland Economic Advocacy Solutions released an economic analysis of that impact on apartment construction prices in 2024, which highlights the challenges faced by builders in the state who want to provide the housing that so many families desperately need. The report compares the CFMEU Queensland EBA conditions with non-EBA conditions in the state and exposed a shameful reduction in working days and productivity.

Before factoring in public holidays, rostered days off and union disruptions, a non-union project could provide 312 working days per year to deliver the project, compared with 260 standard working days on a CFMEU-controlled project. That is over 50 working days fewer, nearly two-months difference in getting a project completed. That is one-third fewer working days to build the housing that Queenslanders need. As a result, this study found CFMEU-controlled apartment buildings take 50 per cent longer to build. Just when we're trying to get houses built, we have economic analysis that shows, on CFMEU-controlled projects, they take double the time to build, and there are numerous examples within this paper outlining those issues. So it's no wonder working families can't afford to buy a house in Brisbane.

Last Thursday, Minister Watt denied, on RN Breakfast with Patricia Karvelas, that any of this evidence actually existed. When PK asked the question about whether the CFMEU was actually responsible for inflating the cost of building housing, Minister Watt said:

I've had a bit of a look at this, Patricia, and I cannot find any evidence whatsoever to support that.

There's no evidence. However, that actually lacks complete credibility when you look at these reports.

We're seeing the impact of the CFMEU on the delivery of major infrastructure projects under the $120 billion Infrastructure Investment Program. With every budget, there are additional delays on infrastructure projects with funding re-profiled for future years beyond the forward estimates, as critical road and rail projects that Australians have been desperately waiting to be built in our congested suburbs and capital cities fall by the wayside. At the very same time this government is bringing in additional new arrivals into these crowded suburbs, the very projects that were slated for delivery are being pushed out because of the CFMEU's control on the contractual arrangements with state governments, and that is exactly what this inquiry seeks to examine.

In the May 2024 budget by the Albanese government, more than $2.1 billion worth of infrastructure investment was delayed beyond the forward estimates. That's just more projects delayed. These aren't just a delay of 12 months, just a year; these are delays cascading four years into the future. The budget showed that Labor expected to spend $1.6 billion less on infrastructure last year than they estimated just five months previously in MYEFO. The budget, again, showed that Labor will spend $906 million less on roads in 2024-25 than budgeted the previous year and $524 million less on rail infrastructure than previous budget. This is the impact of delays in project deliveries.

The Albanese government had to pay out to state governments an additional $10.1 billion in the last budget. Not an additional kilometre was built for that $10 billion of rail or road—not an additional bridge, not even a staircase. This was to state governments for cost blowouts on state-procured projects. This is an issue that is very much impacting the Commonwealth taxpayer's ability to service the country with road, rail and bridge projects that everyday Australians need, want and deserve. That's why the Senate should support setting up this inquiry and setting up an examination into anti-racketeering laws. These are laws within the United States, where organised crime operatives, shall we say, are not able to be part of registered organisations. We shouldn't have the ability for mafioso to be on building sites, working hand in glove with the criminal elements within the construction industry and besmirching the lot.

We know that tier 1 contractors, the very big end of town, have a lot to answer for. You cannot have a corrupt system without two parties agreeing to participate in silence, under the cover of darkness, to corrupt the system. They're not getting ripped off. CFMEU workers are working essentially three days a week on these projects. Tier 1 contractors are raking in billions of dollars from state and federal governments. When we say 'state and federal governments', that's the Australian taxpayer; mums and dads who are barely making their mortgage and rent repayments are forking out billions in additional funds to criminal elements in the CFMEU and tier 1 contractors. This Senate inquiry seeks to examine that issue and make serious and sensible recommendations around the procurement practices in public infrastructure funding. I urge the Senate to support it, and I seek leave to move an amendment to the motion.

Leave granted.

I move the amendment:

Omit "4 March 2025", substitute "28 November 2024".

For those who may not have seen it, the amendment brings the reporting date to the end of this year, to our last sitting week, rather than stretching it out to March.

Karen Grogan (SA, Australian Labor Party) Share this | Link to this | Hansard source

The government does not support this motion. This proposed inquiry is a political sideshow. It's what we've seen over the last two weeks of debate. While this government is taking decisive action to address the allegations of corruption and criminality within the construction division of the CFMEU, those opposite are just playing games and just using this for political pointscoring.

Union members and workers across this country deserve a strong, effective union movement, and workers in the construction industry, particularly as a dangerous and hard industry, need a strong and effective union in their corner. Government legislation will enable the minister to determine whether it is in the public interest to appoint an independent external administrator to the CFMEU construction division. The government has also referred allegations to the AFP and the Fair Work Ombudsman.

