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Thursday, 9 February 2012
Page: 583


Mrs ANDREWS (McPherson) (12:28): I rise to speak on the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill 2011. This bill will rename the Building and Construction Industry Improvement Act 2005 as the Fair Work Building (Industry Act) 2011. It will also abolish the Australian Building and Construction Commission and replace it with the Fair Work Building Industry Inspectorate, which will be headed by a director appointed by the minster. Under the bill, the minister will have the power to specify the manner in which the director of the inspectorate is to exercise powers and functions, although that will not be in relation to particular cases. This is similar to the power of the minister found in the BCII Act. However, the minister will also have the ability to give direction to the director on policies, programs and priorities. This power is not found in the current act. The bill also introduces new compulsory examination notices which would allow for the director of the inspectorate to apply to a nominated Administration Appeals Tribunal presidential member for a notice that would require a person to attend an examination in relation to an ongoing investigation. The bill provides for the conduct of such examinations, as well as penalties for noncompliance with an examination notice. However, an interested person can make an application to have the compulsory examination notice powers of the Administration Appeals Tribunal presidential member not apply to particular building projects. In effect, this means that a person can simply switch off the inspectorate's ability to examine possible contraventions of workplace relations law.

The bill before the parliament today will strip away many of the protections that workers in the building and construction industry currently have that ensure they work in a safe and lawful environment. When we look to what has happened in the past, the most probable outcome of the removal of the Building and Construction Commission will be a resurgence of uncertainty and a decline in productivity in the building and construction industry.

I have previously spoken in this place about the history of the establishment of the Australian Building and Construction Commission. Whilst I do not intend to go through that detail today, it is useful to briefly go through the background. The building and construction industry in Australia has a long history of industrial disputation. Over many years, there have been numerous inquiries and investigations into how that sector operates.

Some of the reviews appeared to focus on terms and conditions of employment and relevant awards provisions, such as the review conducted by a full bench of the Australian Industrial Relations Commission in the late 1980s. The full bench made a number of findings in relation to inconsistent regulation between federal and state jurisdictions, the abolition of paid rates awards, the establishment of a single award and the rationalisation of award respondents. Whilst these were clearly very useful findings, this review dealt with only a relatively small number of issues that impacted on the building and construction industry.

In effect, what was uncovered later revealed it to be the tip of the iceberg. Whilst this was a positive step in regulating the industry, there was no doubt that there was a significant way to go to reform the sector, particularly to deal with entrenched work practices. There were further reviews during the 1990s and the early 2000s at various levels dealing with a wide range of issues, including workers being forced to join a union, right of entry, strike pay and contractors.

In 2001 the Cole Royal Commission into the Building and Construction Industry was established, with broad-ranging terms of reference, including inquiring into and reporting on unlawful or otherwise inappropriate industrial or workplace practice, occupational health and safety, fraud, corruption, collusion or anti-competitive behaviour, coercion, violence and interference in decisions on whether or not to engage persons or the terms under which they would be employed or engaged.

Clearly, there were some significant and serious matters impacting on the performance of the sector in the years leading up to the royal commission. Submissions were put to the Cole royal commission in relation to the perceived need by major contractors to concede to union demands in order to avoid future economic losses and subsequent pressure on subcontractors to sign pattern bargaining agreements or not be engaged on major building sites.

The findings of the royal commission included that there was an urgent need for structural and cultural reform in the building and construction industry and that the industry 'departs from the standards of commercial and industrial conduct exhibited in the rest of the Australian economy'. Commissioner Cole found that past attempts to reform the conduct and culture of the industry had failed and that this failure was due 'to two principal factors'. Firstly:

… there has been an insufficient determination on the part of government to establish structures which will enable the industry to operate fairly and productively and in a manner respecting the rights of individuals. There has been an inadequate structure to enforce the law and usual standards applicable in other industries.

Commissioner Cole also recommended the establishment of an independent commission, the Australian Building and Construction Commission, to monitor conduct in the industry.

