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Wednesday, 15 February 2017
Page: 947


Senator MARSHALL (Victoria) (12:08): I want to thank the Minister for Employment, Senator Cash, for obviously looking at the speaking list, realising that I was about to get on my feet, and racing down as quickly as she could to hear me speak on the Building and Construction Industry (Improving Productivity) Amendment Bill 2017.

Senator Cash: Absolutely.

Senator MARSHALL: You know I am about to make a compelling argument. And given the number of backflips that have taken place through this legislative process on this bill and related matters we will not be surprised that after listening to me you want to come and negotiate with the Labor Party and we put this bill to bed and send it back to the House of Representatives unpassed. I am available, and I am at your disposal for that to happen, Minister.

We need to understand that around a decade ago this parliament passed the Fair Work Act. It was passed with the support of the now government but then opposition, the Liberal-Nationals coalition. Since then, workers and employers have been legally negotiating agreements that suit their circumstances and apply to the building industry or any other industry where negotiations take place. Those agreements have been negotiated within the law. In many instances—in the construction industry in particular, because that is what this bill is about—unions and employers have negotiated ratios of apprenticeships. We know there is a severe shortage of skilled tradespeople in this country. And with big jobs, especially government-funded jobs, they have negotiated that where there is a certain number of tradesmen there will be an apprentice. That is the way we keep our skills training base up. It reduces the need to import overseas workers to fill those skills gaps. We are happy to do that when we have the skills gaps, but it is incumbent upon us to ensure that we fill those skills gaps ourselves. So, that is a common clause in many agreements.

A common clause is also that Australian-made material should be used wherever possible—for instance, Australian steel or Australian protective clothing. That is a legal clause in many, many agreements, particularly in the construction industry. Clauses have also been negotiated about limiting the time you can be casual. Casual employment is for top-up, interim workforce needs. But what we have seen over a period of time is that people are just put on as casuals—they are employed by the hour—and it is not casual employment at all; it is full-time employment, but they are just paid as casuals. So, there is no security, and they cannot go to the bank and get a loan, such as a car loan. It is no way to be able to plan your life.

So, many agreements have said that you cannot be employed for more than six weeks as a casual. One would think that if you are employed for six weeks as a casual then the job is not casual but is much more permanent than that. That is a legal agreement that has been negotiated in these clauses. Often agreements also include clauses that say that as the job winds down the people who should be put off first are those who were employed on a temporary basis—457 visa holders, for instance—who are there to top up a skills shortage, and as the skills shortage removes itself then those should be the first people put off. That is a legal clause.

But last year, with the passing of what we all refer to as the ABCC legislation, a clause was put in that made it retrospectively illegal if you wanted to apply for government-funded work or partially government-funded work. Clauses that were legal one day could not be in place if you wanted to tender for government-funded work. It had a retrospective application. So, what was normal practice, what was absolutely legal with the passing of the bill last year, became effectively unlawful if you wanted to bid on those jobs. And of course some of the government-funded works, partially or wholly, are some of the biggest jobs around. Most builders and most contractors want to be able to bid for that work, but there are thousands upon thousands of agreements that were legally negotiated and that are still in force that now exclude those people from bidding for work.

So, last year amendments were moved to say, 'Well, we know it's retrospective, but we'll allow two years for people to renegotiate those agreements'—and these are not things that can simply happen overnight; workers want a say in what they are renegotiating and employers want a say in what they are renegotiating, and negotiations have to take place. It is not something that just happens straightaway. And even though I completely oppose the bill as unnecessary, the two-year clause acknowledged that this bill had retrospective effect. It was making something that was legal one day illegal the next day for those wanting to bid for any government-funded or partially government-funded work. It acknowledged that. I do not know why it was two years. We know the department did not recommend that, and I do not recall anyone asking for that. But Senator Hinch advised us on Monday that he met with the Prime Minister, and the Prime Minister put a date on a piece of paper two years from the passing of the bill and slipped it across the table to Senator Hinch, and Senator Hinch looked at it and signed it.

The Prime Minister's proposal was to have a two-year period in which people had an opportunity to negotiate new agreements so they could tender for work. These are existing agreements that are legal, in place and legally negotiated and that could be used while they tendered for government work over that two-year period. Most people would say, 'That sounds more than reasonable.' And so people continued on in that process until we get here this year. Apparently over Christmas, Senator Hinch spoke to some people and changed his mind, saying that two years was too long and he wanted to make it nine months. And here we are.

Even though it was the Prime Minister's idea to have two years, they have now decided to make it nine months, which effectively makes the agreement retrospective from Day 1. That is because tenders cannot simply be put in overnight. In the building and construction industry you have to cost the job, you have to look at the material costs, you have to look at a whole range of factors and so a tender takes some time. For some of the bigger jobs you can spend hundreds of thousands of dollars on tender documents and, in fact, on really big infrastructure projects, big companies would spend more than $1 million simply on the tender document just so they can tender.

Who is going to tender for any of this work when you only have nine months? It takes some time to establish the tender and then the tender has to be considered, but unless you have an agreement that is code-compliant by the end of the tendering process—and there is no certainty that that will happen—you cannot tender. In effect, this says to every builder: 'Unless you have a compliant agreement right now, don't bother to tender.' Why would you spend money tendering when you don't even know if you can be awarded the contract? Why would you do that? Why would you invest money which is potentially completely wasted? This is the ridiculous process that we find ourselves in. Is the government simply hell-bent on saying, 'We want our restrictive clauses in the code to apply effectively from now'? It does not matter that there are thousands upon thousands of agreements that are legally in place and legally binding right now.