The government is committed to the highest standards of ethics, probity and integrity in procurement. We know the Supplier Code of Conduct commenced on 1 July 2024, setting a range of expectations regarding suppliers' ethical behaviour, governance and welfare of employees. We on this side of the chamber are making things better. We are improving this situation, and we are putting in place the measures required to ensure that those workers in the industry are well protected and that there is no ill behaviour or corruption.

As I said, the government will not be supporting this motion. Senator McKenzie's ideological battle against the union movement, and the stunts, is not something we are going to support.

Andrew Bragg (NSW, Liberal Party, Shadow Assistant Minister for Home Ownership) Share this | Link to this | Hansard source

I am very pleased to support this motion from Senator McKenzie and Senator Cash, this reference to this Rural and Regional Affairs and Transport References Committee. I hear other senators refer to this as a stunt. If you go through and look at some of the reporting of these matters in the past few months, they are anything but stunts. There are serious issues here that have been canvassed, serious issues where there has been a deliberate attempt to inflate construction costs on CFMEU projects. This is hurting people who want to buy an apartment. Particularly people who live in cities, their first house may well be an apartment, and the CFMEU tax of 30 per cent is going to make that Australian dream much more elusive.

We've also seen that there have been, through industrial disputes, certain exemptions given to CFMEU, Cbus and Cbus Property sites in Sydney. I'm making these statements in relation to the Endeavour Energy issues. Effectively, if you're a private developer you pay a 30 per cent CFMEU tax, but you get exempted from that if you are the CFMEU or its subsidiary bodies, the Cbus fund or the Cbus Property organisation. These are pretty insidious issues in relation to the inflation of construction costs. The Australian dream is based on the idea that a person on the average wage is able to afford a house. By inflating construction costs this is making the Australian dream further and further away for so many Australians, and it's a particularly callous government to indicate that it will vote against further inquiry into these matters when its housing policy overall has been a disaster.

You can work through all the various permutations of the policy. In fact, if you go back to the last federal election, which we had back in May 2022, and the Labor Party's launch, the centrepiece of that launch was a housing scheme called Help to Buy, which is the idea that the government comes in and buys 40 per cent of your home. These schemes have been tried at the state and territory level, and they are friendless. They are so friendless that some of the states, during this term of federal parliament, have abolished their help-to-buy or shared equity schemes. So this was the centrepiece of the federal Labor campaign launch from 2022, Help to Buy. We haven't seen the government bring it on for debate. We haven't seen the government bring it on for a vote. Therefore, we have to wonder whether they are serious about this idea that the government should own 40 per cent of your house.

I really wonder whether the Labor Party has changed much since the days of the Chifley government when it had ministers like John Dedman attempt to pillory members of the Liberal Party who were supporting private homeownership. Private homeownership went from the mid-fifties to the low seventies under the Menzies government, from 1949 to 1966, and I don't think it ever would have happened if there had been a continuation of postwar Labor government. I think the Labor Party generally has an antipathy towards private homeownership, and this Help to Buy scheme doesn't seem to be a policy it has any particular conviction about.

Then we go through the next policy, which was the Housing Australia Future Fund, which is a multibillion-dollar boondoggle scheme which is yet to build any houses but has spent millions of dollars remunerating its executive and its board. Of course, the Housing Australia Future Fund has ambitions. We see that it wants to work with Cbus and the CFMEU, and the Labor Party president, Mr Swan, who is also the chairman of the Cbus fund, has made statements indicating that the Cbus fund will commit $500 million of members' funds to work with the Housing Australia Future Fund. I may be wrong about this, but last time I looked Mr Swan was not the chief investment officer of Cbus. That may have changed, but I think he might be the president of the fund or the chair of the fund, and the last time I looked the chair of the fund didn't go round making investment judgements. A bizarre thing it may be, but I think it would be in the interest of the Labor movement as well as the economy that they take very seriously this proposal that we put forward to prevent the Cbus organisation doing business with the Housing Australia Future Fund. The conflicts and the risk of corruption and malfeasance are very serious.

Then we go to the housing target. The housing target is 1.2 million houses to be built in five years. We know, from Housing Australia's own projections, that the government will come in 250,000 or maybe 300,000 houses short of the 1.2 million. Then, bizarrely, we see the newly-minted housing minister, who is desperate to give all these sit-down interviews about how good Labor's policies are, recommit to these failed housing targets. I mean, if I was the new housing minister, I wouldn't be walking around telling everyone that we've got a 1.2 million housing target, which we know is 25 per cent short and is never going to be met. When the Commonwealth has so few levers when it comes to housing, why would you stick to something that you know is a failure? So the housing target, again, is a fail.

