House debates

Thursday, 4 February 2016


Building and Construction Industry (Improving Productivity) Bill 2013 [No. 2], Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013 [No. 2]; Second Reading

9:54 am

Photo of Rob MitchellRob Mitchell (McEwen, Australian Labor Party) Share this | | Hansard source

If it suits the House, I will state the question in the form that the amendment be agreed to. The question now is that the amendment be agreed to.

Photo of Russell MathesonRussell Matheson (Macarthur, Liberal Party) Share this | | Hansard source

The building and construction industry employs more than a million people, representing approximately nine per cent of the Australian workforce. It is a critical part of the fabric that makes this country productive, prosperous and internationally competitive. The people of Macarthur understand the importance of the building and construction sector to the economy. They know that cost blowouts and project delays as a result of industrial bullying cost time and money, which ultimately costs us all.

I stand here today, proud to be part of a coalition government which recognises the importance of an industry that is vital to job creation and essential to Australia's economy. I believe the Building and Construction Industry (Improving Productivity) Bill 2013 [No. 2] is a positive step forward. It encourages productivity and high levels of employment in the building and construction industry. It will ensure that the government's policy to deliver the infrastructure of the 21st century is delivered. In my electorate alone, this bill will protect jobs and investment by ensuring thousands of employers and workers in the industry can get on with the job without fear of intimidation.

One of the most crucial parts of this bill is the regulation to uphold and promote respect for the law to ensure respect for the rights of everyone in the building industry. It contains provisions to ensure that unlawful actions, including unlawful industrial actions, are dealt with appropriately. It also ensures the ability for the courts to impose significant penalties for individuals and organisations that participate in this unlawful action.

The Australian Building and Construction Commission was a strong and productive watchdog. It was established by the coalition in 2005 following the 2002 Royal Commission into the Building and Construction Industry. The royal commission found that the building and construction industry was characterised by widespread disregard for the law. It catalogued over 100 types of unlawful and inappropriate conduct. This included illegal strikes, pattern bargaining, right of entry infringements and the coercion of non-unionised subcontractors. The royal commission also found that existing regulatory bodies had insufficient powers and resources to enforce the law. This is why one of its recommendations was to establish a specialist and permanent regulatory body to look into this conduct.

It was the Howard government that established the ABCC in 2005 and the commission was instrumental in curbing illegal industrial action and lawlessness in the construction industry. It took a strong stand against union thuggery in the industry by keeping disputes to a minimum. The ABCC helped to increase productivity and lower construction costs around Australia. While the ABCC existed between 2005 and 2012, the performance of the construction sector improved. These benefits flowed through to our economy and on to all Australians. During its previous period of operation, the ABCC contributed positively to economic benefits for consumers, increased levels of productivity, fewer days lost to industrial action and an increased respect for the rule of law across the industry. This created flow-on effects to all law-abiding workers, employers and unions. Since its inception in 2005 the ABCC helped the industry to increase productivity by 10 per cent. It provided an annual economic welfare gain of $5.5 billion per year, reduced inflation by 1.2 per cent and increased GDP by 1.5 per cent. Put simply, the commission was doing its job. The number of working days lost annually per 1,000 employees in the construction industry fell from 224 in 2004 down to 24 in 2006. At the same time, building costs fell by 20 to 25 per cent and long project delays were dramatically reduced.

Before the abolishment of the commission in 2012, a submission made by the Housing Industry Association stated that the commission has been doing 'a sound and effective job of law enforcement, clamping down on unions and others for illegal industrial behaviour and right of entry breaches'. This was keeping the unions in check. It went on to say: 'However its work is far from finished. Aggressive and unlawful industrial action persists as an area of concern for the industry.' It is clear that work still needed to be done and, before it was abolished, the ABCC was doing the work independently and effectively. Unfortunately, the type of conduct that the royal commission identified back in 2002 cannot be easily reversed. It is the type of conduct that needs targeted resources to effect lasting cultural change. Whilst the ABCC succeeded in improving conduct, the culture of lawlessness identified by the royal commission had only been suppressed. Sadly, it still exists.

In its submission, HIA told us that it did not believe that Labor's legislation to abolish the ABCC would continue to deliver the strong, independent and robust enforcement body that the building industry required. It also said that 'a watering down' of the existing powers would result in a return to the industrial lawlessness identified by the royal commission. The writing was on the wall. While the ABCC existed, the economic and industrial performance of the building and construction industry significantly improved. A 2013 Independent Economics report on the state of the sector during this period found that 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.

So why was a commission that was 'doing a sound and effective job' abolished? It was because the former Labor government came under sustained pressure from building and construction unions to abolish the Australian Building and Construction Commission and the Building Code that supported its work. And, once they were abolished, all hell broke loose. Just weeks after the ABCC was abolished, we saw violence on the streets of Melbourne, with militant union protestors intimidating the community and their supporters and attacking police horses. Workers on the site purchased an advertisement in the Herald Sun with an open letter to their own union bosses asking for the blockades to stop. Images of these protests were seen on television screens around the world. What message does this send to national and international companies about investing in building and construction projects in Melbourne or Australia?

And it does not stop there. We also saw the CFMEU grossly bullying nonmembers by creating posters labelling them 'scabs' and advocating that they be run out of the industry, in open defiance of the Fair Work Act and Supreme Court orders to end the protests.

On 19 June 2015, the Federal Court fined the CFMEU and five of its officials $545,000 for unlawful conduct at the $40 million Australian-government-funded Common Ground housing project for the long-term homeless. In its penalty judgment, the Federal Court said the conduct 'was a deliberate stratagem on the part of the CFMEU'. The court went on to say that 'an industrial organisation, be it an employer organisation or an employee organisation, which persistently abuses the privilege by engaging in unlawful conduct cannot expect to remain registered.'

