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Thursday, 25 March 2004
Page: 27297


Mr ANDREWS (Minister for Employment and Workplace Relations and Minister Assisting the Prime Minister for the Public Service) (3:22 PM) —by leave—One year ago, before this House, the government tabled the final report of the royal commission into the building and construction industry.

One year ago, the government committed to restoring the rule of law in this industry.

One year ago, the government put this industry, employers, employees, unions and governments on notice. The time has come for this industry to bite the bullet. The time has come for this industry to abide by the same laws that apply to all industries and all Australians.

Some in the industry claim the royal commission was established to attack the union movement and that it was biased towards employers. This is not true. The findings of the royal commission present a compelling and unassailable case for reform. The evidence presented before the royal commission cannot be ignored. It is the responsibility of government to ensure that this industry abides by the same laws that apply in other workplaces.

The royal commission found the building and construction industry is characterised by illegal and improper payments, threats of violence, chronic failure to honour legally binding agreements, contempt for commission and court rulings and has a culture of coercion, harassment and intimidation. This industry has been and continues to be crippled by lawlessness.

The royal commission called on all parties in the industry—employers, employees, unions and governments—to clean up this important industry.

This government is determined to pursue the reform necessary to assist this industry to reach its economic potential. This industry is vital to the Australian economy and the illegal conduct of unions and employers is forcing up costs, which, at the end of the day, are borne by all Australians.

The `rule of law' must be returned. The unions and the Labor Party have ducked and weaved and obstructed the efforts to reform this industry. They say there are no problems, things have got better and the industry can fix itself up.

The Labor Party has said it will ignore the findings of the royal commission, the highest form of judicial inquiry. Instead the Labor Party, including those Labor senators on the Senate inquiry, side with the CFMEU union bosses and turn a blind eye to the illegal and unlawful conduct in this industry.

Today I will table proof that what the royal commission uncovered (and what those in the industry know) is true.

I have received a report from the interim building industry task force on the state of the building and construction industry and the work of the task force. The report is not good news. It paints a very disturbing picture. It shows that there are still problems. Things have not got better and the industry, one year on, has been unable to fix itself.

The report which I am tabling today, Upholding the law—one year on: findings of the interim building industry taskforce, should be a matter of concern to all Australians. The report shines a light on the dark side of the building and construction industry. It highlights that unlawful and inappropriate behaviour continue to beset the building and construction industry.

It provides a sad indictment on the industry, which has the potential to be great but which is hamstrung by endemic, illegal and improper conduct. The task force has:

conducted almost 400 investigations, resulting from some 1,500 complaints to its hotline;

initiated 13 prosecutions; and

had five cases finalised in the courts, a 100 per cent success rate, including successful prosecutions against employers.

As the case studies cited in this report clearly demonstrate, the Cole royal commission did get it right. Let me just quote from a few. In relation to this industry's contempt for the law:

On 8 October 2003, there was a mass union meeting held to discuss the Building Construction Industry Improvement Bill 2003. Approximately 10,000 construction workers were in attendance. Commissioner Harrison, of the Australian Industrial Relations Commission, had already handed down a return-to-work order on the previous day, 7 October, expressly stating that all workers were to return to work upon the conclusion of the meeting. When this order was read out at the meeting, the assembly simply laughed and proceeded to pass a motion to take the remainder of the day off. The Taskforce is currently investigating 22 head contractors and substantially more subcontractors who appear to have unlawfully paid strike pay on that day.

In relation to violence, thuggery and intimidation:

In March 2004, the Taskforce received a complaint from a glazier being threatened that, if he did not sign a union-endorsed EBA, all of the glass he had already installed on a building site would be smashed. At the time of writing, the glazier was still considering whether to proceed with his complaint.

In another recent report, a head contractor was assaulted by five officials from different unions for not succumbing to union demands. As a result of this assault, the State police attended the scene. The head contractor subsequently surrendered to the union demands because of the economic reality that if the dispute continued, he would become bankrupt.

In relation to donations to the union:

In the latter part of 2003, a subcontractor was required by a union official to purchase t-shirts, bearing the union logo, at a cost of thousands of dollars per item. The subcontractor provided payment in return for access to the site where he could continue his work. This type of activity is common on sites throughout Australia. The clothing company awarded these clothing contracts is owned by the wife of a union organiser.

In a matter investigated by the Taskforce in February 2004, a subcontractor was charged $1,000 by a union for each of the seven days he worked on a site. The official demanded this payment because the subcontractor did not have a union-endorsed EBA. The subcontractor was issued with receipts that indicated the payment was for t-shirts.