So far we've got Help to Buy. We haven't seen it anywhere near this parliament yet; we haven't seen any attempt to try and debate that or vote on it. The Housing Australia Future Fund has been legislated, but, I would say, is rife with governance and probity risks, particularly for the government. Maybe Mr Swan, if he wants to proceed in the roles of both the chief investment officer and the president of Cbus whilst being the president of Labor, may want to recuse himself from one of these roles; that could be a good idea. Then we get to the housing targets, which have been a complete flop.

The last policy that the Labor government have on housing is, I would say, easily the strangest policy of all. It is known as the 'Help to Buy tax-cut for foreign fund managers'. Having given up on average workers being able to buy a house of their own, Labor pursues the idea of an Americanisation, a corporatisation, of Australian housing, by seeking to cut taxes for BlackRock and Vanguard—and probably for Cbus as well—so that they can establish build-to-rent developments. The idea of build-to-rent developments is that these are perpetual renting facilities, which are owned by foreign fund managers and then leased out to Australians as if we were serfs. So not only does it give up on individual agency and individual homeownership aspiration; it locks in this Americanisation. We've now seen cities like Atlanta and Jacksonville in the US where 25 per cent of the rental stock is owned by BlackRock, Vanguard, Franklin Templeton—asset managers. This is the future that Labor wants. It's a bizarre future, but I think it is the future that you arrive at when you are surrounded by vested interests, when you are surrounded by a party which has become the party of organised capital—organised capital through big unions; organised capital through superannuation funds.

As to the build-to-rent policy, I note with great interest that the Greens, to their credit, agree that the build-to-rent agenda, where foreign fund managers own these properties, is very dangerous. They agree with us. This is not a good idea. It shows how far Labor have drifted from their original ambition to be a party of the worker; they are now a party of organised capital, completely beholden to big super funds and unions. In 2½ years, what have they done? They have worked through their laundry list of issues that are important to the rent-seekers and bloodsuckers that fund their campaigns and run their party organisation.

So, after having spent 2½ years on their failed Help to Buy scheme, failed housing targets, failed Housing Australia Future Fund and also this disgusting build-to-rent concept—this corporatisation and Americanisation of Australian housing—they now want to say, 'Well, we're going to vote against this motion that's going to look at corruption in the housing sector.' So thank you very much. Thank you for nothing, effectively.

All you've got to do is look at their published research to see that people under 40 are extremely frustrated. People under 40 feel that they will never own a house in Australia, and they want their government to do better. I think they'd want their government to do better and they'd expect that this government, now having done a reshuffle and changed the housing minister, would have some new ideas, but this government is clinging to these same four failed policies. We can only hope that the government has a process—that somewhere in the ministerial wing, somewhere on the blue carpet, someone's got a piece of paper and a pencil, and a phone that's not connected to the CFMEU, and they're trying to get some ideas from the private sector.

The benefit of them doing this inquiry is that it would be a report to this parliament and they could actually use it to formulate some ideas that they could take to the election—some new ideas, maybe. One of the ideas might be getting the CFMEU and Cbus to work with the Housing Australia Future Fund. That's a bad idea; they shouldn't do that. Tick! Maybe we could look at the inflated construction costs in apartment building, which all the builders and developers say is a major issue wherever the CFMEU is involved. Maybe they could look at the skills issue.

We all have stiff backs from time to time, and we all value yoga. We think that yoga is valuable if you have a sore back or just in general. It's good for your health, but right now the country is in great need of people who can build houses. Yoga teachers are very virtuous people, but we need more builders than we need yoga teachers right now. The reason we haven't had any more builders or tradespeople is that the CFMEU told the government, 'No, we don't want people who won't be members of our union, so don't let them in the country.' Instead, we have all these yoga teachers. They are very good people, but right now the need for us as a country that is going backwards on housing construction is for people who can build houses. Eight years ago we were building 230,000 houses, and this year we are building 160,000 houses. With a massive influx of over a million people since the election, even with the proposed cuts to permanent migration, the ratio of new migrants to housing is massively out of whack.

I think it's very shortsighted for this government to be voting against this inquiry, because this inquiry could be their only chance of getting some new ideas—having some public hearings, taking some submissions, listening to people who might give them some new policy ideas that aren't based around improving the financial position of the CFMEU, Cbus and other various associated union people. The other thing about this motion that I would like to say in closing is that the cost of construction is one thing, but it is also the cost of materials. If you talk to any builder, they will say that that is also an enormous issue, as is land banking. There are a number of things that the Commonwealth can do. We have limited levers in relation to housing, but we can make big improvements in relation to skills policy because we run the migration scheme. That is a Commonwealth lever as are the banking and superannuation laws. We make payments to the states, and we also run a large part of the taxes here.

