Senate debates

Wednesday, 4 March 2015


Building and Construction Industry (Improving Productivity) Bill 2013, Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013; Second Reading

6:26 pm

Photo of Christopher BackChristopher Back (WA, Liberal Party) Share this | Hansard source

I rise to support the Building and Construction Industry (Improving Productivity) Bill 2013 and the Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013.

The government is committed, as it said leading into the 2013 election, to doing all that is necessary to reform the building and construction industry and to reinstate the rule of law in this critically important sector to our country. The government wholeheartedly believes that workers deserve the right to go to work each day without fear of being harassed, intimidated or being the subject of violence. The former Labor government, led by the now Leader of the Opposition, Mr Shorten, undermines confidence in the building and construction industry, particularly in the states of Victoria and my home state of Western Australia. Abolishing the ABCC saw a return to the lawlessness, which I intend to point out in my contribution, and an increase in the number of days where work is simply not being done in the industry to the loss of workers, employers, productivity and, of course, taxpayers, who largely fund most of the major construction projects.

We just cannot afford to have a building and construction industry that is inefficient and that is unstable. We must have the restoration of the ABCC and its code to support the work that is critical for reform in this country. The contents of the bill reflect this commitment. I make the point that with the massive investment in infrastructure now underway and into the future, which is going to completely transform this country in its cities, in its regions and in its rural and remote areas, there has never has been a more important time for this to take place. The industry represents some eight per cent of GDP, equivalent almost to the mining industry in our country. The industry can be an incredibly important source of sustainable high-paying jobs with skills development and long-term employment prospects.

When the ABCC first existed, the building and construction productivity increased 10 per cent, the economy gained $5½ billion a year, we saw inflation reduced and we saw GDP go up. All of those stats are critically important to everybody in our community. As you know and as we all know, when projects are delivered on time and on budget there is more money for more projects. There is greater confidence in the industry, there is greater pride and there is greater investment from both Australian and, of course, international companies. Everybody benefits, but, more importantly, the Australian taxpayer, the economy and the consumer all benefit. Conversely, when there are undue delays, budget blow-outs, time overruns and cost overruns, we all know what the impact of that is: confidence goes, future prospects of projects decrease and nobody is the winner.

The bill of course re-establishes the ABCC so that we will have a genuinely strong watchdog to maintain the rule of law, to protect workers, to protect construction contractors and to improve productivity even further. The point needs to made that, whilst the focus of previous speakers has been on employees and workers, the ABCC will be equally directed towards rogue employers in the industry. We recognise of course that we want to be rid of them, as we do other rogue participants. We want to encourage further investment. We want to provide more jobs. We want to make sure there is prosperity for workers and for the economy. All of us as taxpayers in this country should surely want to see that we get the best value for the taxpayers' money.

The bill will prohibit unlawful industrial action, unlawful picketing and coercion and discrimination. Penalties that are high enough to provide an effective deterrent will apply. I will address those in a few moments, because we have seen breaches of the provisions at will at the moment, by some of the rogue operators and unions. An active regulator will be established to have a range of effective remedies to counter unlawful behaviour through the courts. We are not talking about the normally operating industrial climate. We are not talking about the normal commercial relationships between project managers, project controllers and their workforces. We are talking about coercion. We are talking about failure of the rule of law. The Cole royal commission examined it in 2003 and noted that the construction industry was characterised by unlawful conduct. Commissioner Cole 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.

Furthermore, he concluded:

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


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

I heard the previous contributor, Senator Rice, speak about criminal charges as a result of the royal commission. It was never in the terms of reference of the royal commission to prefer criminal charges. So why do we have this trotted out so often about a commission whose role was to examine, to determine and to come up with recommendations? It was not there to come up with criminal charges.

Even the Labor Party in government acknowledged the need for a special regulator. The problem was that, having come into government, having been at the beck and call of the militant union the CFMEU, it still took them from 2007 to 2012, around five years, to eventually get rid of the ABCC—because they knew very well that it was necessary and important. So indeed did Justice Murray Wilcox. He stated very clearly the need for regulation in this industry over and above other industries in the Australian economy. What we saw the then Labor government do was to replace the ABCC with a toothless pussycat—not even a toothless tiger. It was without teeth and had temporary powers that were drafted—and this is interesting, because the Senate needs to address itself to this—to automatically sunset at the end of May this year. That is in less than three months time. So the Senate has got to make a decision.

And it was only recently that the Heydon royal commission commented about:

… the culture of wilful defiance of the law which appears to lie at the core of the CFMEU.

That was from a recently retired eminent High Court Justice of Australia.

Mention was made by the previous contributor of Econtech. I am not going to quote from Econtech. I am going to quote from the Australian Bureau of Statistics, which I think most of us in this chamber would recognise as being an independent assessor and judge of data. I am going to quote from the ABS statistics for the June quarter and the September quarter of 2014. We will not, until 20 March this year, have the figures for the December quarter, but these are the figures we have. In all industries in the June quarter, there were just under two days lost per 1,000 employees in all industries—1.9. But for the construction sector—Senator Rice will be interested to know, as she says there is no significant difference between different industries—the figure for the June quarter was 6.1 days lost. These are ABS statistics—not Econtech, not CJ Back but ABS statistics. Let me go to the September quarter. In all industries in the September quarter, the last one for which we have figures, the figure was 2.4 days lost per 1,000 employees. In the construction sector, the figure was 18 days lost per 1,000 employees. I reckon that is a pretty significant difference—6.1 days lost in the June quarter, trebling in the September quarter to 18 days lost. The construction sector accounted for some 56 per cent of the total working days lost in that quarter, and the number of days lost was 750 per cent higher than all industries. I reckon there really is an issue that has got to be addressed.