If you cannot change your agreement—and one party cannot do that arbitrarily—you cannot tender for government work. How is this? If you do not want to tender for government work, you can say, 'We should give preference to Australian-made steel and Australian-made protective clothing.' But if you are going to take any government money on any building projects you can't do or say that. There is no way the government is going to spend money if someone has an agreement which says preference should given to Australian-made materials, to Australian-made health and safety equipment. That is a great government looking after as all, isn't it? A great government!

Perhaps you want to ensure that this country has another generation of skilled tradespeople, but if the government is going to be paying you, it will not let you do that. There is no way is the government going to spend money ensuring that this country will have the skills that it needs for the future. No way! That is a government looking after our interests, isn't it? They are so beggared by their ideological hatred of the trade union movement that they are prepared to make this industry unworkable and to sacrifice good policy—good clauses in good agreements—for that end.

Let's understand that this is what that is all about. Ever since the day that they supported the Fair Work Act, they have been trying to walk back from it. This bill before us today amends the ABCC Act, which was one of their steps in walking away from it, and this is another. It is about ideology. I do not like the bill, but if it is there—it is not about ensuring people are not caught up and disadvantaged by the retrospective nature of its application. This bill takes away an existing opportunity. It is a ridiculous proposition. The government and the parliament should not make laws that allow you to do one thing on one day—to have something that you legally entered into—and, if you want to apply for government work, make that invalid the next day. They insist on nine months, but as I have said it is a ridiculous time frame to negotiate, register a new agreement and put in tender documents. It is just not going to happen. You might as well say that there is no leeway at all.

The government argues that it put out a draft code in 2014 and so industry participants all knew that this is what the government wanted to do. It is an argument I hear, but twice during that period—between then and now—the parliament rejected those bills. Wouldn't you think: 'Well, the government put out a draft back in 2014, which had to be underpinned by legislation but that legislation was defeated by the parliament twice.' Doesn't that suggest to you that you wouldn't not be bound by that? What you are doing is legal and it suits your interests. Many builders and certainly all the unions want to support this country with clauses that give preference to Australian-made materials. That is a good thing, but for the government to say, 'You can't have that if we are paying the bills or part of the bill, you can't have that.' Those agreements, which were legally entered into, must be allowed to stand over a transition period.

Most agreements are negotiated for a three-year period. My personal view is that, if you have an agreement in place and you want to bid for Commonwealth work, you should not have to comply with this code until your agreement has expired and you negotiate a new one. It should be a very transitional arrangement. But two years is two years, and we are now not even going to have that. As I said, this legislation is primarily about the ideology. I think it is a disgrace. I think the government should accept their Prime Minister's original proposal of two years. It was his idea; but, as we have seen time and time again in this parliament in particular, what the Prime Minister may say is never supported by his party. This is another example of Mr Turnbull saying 'two years'—a two-year transition period—writing it on a piece of paper and slipping it across the table to Senator Hinch, but then his party and Senator Hinch change their minds and say: 'No. Just because it is the Prime Minister's idea we're not backing that.' So we get to the situation where we have a problem.

Why nine months? Again, it just seems like another arbitrary figure. No-one has told me that the Prime Minister has crossed out 'two' and put nine months and slipped it across the table. At the hearing on Monday, I asked the department whether they provided any advice to the government about what would be an appropriate transition time, and the answer was no. The department did not provide any advice. I asked the department how many agreements this would impact on. They had no idea. They did not know. This is a great way to make policy and then rush it into the parliament for us to legislate on when the department cannot even advise the government on how many agreements this policy will affect. My view and the evidence that I have seen suggests it will affect many, many thousands of agreements. I think the CFMEU said they were looking at 3½ thousand agreements which they are respondents to. I could stand corrected, but I thought it was in that order. I know that in the electrical industry it is many thousands. I know that there are 900 non-compliant agreements alone in Victoria. When you look at the plumbing industry, it would be on the same scale. Even if we were able to get negotiations happening quickly, the Fair Work Commission could not deal with all of those agreements in the nine months, anyway.

Again, this is just a figure that has been plucked out of the air. It does not seem to have any basis. It is simply about getting this code in place and it operating as quickly as possible to the detriment of companies that have lawful enterprise agreements and that still might like to bid for Commonwealth funded or partially funded work—but they cannot, even though they have legally negotiated those agreements. Those agreements still stand legally, but the companies cannot bid for any government-funded work. What does taking out so many people from being able to bid in the first place do? It means less competition, more cost. Ultimately, that is the potential outcome. You are reducing the number of builder-contractors who can bid for particular jobs, and the cost will go up. I cannot say for sure that will be the outcome but it looks like a logical outcome to me if you take away the competition. Virtually every builder-contractor of any significant size that is tendering for the larger jobs would have already negotiated an agreement. They are not going to spend money on tendering for a job that they may be excluded from, even if they are the best contractor, at the best price and with the best ideas on how to do it. They may be excluded from all of those things purely because they do not have a new agreement to interrupt the old legal agreement that is in place.

The government should reconsider this legislation. The crossbenchers should also reconsider it. I prefer that they just vote the code down completely—disallow it. The parliament settled on two years last time. That is where we landed. Everyone has been working on that basis since then, and now we are going to change the rules again. This Senate should reject that approach and it should oppose this legislation.