So, as for the idea that the Commonwealth government is out of options, Labor have only canvassed four little policies, all of which have been failures. The idea that the Commonwealth can't do anything is also very dangerous thinking. It is true that for a good reason the states run the planning systems. I don't think anyone in this building would like to take over the planning systems, but there are many things that we in this building can do that would help young Australians get access to that Australian dream much faster. At this rate, this government has failed on housing. They've had 2½ years, and I would say that it has been the biggest failure out of all their policies, which is a very big call. But I would say that Labor has failed on housing.

We want the government to do better. We will put forward a very serious alternative at the election. If this motion is to be adopted by the Senate, we will also use this process to develop some more ideas of our own, because we understand the value and the virtue in inquiry. The Australian people would expect that a motion to examine misconduct in procurement processes in the critical industry of building and construction would be supported by this parliament, because this parliament has a duty to inquire and investigate into wrongdoing. That is the role of this Senate, and voting against these sorts of inquiries is a very bad precedent. So I encourage everyone in the Senate—particularly the crossbench, given that I have been quite generous in some of my remarks—that this is a very worthwhile endeavour and should be supported.

Maria Kovacic (NSW, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the reference of housing projects and programs in Australia to the Rural and Regional Affairs and Transport References Committee. Before I do that, I would like to thank my colleagues Senators McKenzie and Cash for bringing this very important motion to the Senate today as outlined also by Senator Bragg. It is important for a number of reasons but particularly as we have all watched with great shock and varying levels of surprise at the level of criminal conduct within the CFMEU. I think that has struck all of us here.

Quite rightly, the government has conceded to the opposition's amendments to the Fair Work (Registered Organisations) Amendment (Administration) Bill 2024 to put the union into administration and stamp out this criminal behaviour. That is absolutely the right thing to do, and I commend the government for doing that. But, if anything, the recent reports have demonstrated the critical need to ascertain how far this criminal activity has spread and if it has compromised the incredible amount of taxpayer funds that go into construction, housing and infrastructure projects across our country. That's why I'm glad that Senators McKenzie and Cash have brought forward this reference, because we absolutely need to get to the bottom of the issue and know whether taxpayer funds have been misused in this criminal behaviour, whether taxpayer funds have facilitated any criminal behaviour and how much trust the people of Australia can have in these significant projects and programs.

This motion gets to the heart of that problem. Clause (a) will assess the adequacy of the Commonwealth's regulatory framework in preventing and addressing corruption, bullying and standover and other intimidatory tactics in the building and construction industry. This is such an important issue to look into, particularly given the matter that we heard about of the young man who died recently. We need to ensure that young people, all people, on these sites are protected and that taxpayer funds are in no way associated with practices that cause harm.

Clause (b) will address any practices or arrangements that can discriminate or have the effect of discriminating against persons, classes of employees or subcontractors. This is particularly relevant given the practices of the CFMEU that we've learned of, whereby they target small businesses, suppliers and contractors on their sites—those that aren't unionised. People should have the right to choose whether they join a union. It should be okay to join a union or okay not to join a union. Your small business should not be crushed because you have chosen not to join a union or your workers have chosen not to join a union.

Clause (c) will look at any connections between the CFMEU and the decline productivity and the escalating costs of infrastructure in Australia, including housing, which was clearly outlined by my colleague Senator Bragg. This is particularly important given the skyrocketing costs of doing business that we have seen over the last couple of years and, unfortunately, the homegrown inflationary crisis under this government. There is no doubt in my mind that the actions of the CFMEU have contributed to declining productivity and increasing costs of building, and we must have a serious inquiry to establish this. We need to understand how deeply the consequences of their bullying and intimidating practices on Australian worksites have impacted not only our housing crisis but our rental crisis and how that spreads out into the broader cost-of-living crisis.

Clause (d) will look at the impact of misconduct on construction businesses, suppliers and skill shortages. We need to know whether these horrible stories that we've heard are widespread and whether they contribute to us having fewer construction workers, fewer young people choosing to join trades, fewer young people choosing to participate in building Australia's future because it's just not worth the headache, just not worth the drama and just not worth the bullying.

Clause (e) will look at the budgetary impact of the skyrocketing costs for and delivery pressures on government programs, and, given the billions of dollars of taxpayer funds being spent on these programs, we must understand the impacts of the CFMEU actions. Clause (f) will look at the adequacy of Commonwealth oversight for state and territory programs that receive federal funding. That's an important issue that we need to address. Clause (g) will look at the best-practice models for infrastructure investment and procurement globally so we know what is best practice and so we know what others are doing and what's working, because clearly what we're doing here is not working.

Clause (h) will importantly look at the role of Indigenous businesses and at how to improve their role in infrastructure projects, and clause (i) will look at the need for antiracketeering laws in Australia and any other related matters.

