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Tuesday, 20 March 2012
Page: 2232


Senator CASH (Western Australia) (12:03): I rise to speak against the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill 2012. In addressing this legislation, let us be clear about one thing. The future of the Office of the Australian Building and Construction Commissioner, the ABCC, under the former Rudd government and the current Gillard government is about one thing: it represents Labor politics in its true form and those politics are traditional payback to Labor's union mates. The future of the ABCC has nothing to do with a genuine attempt on behalf of the former Rudd government and the current Gillard government to address what are actually recognised as issues within the building and construction sector within Australia.

This legislation represents the current Gillard Labor government delivering on a commitment the former Rudd Labor government made to their union mates prior to the 2007 election. In fact, it is rather ironic that the one commitment that the Labor Party actually decide to deliver on, the one promise that those on the other side are very proud to say they are delivering on—and forget the 'no carbon tax' promise, forget all the other promises that the Labor Party made to the people of Australia that they are quite willing to break with no shame at all—is the promise they made prior to the 2007 election and prior to the 2010 election to their mates in the militant union. That is absolutely appalling.

This legislation is the vehicle by which the Labor government will deliver its commitment to the militant union movement that it will abolish the ABCC—that was the promise made prior to the 2007 election and the promise made prior to the 2010 election—with the result, unfortunately, that Australia, which has actually come a long way under the ABCC, will return to what was known rather ironically as the good old days which represented the chaos of the 1980s when the construction industry was held to ransom by union officials.

Let us be clear about what this legislation is intended to achieve. Far from what is stated in its title—the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill—the fact is that the details of this legislation reveal that the ABCC's replacement is nothing more and nothing less than a toothless tiger. Quite frankly, why even bother to have one? You need only look at the legislation and what the new body is actually empowered to do to see that it is effectively powerless.

As a senator for Western Australia, I have particular concerns with this bill and the abolition of the ABCC, for very good reason. Anybody in the Australian public who has read the Cole royal commission report will understand the havoc that the construction union movement has wreaked over the Western Australian building and construction industry for years, and why a strong enforcement body is required. To put my concerns into context, on 26 May 2007, prior to the election of the then Rudd Labor government, the Australian newspaper ran the banner headline, 'Union boss awaits return of ALP glory days.' The article stated:

Most mornings, militant unionist Kevin Reynolds meanders on to the balcony of his stunning riverside apartment, built by his loyal disciples, to take breakfast and read the morning papers. He can look across the Swan River to the cranes that pepper Perth's exploding CBD knowing that should Labor win the next federal election his nemesis—the only authority in 20 years to rein in his hardline and volatile union—will be destroyed. And Reynolds, along with his colourful deputy Joe McDonald, will again have total control over almost every major construction site in the booming West Australian capital. It is a daunting scenario for a construction industry enjoying a relatively strike-free environment since the Australian Building and Construction Commission, which Labor has vowed to abolish, came to town in late 2005.

The article continued:

Reynolds and McDonald have already started boasting about what will happen when Kevin Rudd becomes prime minister and carries out his promise to dismantle the ABCC headed by John Lloyd.

'I live for the day when (the ABCC staff) are all working at Hungry Jacks or Fast Eddy's or Kentucky Fried Chicken,' McDonald told the Australian recently. 'That is what's waiting for them. They're all ex-policemen and they can go and do whatever ex-coppers do. I suggest that John Lloyd and his mates will be unemployed before I will be.'

And he is right. He is right, because Mr Lloyd, the voice of reason within the construction industry in Australia, has well and truly gone, long before Mr McDonald has.

This legislation is Labor finally making good on its promise to deliver back to the union heavies construction sites across Australia. When this legislation passes, as it will, the standover merchants in the militant unions will be back in business. There is a reason the Labor Party has to make good on its promise, and it is because in Western Australia, in particular, it had a small issue. Union heavyweight Kevin Reynolds made it very clear in November 2009 that he was very disappointed with the then Rudd Labor government. It had at the time not scrapped the ABCC. In an article in the West Australian newspaper on 24 November 2009, he was quoted saying:

The national CFMEU would not contribute to the ALP while the ABCC stayed in place, creating an annual $3 million hole in the federal ALP's finances.

As Mr Reynolds said:

The Labor Party makes all sorts of promises to the union to get their money but at least on this promise they're actually delivering.

In relation to this legislation, it is pretty obvious from the comments of the WA union heavies that this legislation has nothing to do with good public policy. It has nothing to do with taking action that is in the national interest, but it has everything to do with the Labor Party doing what it does best—that is, playing second fiddle to the union movement. Putting aside the fact that this legislation is merely a vehicle by which the Labor Party will deliver on a promise it made to the union movement, as a legislator, in determining whether or not this legislation is warranted, one must ask the question: have the circumstances that led to the creation of the ABCC in 2003 changed sufficiently to justify its abolition and the replacement of the industry watchdog with a toothless tiger?

To answer that question you need to put the legislation in context. It should not be forgotten that the ABCC was established only after an independent royal commission. A royal commission is the highest form of inquiry in the great nation of Australia. That royal commission made certain findings, which were: evidence of extensive lawlessness, intimidation and thuggery in the construction sector. That is not the coalition saying that. That is a royal commission that conducted an inquiry into the construction sector.

In relation to my home state of Western Australia, the construction industry in Western Australia was described by the royal commission as being 'marred by unlawful and inappropriate conduct' with 'a culture of fear, intimidation, coercion and industrial unrest'.