If this report is not enough to convince the Labor Party to stop their mindless opposition, to get out of the way and let the government get on with reforming this industry, I also draw to the attention of the House that this sector continues to have one of the worst records of industrial disputes.

In 2002, the building and construction industry had a strike rate almost seven times that of all other industries combined and accounted for about 40 per cent of industrial disputes across the country. Figures for the 2003 year suggest a slight improvement, and I believe this is in no small part due to the efforts of the task force. However, it is still unacceptably high: six times the strike rate of all other industries combined and accounted for 30 per cent of industrial disputes across Australia. This industry is still the worst affected by industrial disputes.

The occupational health and safety performance of the building and construction industry continues to be something of which all Australians should be ashamed and which the Australian government, for its part, is determined to improve. The construction industry ranks in the top three of all industries for the number of injury and disease related fatalities in the workplace. It also ranks in the top five for incidences of workplace injuries and disease. All employees, especially those in the commercial construction industry, have the right to expect a safe workplace. To improve occupational health and safety performance in this industry, behavioural and cultural change is vital and should be a priority above all else. Unfortunately, the industry's continued inability to deal with safety issues effectively means there are many accidents and injuries that could have been avoided. The Australian government, as a major client of the building and construction industry, is well positioned to drive such change.

The building and construction industry is critical to the welfare and prosperity of this nation. Everything we buy, consume or use has a building cost component. If we can improve the building industry's culture, we can reduce the future costs for every Australian consumer and improve the productivity of our economy.

In 2002-03, the building industry was a $46 billion-a-year industry, accounting for nearly six per cent of Australia's gross domestic product and employing over 730,000 people.

Independent research has estimated that the construction sector is up to 40 per cent more expensive than the housing sector to do the same building jobs.

Costs of building are higher in some states than in others. Last week, Daniel Grollo, the managing director of Grocon, was quoted in the Australian Financial Review as saying that Victoria's industrial climate had put the local construction industry behind the rest of the nation and that Victoria's construction times were about one-and-a-half times those of New South Wales.

Mr Grollo said `...this can clearly be targeted at the culture that exists in Victoria and the work practices.'

These extra costs, borne by all Australians, present one of the most compelling reasons for reform in this industry. In fact, independent research has shown that improving this industry's workplace practices would boost Australia's economy by $2.3 billion a year.

Econtech, the respected analyst, has found that if labour productivity in the commercial construction sector matched that in the domestic housing sector, the CPI would be one per cent lower, GDP would be one per cent higher and consumers would enjoy an additional $2.3 billion in economic benefits each year.

The time for talking is over. If these economic benefits can be grasped through a process of regulatory and cultural reform, it would deliver real and ongoing benefits for all Australians. Reform must be structural and cultural, and directed to the specific problems of this industry.

The Labor Party has walked away from the need to reform the building and construction industry. The Labor Party has the luxury of not having to act in the interests of all Australians. It would be irresponsible of the Australian government not to tackle the problems of the construction industry.

If the Australian government could save just one per cent of its annual $5 billion construction bill, there would be $50 million more each and every year to spend on schools, doctors, roads and national security.

Beyond the manifest economic benefits, all industry participants will benefit from being able to work in an industry that is free from coercion and intimidation—an industry where they are allowed to exercise genuine choice about whether or not to join a union or to enter into a particular type of employment agreement.

As the West Australian said this week:

A worker's ability to negotiate directly with the employer is a simple democratic right which should be protected at all costs.

All industry participants, including workers, will benefit from working in an environment in which laws are respected and obligations are complied with. No-one is above the law. Laws must apply to all citizens whether they be union officials, employers or workers.

Reform of the building and construction industry is something the Australian government cannot and will not ignore.

The government has moved swiftly to implement the royal commission's recommendations. In recognising the real need for reform this government, following the royal commission recommendations, introduced specific legislation aimed at reforming the building and construction industry.

This legislation was passed in this House on 4 December last year, but is now stalled. It is the subject of a Senate references committee inquiry consisting of five Labor senators who have all been given their orders by Labor's shadow cabinet, which has already resolved not to implement any of the royal commission recommendations. The double standards are breathtaking.

This government, however, will not stand still on reform. This government is committed to genuine cultural and structural reform that this industry so desperately needs. Federal and state governments from both sides of the political fence have made attempts in the past to reform the industry, but all have failed. This government will not repeat the same mistakes. Having separate industry specific legislation is the key to bringing about the changes long overdue in this unique industry.

The industry does want change but is ill-equipped to initiate and deliver it on its own. The government will not allow the tactics of delay and misinformation by the Labor Party and its union bosses to distract us from the need to bring the much needed change.