This inquiry is necessary to investigate procurement practices and the delivery of major infrastructure and residential housing projects that there is absolutely no doubt we are in dire need of. Anything that is putting a brake on the supply of housing in our country needs to be addressed urgently, and Australian taxpayers deserve to get the best value for money from our public expenditure. Again, I commend Senators McKenzie and Cash for putting this forward, and I look forward to the inquiry.

Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

Here we are again, with this Labor government refusing to back a very sensible inquiry into the impacts of a union that they have now admitted has been completely out of control. There was absolutely no reason to put through the legislation that we put through this place this week unless the government had conceded that the CFMEU was completely out of control. Yet, apparently, it's all contained now. Yet, if you go back a few months—Senator Scarr, you'll remember this very clearly—what was the then minister's and the current minister's position on the CFMEU? It was that there was nothing to see there.

Paul Scarr (Queensland, Liberal Party, Shadow Assistant Minister for Multicultural Engagement) Share this | Link to this | Hansard source

Nothing to see here—all good.

Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

There was nothing to see there. In fact, they've been saying that for decades.

We've been around this place long enough to remember estimates after estimates after estimates, when we were lucky enough to be on the government benches, where the current minister was the mouthpiece of the union movement, particularly of the CFMEU, in attacking the then minister and attacking Minister Cash for her 'gross misrepresentation of the CFMEU'—for just talking about the fact that they had been taken to court umpteen times, they had been fined X million dollars and a number of officials had faced jail time, if not other, lesser penalties, for their bullying behaviour, their threatening behaviour, their overt misogyny and their anticompetitive practices. This minister, when he wasn't a minister, was there defending the indefensible, attacking a government for putting in place sensible controls on an industry that everybody knew had problems. Literally everybody in the industry knew it, and everybody not in the industry knew it.

For the minister to then go on ABC Radio National and deny that those severe problems, which triggered this Labor government putting through legislation to put the CFMEU into administration, haven't forced up costs on the building and infrastructure sector—this is what he said under questioning from Patricia Karvelas:

I've had a bit of a look at this, Patricia, and I cannot find any evidence whatsoever to support that

But it doesn't take much work, Minister, to find evidence to support it. If there is threatening behaviour, if there are kickbacks being paid and if there is extortion going on, then just common sense alone will tell you that that sort of behaviour is going to force up costs in an industry. But there's plenty of evidence, going back over a long period of time, to show that CFMEU controlled construction projects cost more.

In the minister's home state of Queensland, the cost of building apartments on CFMEU controlled projects is 33 per cent more expensive. The economic analysis of the impact of the CFMEU Queensland EBA on Queensland apartment construction prices in 2024 found that CFMEU controlled apartment buildings took 50 per cent longer to build and cost, for an average two-bedroom apartment, almost $300,000 more to build.

It's almost unbelievable that the minister can't find this information. Apparently, there's no information about how these projects under the CFMEU are more expensive to build. The Master Builders in the industry gave evidence previously that the CFMEU forces up cost of construction by 30 per cent. Ernst & Young estimated that the abolition of the ABCC, which this government did, would result in a $35.4 billion decline in construction output by 2030 and $47½ billion reduction in economic activity, as higher costs and lower productivity act as a handbrake on other sectors. And it goes on and on.

I know I have colleagues who want to speak, so I'm not going to continue for long. But the fact is the evidence is legion and the evidence is ample. The evidence of the criminality, the kickbacks, the poor behaviour, the violence, the thuggery—it's there for all to see. It's on the court records, and anyone who denies it is quite frankly either ignorant or a fool.

This place shouldn't allow behaviour like this to go unremarked and uninvestigated—that is our job. It's our job to make sure, where we see things happening in our society that just aren't right, that we do something about them, and that's why this inquiry should go ahead.

Paul Scarr (Queensland, Liberal Party, Shadow Assistant Minister for Multicultural Engagement) Share this | Link to this | Hansard source

Well, what a disgraceful state of affairs we find ourselves in as a country—with the cost of construction in this country going through the roof and an inability to provide key infrastructure to provide new dwellings at an affordable price to the Australian people, especially to young Australians. What a disgraceful state of affairs we find ourselves in. The CFMEU's construction division is a big part and parcel of that.

There was an article written by David Marin-Guzman in the Australian Financial Review on 10 July 2024, which makes for absolutely horrifying reading. The average cost to build a three-bedroom apartment in Queensland is now $1.5 million. That's half a million dollars per bedroom to build a three-bedroom apartment in Queensland. So it's no surprise that, in the middle of a housing supply crisis, we have very poor levels of construction proceeding in terms of apartment building in Queensland at the moment. The supply is depressed. We need more supply, but the construction costs, particularly the costs arising from the CFMEU's construction division requirements, are leading to prohibitive costs, so developers can't actually make it work. You can't make construction of a three-bedroom apartment work at a cost of $1.5 million.