The royal commission made 230 findings of unlawful conduct in Western Australia alone, the majority of which were against CFMEU officials and organisers, with Kevin Reynolds and Joe McDonald being cited as repeat offenders for intimidation and threats of violence, breaches of freedom of association, secondary boycott and right of entry provisions, trespass and interference. Mr Murray Wilcox QC, the person chosen by the Labor government to conduct a review into the creation of a specialist division for the building and construction work within Fair Work Australia, actually agrees with the findings of the royal commission—this is the Labor Party's appointed investigator. At page 7, point 9 of his Transition to Fair Work Australia for the building and construction industry report, this is what Mr Wilcox stated:

… there can be no doubt that the Royal Commissioner was correct in pointing to a culture of lawlessness, by some union officers and employees and supineness by some employers, during the years immediately preceding his report. The evidence summarised in the report is too powerful to permit any other view.

The unlawful practices so clearly identified by the Cole royal commission to be rife in the building and construction industry came at a very high economic cost to Australia and Australians. It resulted in higher infrastructure costs, delayed projects—some of which were stalled by months because of strike action—and the development of a culture of fear and intimidation. Because of this, the Cole royal commission recommended structural change that would gradually transform the hostile culture of the building and construction industry. Many years later, the type of conduct found to exist by the royal commission has been reduced. There is no doubt about that. It is also very clear that the culture of intimidation in the building and construction industry has not changed sufficiently to warrant a reduction in the powers of the building watchdog, the ABCC. Again, Mr Wilcox—the Labor Party's appointed investigator—said at page 14 of his report that there is still work to be done to change behaviour in the industry.

The social and economic importance to Australians of the building and construction industry functioning properly cannot be underestimated. The benefits brought by the ABCC whilst it was in operation cannot be underestimated. The ABCC has upheld construction-specific laws, which in turn has seen major economic benefits flow through to all Australians.

The 2012 Independent Economics report explained that higher construction productivity—amazingly—leads to lower construction prices, which flows through to savings in production costs across the economy. The report highlighted the benefits of earlier reforms to the national economy. The report noted that the consumer price index is 1.2 per cent lower than it otherwise would be—again, that is hardly a reason to justify the abolition of the building watchdog; GDP is 1.5 per cent higher than it otherwise would be; consumers are better off by $5.9 billion on an annual basis in 2011¬12 terms; and there has been a significant reduction in days lost through industrial action. To quote Heather Ridout's evidence to the initial Senate inquiry, 'If you look at working days lost in the sector, they have dropped like stones.'

Prior to the ABCC, in September 1996, more than 263 working days were lost per 1,000 employees due to IR disputes, and costs relating to IR disputes exceeded $270 million per year. Enter the ABCC, and what do we see? By March 2007, only 1.5 working days were lost per 1,000 employees due to IR disputes. That is actually a record low. Costs relating to IR disputes plummeted by over 85 per cent. So in September 1996, before the ABCC was enacted, there were 263 working days lost per 1,000 employees due to IR disputes, but by March 2007 that figure had dropped to 1.5 days. That evidence alone should signal to anybody interested in the building and construction industry sector that, with the introduction of legislation that created the building industry watchdog, law and order was slowly but surely returned to construction sites in Australia. It is a travesty for the Australian people and for the building and construction sector that, because of a crass promise made by the Labor Party to its union mates—the one promise the Labor Party has not broken, that it intends going through with—it is going to throw away the economic benefits outlined in reports, which cannot be denied, so that its union mates can be satisfied.

The achievements of the ABCC are without a doubt under threat from this legislation. That is because those on the other side believe that the minority interest groups and militant unions and their money are more important than maintaining law and order in the building and construction industry, ensuring and encouraging productivity and protecting Australian jobs. Based on the figures that we have seen in relation to productivity gains and the decrease in the number of days lost to industrial action, if this legislation is passed in its present form, it will no doubt have an impact on Australians' jobs. That is on top of the carbon tax and the mining tax. On top of everything else, the watchdog in the building and construction industry, which was actually bringing back lawfulness to the sector, is being destroyed by the Labor Party.

One of the other issues that I think goes to the fact that this is nothing more and nothing less than delivering on a promise to Labor's union mates is the narrowing of the definition of building work to exclude off-site prefabrication. Precast concrete panelling is an example of work performed off-site which is excluded under the proposed legislation. You have to ask why. Why would you exclude precast concrete panelling? What could possibly be the reason for that? It is building work, so why is it not included under the legislation we have before us?

The only logical answer is that, yet again, the Labor Party have succumbed to pressure from the AMWU and other manufacturing unions to restrict the effectiveness of the toothless tiger that they are leaving the building and construction industry with, and they are doing so without any regard to industry that is external but essential to the building and construction sector in Australia.

As a Senator for Western Australia and as someone whose state is directly affected by the militant and disruptive tactics of the CFMEU, it distresses me to see that so many Western Australians will have to sit back and, today, watch Labor simply hand back the control of the efficiently functioning building and construction sector to the militant unions and so see it returned to the bad old days of thuggery, intimidation, spiralling project costs and endless strike action. The building and construction industry is far too important to the national economy for us to see this happen. Building and construction workers deserve to work in an industry that is free from thuggery, intimidation and standover tactics. This legislation does not achieve that aim and will put workers in a perilous position, to be used as pawns by the militant union bosses who are the undoubtedly ugly face of the radical union movement in Australia.