Allegra Spender (Wentworth, Independent) | Hansard source

The Workplace Relations Legislation Amendment (Building Cooperative Workplaces No. 1) Bill 2026 makes several changes to the Fair Work Act and related legislation. Most I support; one I specifically do not.

This bill ensures road transport contractors can access workplace protections through a new industry-specific high-income threshold that reflects their actual cost structure. It fixes a practical impossibility in the CFMEU's administrator reporting requirements. And, significantly, it enables the Fair Work Commission to manage a case load that has grown by 70 per cent in three years. The commission's president, Justice Hatcher, has said publicly that this surge is principally driven by the use of AI tools by potential litigants. Research presented at Senate estimates in June this year found that 40 to 50 per cent of applicants reported using AI to prepare their applications. Paid agents lodging speculative claims are compounding the problem.

The bill responds by reversing the Federal Court's decision in Coles Supply Chain Pty Ltd v Milford, which required the commission to hold a formal hearing on whether a dismissal actually occurred before it could even begin conciliation. That procedural requirement turned many matters into two hearings instead of one. The bill also expands powers to dismiss frivolous and vexatious applications, creates a vexatious litigant order, allows matters to be determined on the papers with the parties consent and permits greater delegation of procedural functions to commission staff. These are sensible reforms and I support them.

But within these practical measures is something that has nothing to do with practicality and everything to do with industrial politics and is one that I reject. Part 9 creates new exceptions for the Fair Work Act's prohibitions on discrimination. It gives the Commonwealth a legal basis to favour one business over another—not because of their capability, not because of compliance, not because of price but because of the industrial instrument that covers its workforce. A business with a union covered enterprise agreement could be preferred over an identical competitor that pays the same wages and meets every legal obligation but whose agreement does not name a union or that relies on an award, as most small businesses do because the industrial relations system, the awards and the EBAs are so complicated that it is extremely difficult for smaller businesses to negotiate EBAs.

The powers are broad. They flow into Commonwealth linked supply chains. The minister can determine, by legislative instrument, additional contractual arrangements that fall within the exception. The explanatory memorandum gives no guidance on scope. The secure Australian jobs code is still in development. The practical reach of this measure is entirely uncertain and will sit well beyond the ongoing oversight of parliament.

Now, I support genuine enterprise bargaining. I wish it was actually easier for companies and unions and workers to come up with agreements that benefit them both, and I continue to urge, as I have since the day I was elected, the government to help people simplify the awards because that would make it easier for people to come up with enterprise bargaining agreements that are genuinely beneficial to all parties and that would genuinely actually improve the lives of workers. But what I oppose is a government using its growing economic footprint to compel a particular industrial model without adequate safeguards against corruption that has already been documented in this system, and in a way that is going to make it harder for smaller businesses and newer businesses to potentially access government contracts. I reject that completely.

The contradiction is striking. On 1 May this year, five weeks before the bill was introduced, the minister stated:

The government has no intention of requiring employers to enter an enterprise agreement covered by a registered employee organisation as a condition of receiving Commonwealth government funding in the construction industry.

And:

… has no intention of replicating Queensland's former Best Practice Industry Conditions Scheme.

Five weeks later, we've got this legislation and it gives the government exactly this power. The government will say: 'Well, we don't have to require it. This is not a requirement; it just is a consideration.' Just think of how this is going to play out. If this is something that could be positively taken into account, what do you think businesses will think they need to do? They will obviously think, 'Oh, well, if some organisations will get preferenced if they have an EBA or the government can preference them because they have an EBA versus others, well then I need to enter an EBA.' What do you think unions will do? They will say, 'We need to have EBAs.' Again, I support this, but you might as well say that you require it, because, if this power that the government is intent on creating is used, that will be the difference that it makes.

Let's put this in an economic context. Productivity is flatlining. Businesses are facing compounding pressures—inflation, regulatory expansion, complexity in industrial relations—which this government has not addressed. Even when it would be beneficial to workers to simplify the awards, the government has failed to do so. The answer is not more government prescriptions attached to a growing share of government directed spending.