The task force is one such way to give the industry a helping hand. Some people have the view that as the task force is titled `interim' there is no need to take it seriously—that it will go away in the same way as other attempts to reform this industry have in the past.

So that there is no misunderstanding, no confusion, no mixed signals, so that it is clear to all that the government is serious about reform, the interim task force will now be established as the `Building Industry Taskforce'. It will continue to operate until the Building and Construction Industry Improvement Bill (and the establishment of the ABCC) is passed by this parliament.

The task force with a strong contingent of inspectors will continue to make its presence felt in the building industry. The task force will use all of its powers to uphold the law. The task force which will continue to shine a light on the dark side of this industry is another step toward achieving lasting and long overdue reform in this industry.

If the Labor Party continues to delay the passage of the bill, the government will also pursue the use of alternative arrangements to establish the federal safety commissioner to address the significant occupational health and safety issues within the industry. For too long safety matters in this industry have not been taken seriously with bogus claims being made by unions to force illegal industrial action on employers. Safety is a serious issue and this government is serious about improving safety outcomes. We will do this by requiring best practice on Australian government construction sites.

This government is also concerned with evidence that suggests employee entitlements are being neglected by cowboy employers. Employers are and must be legally responsible for their employees' entitlements. Employees need to be assured that if they go to work these entitlements will be paid to them.

To deal with rogue employers who do not meet their obligations, the Office of Workplace Services will target the building and construction industry firstly in Victoria, New South Wales and Western Australia with education and compliance programs to ensure employers meet their and employees get their legal obligations.

This is in addition to action already taken by this government, across all industries, to protect employee entitlements. This government has been the first to seriously address the issue of employee entitlements lost on insolvency. To date more than $168 million has been paid to over 29,000 employees under this government's GEER scheme.

In addition, I will be writing to small and medium size businesses to ensure they are aware of assistance available to them on any workplace issues, wages and conditions, health and safety, taxation or training.

This industry is in desperate need of reform. The government is doing and will continue to do its bit to clean up this industry.

The Labor Party do not want to acknowledge the problems that exist within this industry. Their hands are tied by the union bosses.

It is not a very hard choice for this government—a choice between continued unlawful behaviour costing all Australians billions of dollars and a commitment to lasting reform.

This government has made its choice.

We say to the Labor Party: stop allowing this unlawful behaviour to continue. The challenge for the Labor Party is to start acting in the interest of all Australians and pass the BCII Bill.

One year ago the royal commission prepared case studies from evidence heard of unlawful and inappropriate behaviour in each state and territory. Many were cases where serious breaches of the law had been identified.

One year ago the Attorney-General's Department referred these matters to relevant state and territory governments for investigation and swift and appropriate action.

It is a matter of grave concern that, one year on, the state and territory investigations on these matters have still not provided a finalised outcome.

Why have state and territory governments failed to act upon these referrals when they committed to do so?

I am urging the state and territory governments to do what they said they would and finalise these matters as it is in the best interests of good government to do so.

I will be writing to all relevant state and territory ministers and asking them to advise the Australian government and the Australian people why they still have not done anything about the matters referred to them.

I would like to end today by quoting someone who some 14 years ago recognised that this industry desperately needed reform. He said:

Friends, this industry is going to have to bite the bullet at last. If this country wants to be efficient and productive, everybody has to undergo the reform process—and most especially an industry which has such pressuring and demonstrable need for it. So reform in the construction industry starts now ... Let me make it clear that the Government is committed to real microeconomic reform in the industry. The aim of reform is to produce real savings in productivity and efficiency to encourage greater investment in the industry. It entails taking on issues long regarded as too hard but who settlement is crucial to the performance of the industry. By this I mean issues as poor employment relationships, restrictive work practices, lost time, the adversarial approach to industrial relations in the industry ...

This is not a statement from a coalition minister. This is a statement from Senator Peter Cook, the Minister for Industrial Relations in 1990. If only he and the Labor Party had still had the moral courage to stand by this commitment.

Unlike the Labor Party, this government will not resile from the need to ensure that the rule of law must apply in this industry as it does everywhere else.

I present a copy of my ministerial statement and the following paper:

Upholding the law—one year on: findings of the interim building industry taskforce

I move:

That the House take note of the papers.

Miss JACKIE KELLY (Lindsay—Parliamentary Secretary to the Prime Minister) (3.44 p.m.)—by leave—I move:

That so much of the standing and sessional orders be suspended as would prevent Mr Emerson speaking for a period not exceeding 20 minutes.

Question agreed to.