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Monday, 11 May 2015
Page: 2668


Senator CAMERON (New South Wales) (10:08): I rise to indicate Labor's opposition to the Construction Industry Amendment (Protecting Witnesses) Bill 2015. The bill will continue state discrimination against building and construction industry workers by maintaining a coercive power that applies to no other Australian worker.

Labor appointed the respected former Justice Murray Wilcox QC, to undertake consultation and prepare a report on matters related to the creation of a specialist division of the inspectorate of Fair Work Australia. Justice Wilcox provided a report to the Labor government in 2009. The report recommended a continuation of compulsory interrogation powers, subject to a sunset clause and an inquiry into their continuance or otherwise. In addition to the sunset clause, checks and balances were included such as the issuing of compulsory attendance for interrogation only by a presidential member of the Administrative Appeals Tribunal. The government must conduct a properly established independent inquiry into the merits or otherwise of extending the sunset clause. We will not support this bill when the recommendation for a review is being ignored for political and ideological reasons.

Six years on, and despite the best efforts of the coalition government to denigrate building workers and their unions, no evidence exists that the continuation of discrimination against building and construction workers is in the national interest.

The government and government senators, in their Senate Education and Employment Legislation Committee report on this bill, made it clear that they want a return to the draconian Australian Building and Construction Commission. The ABCC bill will remove the important safeguards Justice Wilcox identified and Labor enacted in relation to the Administrative Appeals Tribunal. Arguments from government senators that this is simply about extending the operation of the powers under the act are patiently untrue. Just read the coalition senators' report in the bill to see the true agenda.

This is a government that cannot be trusted, a government addicted to deception. I will not repeat the concerns raised by the Parliamentary Joint Committee on Human Rights and the Senate Scrutiny of Bills Committee, suffice to say that none of the deep concerns raised by these joint party committees have been addressed by the government.

The government is determined to trample the human rights and the industrial rights of a group of Australian workers in what can only be viewed as an attempt to increase the share of income going to the profits of the building companies at the expense of building and construction workers around the country.

Is it any wonder that workers' rights are being trashed when the Liberal National Party receives massive election funding from the industry? An example of this is the $430,000 paid to the coalition front company, the Altum property trust, by Walton Construction. This cosy relationship between the coalition and the building industry continued even when Walton Constructions was about to collapse, owing Sunshine Coast subcontractors $2.9 million. This collapsed building company donated more than $1.4 million to the Liberal National Party between 2009 and 2013. Is it any wonder that the coalition want to do the bidding of the building industry?

I would call on Senator Lazarus to consider this outrageous position prior to making any decision to support this legislation.

Queensland workers and Queensland small businesses were ripped off at the same time as the Liberal National Party were pocketing $430,000 of this distressed company's money. This money should have been helping to feed and clothe the families of Queensland construction workers, and it should have been maintaining small businesses in their capacity to employ construction workers.

I call on the Liberal National Party to give the money back to the small businesses and the construction workers who were ripped off by this company. They should do that as a matter of morality and as a matter of natural justice.

This bill is the precursor to extremist industrial legislation. It is being justified as being in the national interest and improving productivity. There is no evidence that this is the case. The approach taken by this government against building and construction workers is nothing more than modern McCarthyism. They have established a royal commission with narrow terms of reference designed to inflict maximum damage on workers' rights to form a union and collectively bargain. They have made allegation upon allegation without evidence or corroboration. They are using parliamentary privilege to name CFMEU officials and to link them, without evidence, to criminal activity—including threats of rape. They have manufactured evidence of productivity gains by funding flawed and discredited econometric modelling. They are overstating the threat to the economy. They are removing individual rights. They are discriminating and intimidating building workers. They are using the so-called 'national interest' to diminish the human rights of building workers. They are favouring employers at the expense of employees. They are legislating to diminish equality at law and they are establishing a biased, politically-driven regulatory body.

The government have used a range of arguments to justify this McCarthyism. They continually use the Econtech report, which was based on flawed analysis, to argue that productivity, industrial lawlessness, health and safety and fatalities have been positively affected by the introduction of the ABCC. The Econtech report and its methodology have been criticised and critiqued by the Productivity Commission, PricewaterhouseCoopers, the Grattan Institute, Professor David Peetz, Justice Wilcox and a range of other eminent economists. The critiques have been so strong that Econtech changed its name to KPMG Econtech and then to Independent Economics. Is it any wonder that this company has changed its name to run away from its flawed analysis?

If ever there were evidence that hired-gun economists will produce econometric modelling to justify their client's case then this is it. There was no magical 9.4 per cent increase in productivity as a result of the ABCC or other reforms. And there was no equally magical seven per cent drop in productivity as a result of the fair work building commission coming into effect—absolutely no evidence.

In their recent productivity scorecard focused on the construction industry, PricewaterhouseCoopers made a number of observations. You would not argue that PricewaterhouseCoopers was a supporter of the CFMEU. But PricewaterhouseCoopers said that growth in labour productivity in the construction industry has tracked closely with the market sector over the past 15 years aside from a dip around the introduction of the GST, when housing construction was brought forward. They went on to say that, in relative terms, capital productivity outperformed the market sector between 1994-95 and 2004-05, due to the poor performance of the market sector generally. However, since 2005-06 it has declined at a similar rate as the market sector. Multifactor productivity for the construction industry has tracked closely with the market sector since 2007-08.

In 2013 Econtech cited a Grattan Institute report as supportive evidence. However, PricewaterhouseCoopers made the following observation on the construction industry and the relevance of external research:

The Grattan Institute notes that at the macro (i.e. economy-wide) level, 'there is no clear link between labour productivity growth and IR laws', and also 'at a firm level there is no obvious link between IR reform and productivity changes.'