There is one table that says it all, and it is one that we all need to focus on. If we were to give all industries a baseline of 100 per cent, I will then explain to you again Australian Bureau of Statistics data. In the pre-ABCC days, between September 1999 and December 2000, if all industries' baseline was 100 per cent, that for the construction sector was 480, 4.8 times higher. This is the interesting statistic that I would suggest people focus on. We then go to the years of the ABCC, January 2006 to June 2012. If the figure for all industries is again 100 per cent, do you know what it was for the construction sector, Mr Acting Deputy President? It was 1.3 times that—130. So we have dropped from 480 to 130. And guess what happened under the Fair Work Building and Construction agency, from July 2012 to September 2014. Remember, the original figure was 4.8 times and it went down to 1.3. Put your money on it, Mr Acting Deputy President: she is back up to 420 again. Those are the ABS stats—through you to Senator Rice, Mr Acting Deputy President. Those are Australian Bureau of Statistics figures.

In the home state of some of our senators, Victoria, I refer to the work of the CFMEU in September, I think, of 2012, not long after the abolition of the ABCC. We saw the militancy and violence demonstrated by that union, but what is interesting here for me, as a person who has been an employer for many years and has been an employee in both the government sector and the private sector, is that the workers on the Grocon Myer Emporium construction site themselves, being blockaded, put an advertisement in the Herald Sun newspaper with an open letter. Who was it to? Grocon? Myer? The Australian government? No. Do you know who it was to? It was to their own union bosses, asking them to stop the blockades and give them access to their own workplaces. This was within months of the ABCC ceasing to exist and the toothless pussycat replacing it. It was not the employer—it was not Grocon. It was not the construction contractors. It was not the wider community. It was not taxpayers. It was not the police, whose horses were kicked. It was not they who put the ad in; it was the workers themselves who asked their own union bosses whether they could please go back to work. And in this place we hear the sort of commentary from those who are opposed to the reinstitution of an organisation that will stop that happening.

On 4 September 2012—this is the degree to which control had been lost, with much of the Melbourne CBD closed down—we had the senior CFMEU official Mr Christopher addressing a crowd of over 1,000 protesters on Lonsdale Street with a megaphone, with fewer than 100 officers present. This is what he said: 'There's 11,000 coppers in this country or in Victoria. There's 30,000 members of the CFMEU—greater amongst the other unions when we call on their support—so we're up round the 50,000 mark. So bring it on. We're ready to rumble.' That is what we are dealing with in an industry that contributes more than 10 per cent of the GDP of this country—one which is a tremendous employer, with ongoing work over many years because of the commitment of this Abbott government to infrastructure projects. That is what we are working with.

We have had, as I said, Commissioner Heydon making reference to wilful defiance. We saw the ACCC investigation of the CFMEU boycott against Boral, in which 'ACCC Chairman Sims was confronted by the culture of silence and fear of reprisal that is a feature of the building and construction industry'. That is not my statement. Mr Sims made the comment:

… the ACCC has only been able to progress the investigation by compelling people to give evidence… Compulsory powers are necessary to break this culture of silence and shine a light—

those are his words, not mine—

on the intimidation, thuggery and fear of reprisal that has darkened the industry.

There have been comments about the need and the power to compel people to give information. For the information of all of us, and maybe those who are listening to this, you have the ACCC, which has these compulsory powers. You have ASIC. You have the Australian Prudential Regulation Authority, APRA. You even have Medicare, which has compulsory powers similar to those proposed by the ABCC. And as we know, of course, we have in this new iteration of the ABCC the requirement for the Commonwealth Ombudsman to report in the event of there being recordings of interviews with people who are required to answer. It has been said this afternoon that the Ombudsman does not think he has the power. Again, the Ombudsman is a statutory officer who appears before Senate estimates and will be required by this place. I have no doubt that all 76 of us have the capacity to ensure that the Ombudsman is up to the task. I have no doubt at all about that.

As we know, when the then Labor government abolished the ABCC to appease the CFMEU, it also slashed the maximum penalties for breaking the law by two-thirds. Where is this strong cop on the beat that I heard about a few minutes ago? This, of course, just encouraged the CFMEU to continue defying the law. Then we had that wonderful little situation that, if two parties actually settled an issue before the regulator had an opportunity to deal with it, of course the matter had gone away. The analogy, of course, would be that someone runs a red light and causes serious damage to another person, but one sorts it out with the other one behind the scenes and, when the police go to prosecute, they say, 'Oh, no, we've sorted all that out, thanks very much; we've done a deal.' Come on. That is not the way that we engage in industrial relations in this country. That is not the way that we are going to continue to get the confidence of the whole sector, the taxpayers of this country and those who invest, be they Australians or others.

Senator Rice's comments to you and the chamber, Acting Deputy President, are interesting. We recently had the situation in her home state of Victoria with Boral, the CFMEU and the Regional Rail Link project. It is one I know she and her party would be tremendously interested in, and yet we saw—


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