An example is that, in a two-bedroom social housing project in Townsville, it ended up priced at $830,000 to build a two-bedroom dwelling. That doesn't include the price of the land; that's just to build the dwelling. They're two-bedroom dwellings priced at $830,000, which is 30 to 40 per cent more than expected. That's outrageous. This is in a situation where Queensland must build 49,000 homes a year, of which at least a third will need to be apartments, in order to contribute our fair share to the country's target of 1.2 million new homes in five years.

What else are we finding in terms of the CFMEU's requirements? A union veto on concrete pours. Why does the union need a veto on concrete pours? Well, we know why—because they use it as a means of intimidation on construction sites all across Australia. I've spoken to construction companies and executives who've had the CFMEU delegates on the site step in and prevent the concrete pour, sometimes mid-pour. They just don't give a damn for the consequence on the broader Australian public. It's all about power.

The average productivity on Queensland construction sites—we're down to, at most, three days a week. That extends project times which extends costs which means fewer apartments being built. According to Urbis apartment essentials report, new apartment projects in inner Brisbane slowed to fewer than 2,000 apartments a year between 2020 and 2023. There were 2,000 apartments a year because the developers couldn't afford to build them because of the CFMEU construction division. That's the situation we now find ourselves in. It's an absolute disgrace.

For a 25-floor apartment build, the imposition of the CFMEU construction conditions in a Queensland context adds an extra 43 weeks. It's takes nearly a year to build a 25-floor apartment building. It's absolutely unbelievable. How did we get to this situation? Every day I drive to my office in Springfield, which is in the south-west corridor of Queensland, and the traffic coming the opposite way is a traffic jam; it's a parking lot. That south-west corridor in Queensland, replete with first home buyers, does not have the transport infrastructure it needs. It doesn't have the rail. It doesn't have the roads. It doesn't have the bridges. It doesn't have the transport infrastructure to support the growth. Why? Because the cost of building anything in Queensland is 30 or 40 per cent more than it should be.

When it comes to budget time, those opposite talk about re-profiling infrastructure projects, which means delaying infrastructure projects, infrastructure projects which the people of Queensland desperately need. In all the time before the last few weeks all we heard from those opposite were excuses about the CFMEU. In fact, I can remember Senator Sheldon debating the issue, saying: 'It's just flags. The CFMEU. It's just flags. Why shouldn't they be able to fly their flags on construction sites? Why are you people getting all upset about it?' No, it's more than flags. It's bullying. It's intimidation. It's victimisation. It's corruption. It's a union which puts its own interests and the interests of the leadership of that union above the interests of the Australian public, and those sitting on the government benches have been complicit in that, not just during our term in government but during their own term in government, until, politically, they could no longer, until, politically, it wasn't sustainable for them to continue to support the construction division of the CFMEU.

I'm looking at these terms of reference and I'm wondering how anyone of good faith could actually vote against these terms of reference when you consider the infrastructure demands upon this country. How could anyone in good faith vote against these terms of reference? It includes:

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

Given the evidence we've heard, how could we not have this inquiry? It also include:

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

Again, given the evidence we have heard in terms of the intimidatory tactics of the CFMEU, how can anyone reasonably argue against that term of reference? It also includes:

(c) connections between the Construction, Forestry and Maritime Employees Union, declining productivity—

I've spoken about declining productivity. It costs $1.7 million to build a three-bedroom apartment in my home state of Queensland. It is outrageous—

and the escalating costs of infrastructure in Australia, including housing;

(d) the impact of misconduct on construction businesses, suppliers and skills shortages …

Who would want to work on a construction site being stood over by CFMEU delegates and their associates? No-one in their right mind. It continues:

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

Again, we've heard from those opposite. In their budgets, they talk about re-profiling infrastructure projects. Infrastructure projects, which are desperately needed by the Australian people, need to be 're-profiled'. It is because we can't afford them! We can't afford them. Why can't we afford them? Because of the 30 to 40 per cent CFMEU premium on top of those projects. It continues:

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

So how do we keep the states honest? In my home state of Queensland, the Miles Labor government has just been disgraceful. They've just completely sold out. They completely sold out to the CFMEU—absolutely shameless. It continues:

(g) examples of best practice infrastructure procurement processes around the world …

Isn't that what we should be doing here—considering other practices and other jurisdictions and working out how we can apply the lessons from abroad in an Australian context? It continues:

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

Again, surely, that should be something we aspire to. And:

(i) the need for anti-racketeering laws in Australia …

and that's what it has come to in Australia. We have to look at anti-racketeering laws because of the conduct of the CFMEU in Australia. That's the position we've been put in—absolutely disgraceful.

