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Tuesday, 14 February 2017
Page: 985


Ms OWENS (Parramatta) (18:01): I am pleased to stand to speak on the Building and Construction Industry (Improving Productivity) Amendment Bill 2017. I do not have a union background. I was a small-business owner and, immediately before coming to parliament, I ran a national trade association, so I was well and truly on the employer and business side. And yet I am standing in this House today speaking on a bill that I think, at the very best, is incompetent and will not achieve what this government sets out to achieve.

I do not think that what they are trying to achieve is a good idea, but I want to assess this bill against the criteria that they set for themselves and have a look at what they say they are trying to achieve and whether or not this bill will do that—because it will not. It breaches the very purpose of the code that it seeks to impose. If we were in this House talking about a Building and Construction Commission that actually looked at the construction industry and codes that handled those things—that actually looked at the fact that this is an industry that makes up eight per cent to 10 per cent of GDP and it has between 20 per cent and 25 per cent of insolvencies, that it regularly sells debt to some very unsavoury characters, that it has unacceptably high levels of injury—I would have something else to say, but we are not. We are looking at a structure that has been set in place specifically to wind back the power of unions in an industry which, in many areas, is totally out of control. But now I will leave that and I will go to the bill itself.

Let us look at what the bill says it is going to do. Back in December, when the construction industry bills were passed, a code was established which defined what enterprise agreements could contain if a company was going to tender and be awarded a tender for a government contract. Because most industrial awards are negotiated years ahead, sometimes three years, the Independents got together and, with Labor's support, managed to get an amendment through which allowed businesses a two-year transition period. The code would apply but not until 29 November 2018. So businesses that had already entered into an agreement had time to renegotiate.

What this bill does, just three months later, is wind that back and allow just a nine-month transition period instead. It says that you must now be code compliant by 1 September 2017. You can submit a tender before that, but you cannot be awarded the tender unless you are code compliant, even in that nine-month transition period. That means that, from the time this bill passes, no company that has an enterprise agreement which they negotiated in good faith under the law will be able to tender for a government contract and be awarded that contract, unless they can renegotiate that agreement outside of its term—in other words, start again. That is an extraordinary shift in three months.

What we heard from the member for Corangamite, which was quite extraordinary, was that Senator Hinch agreed to this amendment because various building companies went to him and said that the companies that were not compliant had an advantage over those that were. In other words, the companies that had enterprise agreements that were in breach of this code—because the unions asked for too much—had an advantage over the companies that were code compliant. In other words, it was cheaper to contract a company that was not code compliant than one that was. Excuse me, but that makes no sense. If the purpose of this is to push down prices for the government and get value for the taxpayer, how can it be that we are actually making this amendment because a senator believes that it is more expensive if you are code compliant than if you are not? If the member for Corangamite got this wrong and Senator Hinch is saying, 'No; actually it is the other way around,' then why on earth would we be forcing companies to renegotiate contracts which they did of their own free will when they deliberately entered into contracts that made them supposedly less competitive? It makes zero sense. It makes no sense whatsoever. It does bell the cat that this is not about the things that this government claims it is about, which is driving down prices for the taxpayer. It is about union busting and union busting alone.

Let us look a little bit further at what this code actually is. I am reading from the explanatory statement. The purpose of the code is to:

… promote an improved workplace relations framework for building work and promote compliance with this code of practice, the Act and designated building laws and encourage the development of safe, healthy, fair, lawful and productive building sites for the benefit of all building industry participants …

So the purpose of the code is to make our workplaces better for the workers and safer. That is one of its objectives.

It is hard to imagine, then, why the code would prevent workers from negotiating that they should, for example, have asbestos safety training, because that is prohibited under the code; they cannot do that. It is hard to imagine why that would be the case. Given the level of suicide by construction workers on construction sites, it is hard to imagine that the code would prohibit the provision of training that assists management and leaders on worksites to recognise the symptoms of a person who may be at risk. Given the objective of the code, it is hard to imagine why the code would prohibit workers who stand out in the sun in 40 and 45 degrees from insisting that their clothing be made of a material that is suitable for that. It is hard to imagine why the code would preclude those things, if that is the objective of the code.

For the benefit of all building industry participants—including workers, clearly—the purpose of the code is to 'encourage the development of safe, healthy, fair, lawful and productive building sites'. And it is not just about workers. For example, asbestos safety is not just about workers. When a worker handles asbestos badly and contracts the dreadful cancers that it can cause, the whole community pays for that. Workplace safety is not just about the worker; it is also about the company and the business itself. Workplace safety is something that both sides of the industrial field should care about, and I know that in most cases they do, which is why so many companies have these clauses in their enterprise agreements. They agree with them. They put them in there because it is actually good for everybody if workers are safe. It is good to have workers as well as managers caring about safety. It is a good thing.

