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Thursday, 18 August 2005
Page: 67


Senator BARNETT (1:39 PM) —I stand in support of the Building and Construction Industry Improvement Bill 2005, the Building and Construction Industry Improvement (Consequential and Transitional) Bill 2005 and the government’s workplace relations reforms. I congratulate the Prime Minister and Mr Kevin Andrews, the minister who has been leading the fight and the reforms to the building and construction industry and workplace relations more generally. I will speak on both of those issues, but I do want to say right upfront that, in terms of the building and construction industry reforms, they are part of a package to force cultural change. They will encourage fair play and create a far more efficient and decent building and construction industry in this country.

The Australian Labor Party have acknowledged to some extent the problems of the building and construction industry, but their challenge now is what they will do about it. Are they prepared to separate themselves from the lawlessness of this industry or will they bow to the thuggery of the well-known and vocal elements in the industry? I refer specifically to some elements of the union movement. I refer to the CFMEU. I note upfront in this debate that, since 1996, the CFMEU has contributed a shade under $5 million to the Australian Labor Party. I note for public attention that the ACTU and the unions generally in this country have contributed $47 million since 1996 to the Australian Labor Party. That is not a small amount of money; that is a large amount of money. As the saying goes, ‘He who pays the piper calls the tune.’ I believe it is payback time for the Labor Party. I believe it is payback time in terms of their opposition, which they have announced. They are opposing this legislation, our building and construction industry reforms and our workplace relations reforms. I believe their opposition is consistent with the fact that it is payback time.

It is also consistent with the fact that they support the ACTU’s consistently misleading and deceptive campaign that is being waged and foisted on the Australian people, particularly the vulnerable working men and women of Australia. They have a campaign of fear being foisted on them at the moment. I can give you no better example than one from a transcript I have. I did not actually see the program. It is from Lateline of 10 August. This is a demonstration of the campaign of fear, the extent to which they will go and how low they will go. Sharan Burrow, the ACTU president, said:

I need a mum or a dad of someone who’s been seriously injured or killed. That would be fantastic.

She was answering a question from Maxine McKew on Lateline, the ABC program, and that is what she said. She will go to any extent whatsoever to feed on the vulnerable and on the fears of Australian men and women. Do you know that, since that statement that she made on Lateline just a few days ago, she has not apologised to the Australian people and she has not withdrawn that statement! This is consistent with the ACTU’s campaign, which is misleading and deceptive. There are no bounds in terms of the extent of that campaign. This is consistent with the Labor Party’s opposition to our bills, which try to fix the building and construction industry and make it better, fairer, right and honest.

The Labor Party has a choice of acting for the benefit of all Australians, especially those workers and their families, or protecting behaviour, particularly in the building and construction industry, which is unlawful, harmful and costly to us all. The government has made its choice. It has said, ‘Yes, there will be reform of the building and construction industry,’—and this is what the legislation is on about. Let us make it clear that the Leader of the Opposition, Kim Beazley, has said: ‘The lemon has been squeezed dry,’ in terms of workplace relations and industrial relations reform. He does not want any further reforms. We will ensure that this legislation dealing with the building and construction industry will be successful, because this is very important legislation.

I will go back to some of the reasons for this legislation. It emanates from the Cole Royal Commission into the Building and Construction Industry, which found that the industry was beset with corruption and unlawful practices. The government has acted on the recommendations of that commission. There were 210 recommendations, and already 170 have been implemented.

This industry is worth $50 billion to the Australian economy. There are 700,000 people employed in the building and construction industry across the country. It comprises seven per cent of our gross domestic product. It is a very important part of the Australian economy today. Independent, objective economic research undertaken by Econtech in their report, Economic analysis of the building and construction sector, concluded that, if productivity in the construction sector matched that in the more efficient residential building sector, the level of gross domestic product would rise by 1.1 per cent, the CPI would fall by one per cent and consumers would benefit by $2.3 billion. This is a huge industry, and the implications of further reform are incredible, as are the benefits that can flow through.

The Cole royal commission found that the commercial construction industry was characterised by illegal and improper payments, chronic failure to honour legally-binding agreements, regular flouting of court and industrial tribunal orders, and a culture of coercion and intimidation. Volume 1, page 6 of the commission report says:

At the heart of the findings is lawlessness. It is exhibited in many ways. There are breaches of the criminal law. There are breaches of laws of general application to all Australians where the sanction is a penalty rather than possible imprisonment. There are breaches of many provisions of the Workplace Relations Act 1996.

Frankly, the community and the economy cannot continue to bear the costs of such conduct. The laws of this country must apply equally, across the board, to all citizens, whether they are union officials, employers or employees. The commission also noted in volume 1, page 6, paragraph 16:

These findings demonstrate an industry which departs from the standards of commercial and industrial conduct exhibited in the rest of the Australian economy.

They are saying that it is a special one-off. The commission continued:

They mark the industry as singular. They indicate an urgent need for structural and cultural reform.

It is that clear. That is what the royal commission said—and that is what we are doing. We are acting on the recommendations of the commission.

The Building and Construction Industry Improvement Bill 2003 was the Australian government’s response to the recommendations of that commission. As indicated earlier today, that bill lapsed prior to the 2004 election and then the Building and Construction Industry Improvement Bill 2005 was introduced to the House on 9 March 2005. There have been references to retrospectivity, but let us make it clear that this bill was introduced and made public on that day. It was made clear at that time, in a media release by the honourable minister, Kevin Andrews, that the provisions of that legislation would apply from that day. Union officials, employers and employees became aware of it on that day. The bill was introduced in response to the intense industrial pressure being applied by the building industry unions to force contractors to sign up to union-friendly agreements. That was the motivation for the bill.

