PARLIAMENT HOUSE, CANBERRA: I rise to speak this afternoon on the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill 2011 and to argue passionately against its passage in this parliament. This bill impacts one of the most important sectors in our economy: the building and construction industry. This is an industry which employs almost a million people, it contributes to 10 per cent our GDP, and it supports the growth and prosperity of almost every other industry as well. We know, for example, that if construction costs are down then this flows through the entire economy in a positive way. It means that the input costs for most businesses are lower. On the other hand, if construction costs are up, the reverse applies. Then it means that every single business needs to have higher input costs in relation to their construction costs.
This bill goes directly to the productivity of this sector, it goes directly to the safety of this sector and it goes directly to the performance of the construction industry. Unfortunately, it has a negative impact on this sector in every sense of the word. Consequently, we on this side of the House are strongly opposed to the bill.
It is well known on this side of the House and it is well known across Australia that unlawful behaviour exists on some building sites. It is well known, as ACCI has pointed out, that intimidation, threatening behaviour and disregard for the law have been part of the industry for some time, particularly in my home state of Victoria. In the mid-2000s, such was the extent of the public’s concern, the industry’s concern and the government’s concern that a royal commission was established to get to the bottom of the problem and to work out how to tackle some of the unlawfulness which was occurring on building and construction sites. A royal commission was established, headed by Mr Cole QC. This commission found a number of things. It found that indeed the building and construction industry was characterised by widespread disregard of the law. Indeed, the Cole royal commission, the highest form of government inquiry that we can have, found over 100 types of unlawful and inappropriate conduct occurring on building and construction sites across Australia.
It also found that existing authorities and agencies did not have sufficient power to properly tackle that unlawful behaviour. It went through in some detail particular case studies which showed exactly what was occurring on some of these sites. It showed exactly some of the payments that were made, some of the go-slow actions that were occurring, some of the union unlawfulness, some of the days lost, and indeed it showed that in some instances the entire existence of some companies in Australia was jeopardised and that hundreds of jobs did not eventuate because of the unlawfulness which was occurring on the construction sites.
The Howard government took heed of the royal commission. It looked very closely at the recommendations of Mr Cole QC and, off the back of that report, established the Australian Building and Construction Commission to tackle unlawful behaviour. It wanted to establish a very robust independent authority that could aggressively tackle the unlawful behaviour Mr Cole had documented so thoroughly through his royal commission.
The ABCC has had a dramatic impact—there is no doubt about that. It has been what we would characterise as the tough cop on the beat. It has taken a very strong stance against unlawful behaviour on building and construction sites and a very strong stance against union thuggery on building and construction sites.
Let us look at the results of this action. I am not saying that all of these improvements are due to the ABCC, but certainly it has had a considerable impact on the results I am about to outline. First of all, productivity has increased by 10 per cent since the introduction of the ABCC. We have had annual economic welfare gain from the sector of $5.5 billion. It has helped reduce inflation overall by 1.2 per cent. Since the ABCC was introduced, the sector has helped increase GDP by 1.5 per cent. The following statistic is quite remarkable. The number of working days lost annually per 1,000 employees in the construction industry fell from 224 days in 2004 to 24 days in 2006, just a year after the ABCC was introduced. It is a remarkable impact. Building costs have fallen by 20 to 25 per cent. As I mentioned earlier, lower building costs flow through the entire economy. Almost every single business relies on some sort of office space, some sort of building, which has to be constructed and if building costs are lower it means the business’s input costs are consequently lower and it can be more profitable and employ more people. So the ABCC has undoubtedly been tremendously successful in the overall effort to tackle unlawful behaviour, to improve productivity in the industry and to consequently reduce building costs as well.
Nearly everyone has benefited from this. Clearly the industry itself has benefited because it is now a more productive industry with fewer days lost due to industrial action and the like. Consumers have also benefited because, with building and construction costs down by 20 to 25 per cent, they are also beneficiaries of the actions of the ABCC. Workers have benefited through higher wages, which can only be sustainable through higher productivity. Many of them have also benefited from a safer workplace, knowing that the laws will be abided by. Across all sectors—whether it is the industry, consumers, workers or downstream businesses—nearly everybody has been a beneficiary of the operation of the ABCC.
What does this bill before us actually do in relation to the ABCC? Remarkably, it abolishes this very body that has been so successful. It strips away the protections ensuring workers can work in a safe and lawful environment and replaces them with what we would consider to be a toothless tiger. The new body which will replace the ABCC will not be an independent body—it will be established within Fair Work Australia and it will be controlled by the minister; a minister under a Labor government who invariably will have been a union official and invariably will be reliant in some respects on the union to retain his or her ministry. If this bill passes it is almost inevitable that it will have a negative consequence on some of the things I have talked about. Inevitably it will contribute to more days lost on building sites and go-slows on major projects. It will have a negative impact on losses and productivity.
It is not as if there are no longer any problems on business sites. ACCI points out that in the last year alone there were 402 investigations into alleged breaches of laws. I know in my own state of Victoria there have been 130 days lost at the Wonthaggi desalination plant due to industrial action, and many commentators argue that there is basically a go-slow going on down there. ACCI believes this bill will effectively shut down the ABCC and hand over a watered-down set of powers to a specialist Fair Work Building Industry Inspectorate, which it suggests will send all the wrong signals to industry participants.
Why is the Labor Party doing this? The ABCC has been a tremendously successful body. It directly came out of an independent royal commission headed up by a very respected QC and it has been very effective in its operation. I mentioned before that nearly everyone has benefited from the operation of the ABCC—the industry, workers, downstream businesses and consumers. The organisations that have not been beneficiaries have been the unions, which in some respects have had some of their unlawful activity curbed by the operation of the ABCC.
As you would appreciate, many businesses are doing it exceptionally tough at the moment. The construction industry is doing it tough in many places, with growth figures flatlining. This is the most inappropriate moment to be introducing further measures that will make it tougher for that industry. This government has already introduced a number of measures that make it tough for the building and construction industry and indeed tough for businesses overall. We have had upward pressure on interest rates because of the four highest budget deficits in Australian history over the last four years. We have had a retightening of labour laws, which many businesses say are making it difficult to properly manage their businesses in a fair way. We have had overburdensome regulations introduced in many other areas. And of course the granddaddy of them all will be coming our way on 1 July and will apply to every single business across Australia: the carbon tax. While businesses are doing it tough, while we read in the newspapers almost daily about job losses in various sectors, the government is going ahead with some of these measures that just make it tougher for industry to operate.
This bill before us is not a good bill. This bill attempts to fix a problem that does not exist. Rather, the Australian Building and Construction Commission has been an immensely effective, independent organisation that has tackled unlawful behaviour, contributed to increased productivity, contributed to a safer workplace and contributed to lower construction costs, which flow through to everybody. We should be opposing this bill before us.