Despite these observations, industrial relations (IR) is one of the key productivity battlegrounds in the construction industry.

So PricewaterhouseCoopers said it is a battleground for productivity and that it really has no basis to be that battleground. PricewaterhouseCoopers said:

Much of the focus in recent times has been on the potential reinstatement of the Australian Building and Construction Commission (ABCC).

There has been considerable debate about the degree to which the ABCC is a positive for productivity in the construction industry. A series of benchmarking studies commissioned by the ABCC and the Master Builders Association have sought to portray the ABCC as the driver of improved productivity in the construction industry. These studies have been critiqued and the analysis found wanting on a number of methodological grounds.

That is from PricewaterhouseCoopers, 2013, pages 7 to 8.

The fair work building commission, under its current regime, has selectively chosen data to give the impression that, under the ABCC and the recent iteration of the fair work building commission, workplace deaths in the industry have declined. This is part of a political campaign and political lobbying conducted by the fair work building commissioner, Mr Nigel Hadgkiss. Mr Hadgkiss has been politically lobbying crossbench senators and using flawed, incorrect and misleading overheads in presentations to crossbench senators.

It is disgusting that a so-called 'public servant' would deliberately use selective statistics on workplace fatalities to advance his career and the extremist policies of the government. Using manipulated and flawed workplace fatality statistics as part of a political campaign is disgusting and reprehensible. It demonstrates how low this government and its attack dogs will go to attack collective bargaining and trade unionism in the building and construction industry.

Safe Work data shows that over the period of compulsory interrogations—that is, 2006 to 2009—the rate of fatalities was 32 percent higher than the subsequent period when the compulsory interrogations ceased. The fair work building commission data also suggests that construction has one of the lowest fatality rates of any industry. But many industries are missing from the chart that they use. In fact, over the period 2004 to 2014 construction fatality rates were always above the national average, unfortunately so.

The claim that coercive powers have led to more successful prosecutions and that they are necessary for proceedings to take place is also false. It is based on the data analysis through the various iterations of the building industry tribunal, ABCC and fair work building commission. In fact, more successful prosecutions occurred during the period after 2009, without the use of coercive powers. The arguments for coercive powers do not stack up. Treating building and construction workers differently from the rest of the community is unjustified and unfair.

The government should look at the real issues affecting the building and construction industry. Recent analysis shows that in the last 10 years more than one in five of all insolvency events occurred in the construction industry, with an estimated $2.72 billion owed to creditors in 2013-14 alone. Administrators have reported that in 2013-14 some $137 million was owed to construction workers and their families, including $63 million in superannuation. More than three-quarters of these reports also identify some type of civil or criminal misconduct by a company director. The Australian Securities and Investments Commission reports only two 'enforcement outcomes' under the insolvency category for the full two-year period 2013 to 2014.

The government has cut ASIC's funding by $120 million over four years, with a loss of 209 staff. In the same budget, the fair work building commission received a 17.25 per cent increase in funding, to $34.3 million, including a 32.6 per cent increase in spending on staff. So the enforcement agency for employers gets cut; the enforcement agency against workers get an increase. How fair is that? How tenable is that? This is another example of this government's bias and unacceptable position. Pursuing its ideological vendetta against the trade union movement is more important to this government than ensuring the rule of law is enforced against corrupt employers.

A 2010 report using ASIC insolvency data showed that the six most commonly reported reasons for corporate failure in the construction sector were (1) inadequate cash flow or high cash use, (2) poor strategic management of business, (3) poor financial control, including lack of records, (4) poor economic conditions and (5) trading losses. The big bad CFMEU do not come onto the radar. They are not the issue. The issues are the issues outlined by the ASIC investigation. The sixth area was undercapitalisation. Industrial relations did not make the first six issues.

I want to now turn to the current operation and leadership of the ABCC. I have never seen a more biased, politically driven and incompetent public servant than the current fair work building commissioner. Mr Hadgkiss in his appearances before Senate estimates and in Senate inquiries has demonstrated either that he is incompetent or that he holds the Senate and parliament in contempt. Mr Hadgkiss, in his appearances before estimates and committee hearings, has been evasive, arrogant, contemptuous and incompetent. If crossbench senators approve this bill then they will be giving power to a public servant who will abuse it. Nigel Hadgkiss is nothing more than a puppet of the government. He is the government's attack dog in the industry, using legislative power to intimidate workers exercising their rights to belong to a union, collectively bargain and be safe at work.

Nigel Hadgkiss is the perfect example of the problems of regulatory capture. According to the Australian National Audit Office in its Administering regulation: better practice guide:

regulatory capture—occurs when an official inappropriately identifies with a regulated entity's interests rather than the public interest

I was absolutely gobsmacked when during the February additional estimates I asked him whether he had heard of regulatory capture. The exchange goes like this. I asked Mr Hadgkiss:

… you meet with the industry players on a regular basis—some 50-odd times—and you have got Master Builders providing training for your people. Have you heard of a regulatory capture?

He replied: 'A what, sorry?' I responded: 'Regulatory capture.' Mr Hadgkiss said:

I am not sure what you are talking about, Senator.

I asked again:

You do not know what a regulatory capture is? I think Mr Corney is trying to explain it to you.

Mr Hadgkiss conceded:

I am not familiar with it, Senator, no.

In disbelief, I asked again:

You are not familiar?

Mr Hadgkiss said no. This is a regulator with immense power overseeing an industry where employers have significant power and control over their employees. This is an industry that has captured the regulator. The regulator has absolutely no clue about the serious implications of this failure of leadership. For a regulator to have no understanding of regulatory capture is beyond belief. This simply demonstrates that Mr Hadgkiss is unfit for office. (Time expired)