The Building and Construction Commission which was subsequently established, has instituted proceedings for contravention of laws, including those relating to coercion, right of entry, strike pay and freedom of association, just to name a few. It has also initiated proceedings in courts and with Fair Work Australia. Investigations over the past financial year discovered over 900 contraventions of Commonwealth workplace relations law, with $2.5 million worth of penalties being imposed by the courts and Fair Work Australia. Master Builders Australia said in relation to these penalties:

The Parliament cannot ignore such court findings and convictions and should not agree to any watering down of the current powers.

From its inception through until the end of May 2011, the Australian Building and Construction Commission has successfully prosecuted 74 cases, and it has been unsuccessful in only eight of those. Most of these cases have been in Victoria, where there is a long and bitter history of disputation in the building and construction industry. In the financial year 2010-11, 402 investigations were conducted by the Australian Building and Construction Commission into alleged workplace relations law contraventions, 72 of those being in my home state of Queensland. In 2010, there were only 20 investigations in Queensland. During this period, there were 354 new investigations, compared to the 2010 number of 241, and the 2009 number of 213. There were also 107 continuing investigations, compared to 48 in the previous year. The picture that this very clearly paints is that there has been an increasing number of investigations conducted by the Australian Building and Construction Commission over more recent years. It is clear from that pattern—there is clear evidence—that there is a genuine, ongoing need for the Australian Building and Construction Commission to be retained and to continue. It also, as part of its activities, began 134 sham contracting investigations and recovered $127,479 in wages—again, significant amounts. The increase in the number of investigations can be put down to the Australian Building and Construction Commission now being able to conduct full service regulation. This was only achieved in March last year after it assumed responsibility for wage and entitlement claims from the Fair Work Ombudsman.

These facts show the effectiveness of, and the hard work that has been done by, the Office of the Australian Building and Construction Commissioner in bringing a degree of certainty to an industry that has otherwise been characterised by, as the Cole commission described it, a certain degree of lawlessness. However, this government has recently seen the number of working days lost in the building and construction industry skyrocket to 44 days per thousand employees, the highest level since 2005. This is clearly disappointing, considering that the number of working days lost per thousand employees fell from 224 in 2004 to 24 in 2006, this being the time period where the Australian Building and Construction Commission was first set up.

It would be inappropriate and unrealistic to believe that all disallowed activities on building sites can be completely eradicated. The National Electrical and Communications Association also said in November last year that there is still some degree of lawlessness in the building and construction industry but:

… the ABCC has been effective in removing the worst instances. Removing the ABCC or emasculating its powers will see increased inappropriate behaviour and this will lead to the costs of projects blowing out and delays in construction.

I support those comments.

The benefits that have come about due to the Australian Building and Construction Commission's activities are not restricted to regulation of inappropriate action in the industry. During the period of time since the creation of the ABCC, the building and construction industry has seen a 10 per cent increase in productivity, an economic welfare gain of $5.5 billion per year, reduced inflation of about 1.2 per cent and a 1.5 per cent increase in gross domestic product. The creation of the Australian Building and Construction Commission has also had the effect of reducing the cost of construction around Australia by 20 to 25 per cent, with project delays being significantly reduced.

As an independent body, the commission is currently separate from Fair Work Australia and the Fair Work Ombudsman. It has the ability to investigate contraventions in workplace relations law and also to promote harmonious working environments within the entirety of the building and construction industry. Yet the government is willing to strip back all the ground that has been made by the commission in recent years, even in the face of the commission's success.

Although this bill may have national impacts, it will potentially directly impact my electorate of McPherson. On the Gold Coast, the construction industry has traditionally been a strong contributor to the local economy, yet there has been a downturn in the industry due to economic circumstances, probably significantly for the past two or three years. The abolition of the Australian Building and Construction Commission will return the building and construction industry to the days of work stoppages, heavy handed industrial tactics and project uncertainty. With the current economic climate, the Gold Coast's building and construction industry cannot withstand the introduction of another impediment to future success, nor can the wider Gold Coast economy, the Queensland economy or the Australian economy.

Removing the Australian Building and Construction Commission as well as the protections it offers workers in those industries will merely be a return to the old days of union run and dominated construction sites. This cannot be allowed to happen, not just for the sake of efficiency and certainty in the building and construction industry but for the benefit of communities and the nation. I support the continuation of the Australian Building and Construction Commission.