The government now seeks to introduce amendments to establish the Australian Building and Construction Commission and other key parts of the bill. I will outline some of the reasons for and elements of the bill. As I said, the commission provided a compelling and unassailable case for the need to reform the $50 billion building and construction industry. The amendments will enhance our response to the Cole royal commission. This legislation is of course part of a package of reform. The bill will establish the Australian Building and Construction Commission and the Federal Safety Commission. The bill will improve the bargaining framework by prohibiting certain coercive and discriminatory conduct and will improve the compliance regime by increasing penalties—and I notice that there has been discussion today on the fact that those penalties are so high. I have no hesitation in supporting these increased penalties. The bill will also enhance access to damages for unlawful conduct.

The Australian Building and Construction Commission will be a new statutory agency responsible for enforcing federal workplace relations laws on building sites. It will operate as a one-stop shop for the building and construction industry by dealing with matters itself or referring them to relevant agencies for action. The commission will improve current arrangements by being able to act promptly on unlawful industrial action and strategically intervene on behalf of parties to provide cost-effective relief when federal workplace relations laws have been breached.

The bill provides specific statutory powers for the commissioner, such as appropriate investigatory, compliance and enforcement powers, including the appointment of Australian building and construction industry inspectors. In terms of our financial commitment, proper and adequate funding has been made available to establish and perform the functions, as I have indicated, of the office of the Federal Safety Commissioner. The initial establishment funding allocated was $2.63 million in the 2004-05 financial year. The allocation to the Building Industry and Construction Commission is $123.93 million to cover the establishment and operating costs until June 2009. We make no apologies about that very significant commitment to the commission. It is a large amount of money and we are proud of that investment.

I was a member of the Senate Employment, Workplace Relations and Education Legislation Committee looking into these bills. We reported in May 2005. It was made clear in that report that the immediate spur to the legislation was the actions of unions, particularly in Victoria, in threatening industrial action aimed at coercing employers to sign enterprise agreements before the current round of enterprise agreements expired. The committee received 11 submissions. We had a public hearing on 4 May with the AIG, the Master Builders, CFMEU, Transport Workers Union, CEPU and the ACTU, and we heard all of their submissions. The AiG gave unequivocal support for the government’s legislation and its endeavours to legislate for peace and stability in the industry. Senator Murray referred to the definition of the building industry and there is a clear answer to that in the merit of the legislation. Yes, there is a broad definition of the building work so it can effectively bring about the structural and cultural change the industry requires. The definition is intended to ensure that the problems endemic in the industry are not shifted further down the contractual chain. An important fact that has not been referred to in the debate today is that the definition of building work is able to be modified by regulation. That has not been noted today. It will ensure that any minor adjustments that can be made, will be made.

What else did the committee resolve, or conclude? I can assure you that the committee noted the CFMEU Victorian branch secretary—from the report in the Age on 13 October 2004 that promised employers that they had a choice—saying they could ‘negotiate industry wide pattern bargaining agreements in 2005 in a peaceful climate or, following the government urgings, in a climate of crippling dispute.’ These are the threats that are being made. This comment was punctuated by language of the kind which deliberately scorns the decency of civilised discourse. Government party senators note this language of class warfare and the proclamation of an image of thuggery and contempt. It highlights the need for cultural change in this industry.


Senator Kemp —Good point.


Senator BARNETT —Thank you very much, Senator Kemp, for that interjection. It is appreciated. The report also made it clear that the Master Builders submission was supportive of the reforms and their submission to the committee included a large amount of evidence of union intimidation, particularly in Western Australia, Victoria and Queensland, and there has been no diminution in the level of industrial action. Unions in the building and construction industry are responsible for about 30 per cent of the total work days lost around the country, even though the industry employs only about 8 per cent of the total work force. Our report provides statistics to support the view that this is a one-off that needs attention. The Australian Industry Group was very supportive of the government’s reforms and, more broadly, of the workplace relations reforms of our government. Heather Ridout and the Australian Industry Group made that clear only a couple of days ago in this Parliament House when they met for their national annual general meeting, and those comments have been well noted. The report is worth a read, but I want to make it clear that the behaviour of the Western Australian and Victorian branches of the CFMEU, in particular, have been noted, targeted and they have been characterised by a confrontational culture which sees industrial relations as a theatre of class warfare.


Senator George Campbell interjecting—


Senator BARNETT —I see Senator Campbell is interjecting and I can understand his reasons for interjecting. But I note that the committee said that, as a consequence, the building costs in Perth and Melbourne are significantly higher than in other cities. The economic and social benefits likely to flow from the reform of the building industry will be quickly apparent and will result in a benefit not only for those cities but also for the whole nation—the whole of Australia. This is why we so strongly support the bill. We want to note that the Labor Party’s opposition is in response to the CFMEU donations of $5 million to that party since 1996 and $47 million from the ACTU. Let me say that there are examples of inappropriate and unlawful conduct in the building industry. There is a litany, in fact, and I could go through all of those but I will just mention a couple. Recently 200 CFMEU members of the Perth to Mandurah railway all took sickies on the same day—it was the so-called ‘blue flu’. This is a common tactic on Western Australian construction sites.

Opposition senators interjecting—


Senator BARNETT —The Labor Party is defending this type of action—listen to them crow! That is taxpayers money down the tubes, as Senator Johnston has indicated. The response of the Western Australian IR minister was to say that they would talk to the CFMEU and hopefully they would have a change of heart. The Cole Royal Commission heard evidence of numerous small contractors being coerced into union pattern agreements by representatives of the CFMEU. This often involved violence, or the threat of violence. This is not on in Australia. This is why we have this legislation—to fix the problem. (Time expired)