I'm not sure how anyone could, reasonably, read those terms of reference in the context of what we've heard over the last month or so, and indeed what we've heard for years in relation to the CFMEU's construction division's conduct, and construct an argument as to why that reference should not be approved. I don't think there's any bona fide reason. The only reason is politics—people don't want this to be the subject of inquiry by a Senate committee, because they don't like the fact that it highlights the chronic issues we have in the construction industry and how that impacts upon the ability of governments at all levels to deliver the infrastructure which Australians need. That's the only reason—people don't want us to talk about the issue. That's the only reason. I say to the senators in this place: that is their choice; they can vote against the terms of reference. But I have not heard one reasonable argument during the course of this debate as to why you would vote against an inquiry into these important matters, especially when the cost of infrastructure and the cost of construction in this country is debilitating. It's hurting. It's hurting those who aspire to become homeowners, and it's hurting all Australians in terms of having the benefit of the infrastructure all Australians need and all Australians deserve in our country.

So I ask those opposite to reflect upon this issue. I ask them to deeply reflect on this issue, because it's not good enough. We are a house of review. We are a house of inquiry. This is our job. I've certainly chaired inquiries which have been referred to the Legal and Constitutional Affairs Committee which weren't necessarily references that I composed, but I always respected the right of senators in this place to refer matters for inquiry. I have a firm view that, if there are a substantial or material number of senators in this place who believe a matter should be referred to an inquiry, it should be referred to an inquiry. We should have that inquiry. What do you have to fear? The truth? The evidence? What do you have to fear from an inquiry? That's the other question. What do they have to fear from an inquiry?

I should also add in this respect that nearly every single infrastructure project in my home state of Queensland over the last 10 or 15 years, whether it's the Bruce Highway, the M1 Motorway down the Gold Coast, the construction of a new university building like the QUT campus at Kelvin Grove—even the construction of Ronald McDonald House; can you believe that—has been impacted by the lawlessness of the CFMEU. This has gone on for years, and now we're seeing the culmination of it. It costs an extra $287,199 to build a two-bedroom apartment, increasing the build cost from $869,687 up to $1.156 million—unbelievable! This is economic analysis of the impact of the CFMEU Queensland EBA on Queensland apartment construction prices for 2024—the latest evidence. This is impacting all those Australians who aspire to homeownership. This is a matter which the Senate should be enquiring very deeply into. I call upon those opposite to reflect on their position in relation to this important matter.

Matt O'Sullivan (WA, Liberal Party) Share this | Link to this | Hansard source

I agree wholeheartedly with Senator Scarr. When you look at the terms of reference, how could any senator here in this place not support them? They are very straightforward. As Senator Scarr was saying, what is there to fear? That we will get evidence that might actually provide the advice we need, the substance we need, as a parliament, as a chamber, to make changes and recommendations to the framework that oversees registered organisations in this country? The government have already said they won't support this simple reference. They've said that this is just a bit of a stunt, or just a bit of a witch-hunt. What have they got to fear? What have they got to worry about? We've been talking for the last couple of weeks about the undue interference of particularly the CFMEU in workplaces across this country, and on construction sites in particular. We know it's having a profound impact on the ability of the private and public sector to deliver on projects that are essential, whether it be building a private home, a residential complex, a unit complex or public infrastructure that's necessary for the productivity of this nation. We are going backwards.

I commend Senator Cash and Senator McKenzie for bringing this important reference before this place. It would go to the Rural and Regional Affairs and Transport References Committee, and I know they would do a thoroughly decent job at looking at this issue and reporting back by the end of this year with recommendations on how, once and for all, we can fix the problems that occur in workplaces and on construction sites right across this country. Senator Scarr and others before him in their contributions took us through the terms of reference this inquiry will look at. Again, it is very straightforward and ought to be supported.

The coalition want to see this happen because we want to get construction moving in this country. It has become terribly expensive. We are seeing cost overruns right across the board.

In this year's budget that the Treasurer laid down, which has come through this place through appropriations, there is a figure of over $10 billion to deal with the cost overruns of infrastructure projects across this country. In my home state, I am particularly familiar with the Metronet's railroad out to Ellenbrook, which is way overdue. There are some dubious figures around not necessarily the necessity of it but the patronage of it. Some quite exuberant assumptions were made about the number of people that will use at. But anyway, I look forward to that project finally being completed. I know those who do use it will get a lot of benefit from it. But it will be delivered late and with significantly overrun costs. The new railway line that has been extended up north through to Yanchep, again, ran over time, ran over budget. We know that union interference on these projects is contributing to those costs overruns and to the length of time it takes to deliver them.