This concern is not hypothetical. The Watson report, Rotting from the top, examined the CFMEU in the Victorian construction industry. Watson found the enterprise agreement system had been thoroughly corrupted by what he called 'old-fashioned pay-to-play corruption'. There was no genuine bargaining. Agreements were awarded to friends of union officials and to known criminals in return for cash. Labour hire agreements were sold for up to $1 million. The CFMEU punished its enemies by refusing to issue agreements with no reason and no review. Watson found that the denial of an agreement could drive a decent contractor out of business.

Watson conservatively estimated that this corruption cost Victorian taxpayers $15 billion. A 15 per cent cost increase applied to the $100 billion big build. Fifteen billion dollars—that is what happens when enterprise agreements become commercial assets to be bought and sold, rather than genuine instruments of collective bargaining, and that is the system that this bill proposes to reward with preferential access to public money.

Commonwealth government spending for 2026-27 is $830 billion, which is 26.8 per cent of GDP. That is a record. Those billions are drawn from the taxes and borrowings of Australians, who expect it to be spent in their interests. Every dollar that doesn't go as far as it could is inflationary. In that environment, procurement cannot be filtered through an industrial relations test, and the Queensland experience shows where this leads. It's all very well for the minister to say, 'Well, we're not going to do this.' This is exactly the legislation that provides the environment in which the minister can do this.

The best-practice industry conditions scheme used procurement policy to embed preferred industrial conditions into government funded construction. That sounds very similar to what we're trying to do here. The Queensland Productivity Commission found that the BPIC likely reduced construction productivity, which fell by nine per cent over six years. The commission modelled that, if left in place till 2029-2030, it could have increased project costs by 10 to 25 per cent, reducing housing supply by up to 26,500 homes and imposing net community costs of $5.7 billion to $20.6 billion. The Queensland government itself acknowledged that BPIC contributed to delays and cost overruns. It was paused in November 2024 and then permanently abolished. This bill creates a similar risk at the Commonwealth level.

I have heard some of the people opposite argue for this bill on the basis that people should have secure jobs and that that is a positive thing. Now, I support secure jobs, but we have an economy and a lot of industrial relations legislation that enshrines a lot of secure jobs across the economy. The government doesn't need to enshrine secure jobs through its own procurement practices. It can employ its people how it wants. It has the overarching environment for the economy, but it doesn't need to add this legislation, and it doesn't need to exclude small businesses or make it harder for small businesses to access government contracts.

I genuinely say: if you've got a problem with secure jobs, show me in the economy where you want to make those jobs more secure, rather than using industrial relations instruments, because there is a real risk here of corruption. We have seen this play out. In saying, 'We're going to exclude the construction industry,' there is a real risk of corruption, and the government has not got the safeguards in place to make sure that this doesn't happen. To then provide this and say, 'We'll carve this bit out. It will be okay,' is naive and is not in the interest of the Australian taxpayer. The level of organised crime and issues related to the CFMEU is an enormous burden on the entire country. Government should be very, very cautious about going ahead with legislation that could add to corruption in the procurement of public services, and this is quite reckless.

Again, I support the elements of this bill that strengthen the Fair Work Commission, protect road transport contractors and fix the CFMEU reporting requirements; those reforms are practical and proportionate. But I cannot support legislation that creates the legal framework to preference union interests in the allocation of public money—not when documented corruption has turned parts of the enterprise agreement system into a vehicle for organised crime; not when the government said, five weeks before introducing this bill, that they didn't have any intention of doing what this bill empowers—or allows them, at least—to do; and not when one jurisdiction that tried a comparable scheme found it destroyed productivity, inflated costs and reduced housing supply.

Incentives matter. When access to public money depends on having the right enterprise agreement, you create the conditions for the very corruption Watson documented: agreements as currency, access as leverage and corruption as the cost of doing business. At the same time, you exclude those businesses who, because of the labyrinthine complexity of the EBAs and the award system which the government has failed miserably to deal with, find it much harder to develop EBAs. So I will not support that, and the public of Australia deserves better.

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