The second paragraph says that the purpose of the code is to:

… assist industry stakeholders to understand the Commonwealth's expectations of, and requirements for, entities that choose to tender for Commonwealth funded building work …

If the purpose of the code is to assist stakeholders to understand the Commonwealth's expectations, three months ago they thought they knew, and now they do not. As bad as it was, three months ago they knew what it was: they had two years to renegotiate their contracts. Now they do not. As the previous speaker outlined, the code itself is so broad that virtually any clause in an enterprise agreement dealing with the conditions that workers work in could be precluded under this code. So when the fair work umpire makes a decision about one clause, does every other building company have to renegotiate in order to conform to the code? This does not introduce certainty; it introduces extraordinary uncertainty. It does exactly the opposite to what the explanatory statement says the code is all about.

I would also like to point out that when the government made these changes in secret over Christmas there was no negotiation. There was no consultation with the industry. There was negotiation with the Independents behind closed doors, but there was no consultation—to the extent that the government did not know how many businesses would be precluded from being awarded a tender under the new code because they were in enterprise agreements that were not new code compliant. They did not know; they did it anyway.

It turns out that there are at least 3,300 companies that would be precluded from being awarded a tender under this bill because they have entered into an enterprise agreement in good faith within the law with the union and those agreements will now not be code compliant. At least 3,300 companies will find themselves in this position. Master Builders Australia have said, 'That's okay, there'll be enough companies out there that are code compliant to fulfil the government's requirements for its building.' That is not the point. This is not about the government and whether it can let contracts. This is about fairness in the sector. This is about fairness in contracting. This is about companies who negotiated in good faith but who will now have seven months to renegotiate an agreement within its term.

I put to you: if these unions are so terrible and such bullies, who is going to benefit from the fact that the construction company has to renegotiate within that time frame in order to win a tender? That actually gives the power to the union and not to the construction company. That seven-month process does not empower the construction company to completely put the screws into the union. It does completely the opposite. It says to the construction company, 'You'd better find a way to get the union to give you an agreement you can both sign. And you've got to do it within seven months or you can't tender from this contract.' And do not believe that the unions cannot find things to put in enterprise agreements that will be code compliant. They will. They will find a way to do it. Then the fair work umpire will say, 'That's a new one. I haven't seen that one before. You can't have that one,' and everyone will have to renegotiate their agreements again, and then the unions will come up with something else.

This is a nightmare for construction companies. It does completely the opposite to what the government said it would do, particularly when we have a government that keeps telling us over and over again what nasty people the CFMEU are and how they are always trying to bully these huge construction companies, which make billions of dollars, into doing their bidding. This is quite a nightmare. It will not do what the government thinks it will do. It will bring incredible uncertainty into the sector.

If the government's purpose is to keep costs down, the best way to do that is to have an open tender process, which it does. This means that the government, even without these codes, can look at a company that has an enterprise agreement that they do not like and a company that has an enterprise agreement that they quite approve of and see which one is cheaper. If it is cheaper to have those code-compliant enterprise agreements, then those companies will win the tenders anyway. If companies are going too far in their enterprise agreements and that is driving up costs, they will be more expensive. The tender process itself is sufficient to weed out those companies whose enterprise agreements are not appropriate for the taxpayer spend. Tendering alone does that.

Why is it that the government is suddenly going nanny state when it comes to the construction industry and deciding what an employer and a worker can agree with each other? Where the hell does that come from? This supposed small government, this conservative government, suddenly decides that it has to decide whether or not a group of workers and their employer can make an agreement on the quality of their clothing. No, they cannot, because this government says that it is not right and it is not fair. It also says in its own arguments for doing this that those companies that do that would actually be cheaper, and give an unfair advantage to those that are not code compliant. This is a nonsense. It is a total, absolute nonsense.

If the government really did care about trying to lift the standards in the construction industry and ensure that taxpayers got a good deal, and that those wonderful objectives of the code were met—more safety et cetera—then perhaps they could target a few other things. They could, for example, target, as I said in my opening remarks, the incredibly high insolvencies which do put businesses out of business. When a big company goes insolvent—and the insolvency rate is between 20 and 25 per cent on eight per cent GDP—then many hundreds of workers, small contractors and small businesses go to the wall because of that.

When workplace safety is not met over and over again by a company, how are they treated in the code? Where is their banning from government contracts when people actually die in their workplaces and their accident levels are too high? Where is that? Where is the code that actually makes a difference?