Since the abolition of the ABCC, we have also seen a violent dispute at a brewery site in Geelong where union picketers were accused in court documents of making throat-cutting gestures and threats to stomp heads in, of shoving and kicking and of punching motor vehicles. We saw union protestors threatening people with 'Columbian neckties' at City West Water in Werribee, where the dispute was so heated that workers had to be flown in by helicopter. This behaviour is disgraceful and it should not be tolerated.

But what baffles me most is that the previous Labor government was well aware of this type of behaviour in the industry. That is why they were understandably reluctant to abolish the Australian Building and Construction Commission, despite strong union pressure. They contracted Justice Murray Wilcox to review the industry to buy some time. Justice Wilcox recognised the benefit provided by the Australian Building and Construction Commission, stating in his report that '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 has been made'.

We know this behaviour is still taking place across Australia today. The recent Royal Commission into Trade Union Governance and Corruption report, prepared by Commissioner Dyson Heydon in December 2015, referred to 'widespread and deep-seated' misconduct by union officials. The commission publicly investigated 75 case studies and conducted 189 days of hearings in Sydney, Brisbane, Canberra, Perth and Melbourne, of which 155 were public hearings. More than 500 witnesses gave evidence in public hearings.

As a result of this report more than 40 individuals and organisations have been referred to authorities including police, directors of public prosecutions, the Australian Securities and Investments Commission and the Fair Work Commission. There was also a recommendation for an independent body with greater powers to investigate union records and finances. The report flags numerous examples of misconduct, including blackmail, bribery, death threats and misappropriation of funds. More than 79 recommendations were made, including tougher penalties for union officials, and special rules to 'combat the culture of disregard for the law' were recommended for the CFMEU, which included giving parliament the power to disqualify union officials they consider unfit.

Commissioner Heydon said the findings uncovered in the report were just the beginning. He wrote:

These aberrations cannot be regarded as isolated. They are not the work of a few rogue unions, or a few rogue officials. The misconduct exhibits great variety. It is widespread. It is deep-seated.

He went on to say:

It would be utterly naive to think that what has been uncovered is anything other than the small tip of an enormous iceberg.

We know that the building and construction industry has not been exempt from such behaviour. That is why the ABCC is crucial.

Unlike some opposite, the government knows how important this industry is to the future of the country. That is why we are committed to ensuring that the rule of law is maintained and that workers in the building and construction sector can go to work free of intimidation and harassment.

This bill provides effective means for investigating and enforcing the law. The Australian Building and Construction Commissioner will be able to exercise their power to obtain information quickly and effectively without being hindered by unnecessary bureaucratic red tape around the issue of examination notices. However, to ensure accountability and transparency, the use of these powers will continue to be reviewed and reported on by the Commonwealth Ombudsman. The commissioner will monitor, promote and enforce appropriate standards of conduct by building industry participants and refer matters to other relevant agencies and bodies as required. They will also be responsible for investigating suspected violations of the law by building industry participants. They will also intervene in proceedings in accordance with these laws and provide assistance and advice to building industry participants on their rights and obligations under designated building laws.

The commissioner will be supported by deputy commissioners, and will be the head of a statutory agency. The agency will be properly funded to ensure it can do its work. The funding taken away by the Labor government will be restored.

The bill also requires the Commonwealth Ombudsman to prepare and present to the parliament a report about witness examinations undertaken by the commissioner during the year. This will ensure public transparency and accountability and give the community confidence in the work of the ABCC.

The bill also aims to improve the bargaining framework to encourage genuine bargaining at the workplace level. Enterprise bargaining negotiations must be harmonious, sensible and productive and should be tailored to the particular workplace.

As part of this government's policy to improve the Fair Work laws, we are committed to re-establishing the Australian Building and Construction Commission to ensure the rule of law and productivity on commercial building sites and construction projects. We took this commitment to the 2010 and 2013 federal elections as a key policy and committed to re-establishing the Australian Building and Construction Commission within 100 days of the parliament first sitting. We were given a clear mandate by the Australian people to make this change, and that is why I stand here today.

We also promised that a re-established Australian Building and Construction Commission will administer a code that will govern industrial relations arrangements for government-funded projects. This step will ensure that taxpayers' dollars are used efficiently.

By abolishing the Australian Building and Construction Commission, Labor undermined confidence in the building and construction industry in this country. As a result, we have seen a return to lawlessness and an increase in the number of days where work is simply not being done in the industry. Workers in this industry deserve to be able to go to work each day without the fear of being harassed, intimidated or subjected to violence.

The people of Macarthur are depending on this industry and those who work in it. My electorate is experiencing an extreme amount of growth right now, which will continue over the next three decades. The building and construction industry employs thousands of residents in my electorate and south-west Sydney. It is imperative that the industry is stable and productive as we move forward into 2016 and beyond. (Time expired)

10:06 am

Photo of Christopher PyneChristopher Pyne (Sturt, Liberal Party, Leader of the House) Share this | | Hansard source

I move:

That the question be now put.

10:17 am

Photo of Rob MitchellRob Mitchell (McEwen, Australian Labor Party) Share this | | Hansard source

The question now is that the amendments moved by the honourable member for Melbourne be agreed to.

A division having been called and the bells having been rung—

As there are fewer than five members on the side for the ayes, I declare the question resolved in the negative in accordance with standing order 127. The names of those members who are in the minority will be recorded in the Votes and Proceedings.

Question negatived, Mr Bandt and Mr Wilkie voting aye.

The question now is that the bill be read a second time.

Message from the Governor-General recommending appropriation announced.