You do not need to be an economic genius to know that if the government is having to spend more, having to borrow more, it is therefore having to put more money into the economy, which is of course having an inflationary impact. Inflation has been out of control under this government, and the Reserve Bank governor has said that the problem is homegrown. The Reserve Bank governor has pointed to the fact that government spending is contributing to the inflationary pressures that we are seeing within the economy. As a result, interest rates have been high and they could stay higher for quite some time, which is impacting upon every Australian's budget. Whether they are building a home, they have already got one or they're renting a home, it is impacting upon every Australian. This government is not doing enough to address the cost-of-living crisis and not doing enough to address the increasing inflation.

Because of interference on workplaces by the CFMEU, again, we have seen kickbacks. Thankfully, we will have an administrator to oversee that particular union. But come on, it is not the only registered organisation that we have heard about. There are claims that on the wharfs money has been handed around, that there is corruption involved. If you want to see your ship moved by a certain time, meet the deadline then pay—and it gets paid. These are the accusations made and it would be good to get evidence around this stuff.

What are you afraid of? If the evidence is not there then you have nothing to worry about. But if it is there then let's deal with it. It is very simple. We must look at this. This is an important issue because it is not only costing Australians, as Senator Scarr was saying, the actual purchasers of residential and commercial properties, and construction projects, but also impacting upon every Australian because they are having to pay higher taxes and their tax money is going into increased costs. As I said, that is increasing inflationary pressure, which then we all pay for, whether it is at the check-out or it is on energy bills, whatever it is. Every Australian is paying and it cannot continue.

This Senate inquiry is important because it has the capacity to compel witnesses to attend. It can also receive evidence confidentially, in camera. We know there are a lot of people, particularly construction businesses and workers on construction sites, who are extremely nervous and afraid of the evidence that they might be able to bring. Of course, a Senate committee has the capacity to receive evidence confidentially, in camera. That is the power of a Senate committee. We have the power to provide witnesses the protection of parliamentary privilege—another protection that would be necessary, particularly for those whistleblowers that we could encourage to bring forward evidence. There will be protection for them through this committee. We should be doing this. There is no reason for us not to. Why would we not do this? It is unbelievable.

We know that this government has been addicted to the donations that come from their union friends. They're all from unions. I don't know if there's anybody on that side that doesn't have a union background. That's okay, but they're one-tracked in their thinking. There's not enough variation or diversity of experience, and they are such defenders of every union. Now, there are some fantastic unions. My wife is a nurse in Western Australia. There is the nurses federation over there; she's no longer a member because she's no longer practising as a nurse, but she still works in the health sector. For years, there was great support that came. Insurance was provided through the union.

Unions have an important role. I'm not dismissing the role and the importance of unions, but we know that this Labor government is addicted to the donations and the funding that come through from these unions. More than that, their salaries are dependent on their support of the unions, because they control their preselection. If you want to be a cabinet minister, you have to be part of the right faction and the right union. That's how it works on that side. We don't see the meritocracy that ought to be there. There are some very good people that miss out—I see it. Some very good people aren't given the opportunities because they're not supported by the right union. It's insidious. It goes right through that organisation. They're getting a little agitated over there—I can hear that. I take those interjections. It's touching a sore point. Your preselections are determined by these unions. That's why they get touchy about this, because it determines how long a career they will have in this place.

What we need to see is some light shone over this. How do you disinfect it? You put light onto it, and that's what is needed. There's an infectious disease on that side. They are absolutely addicted to the donations and the control of the unions. What we need to see is some light shed on it so we can disinfect what is going on. There is toxic involvement in construction workplaces and on construction sites across this country that is impacting on the delivery of projects. We have some roads in Western Australia that urgently need repair. In the south-west is Margaret River—a magnificent place. Go down there. If you want to have one of the best holidays, head down there. But, unfortunately, you're driving on roads where there have been roadworks going on for literally over five years now. There have been design challenges and some other things, but we know there have been major cost overruns—again due to the undue influence of the unions, with the lower productivity, the slowing up of projects and the paper cups that have to be dealt with before the project can continue and the concrete can be poured. We know that this is going on. We hear it all the time. So let's have a look at it through an inquiry that will shed some light and make some recommendations as to how we can make improvements in this place.

One of the first things we saw this government do was abolish the Australian Building and Construction Commission. Among a litany of things, this is one of the major things that they should be hanging their heads in shame over. It was the fair cop on the beat that was necessary to provide for the proper running of these unions. The CFMEU needed a special focus. They needed a special regulator. The Fair Work Commission has a broad remit, it has the entire economy of workplaces to look after. The CFMEU—because of the corruption, because of the thuggery, because of the poor behaviour that we've seen across the country for so many years—needed that special regulator, and it has been taken away.

Debate interrupted.