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Monday, 17 August 2015
Page: 5378


Senator ABETZ (TasmaniaLeader of the Government in the Senate, Minister Assisting the Prime Minister for the Public Service and Minister for Employment) (11:28): I thank honourable senators for their contribution to this debate. I also indicate that, in the event that the second reading is supported by honourable senators, I will be seeking to adjourn further debate—namely, the committee stage—for further discussions to take place.

Prior to the 2013 federal election, the coalition committed to re-establish the Australian Building and Construction Commission to restore the rule of law to a sector that is plagued by lawlessness, intimidation and thuggery. The government consulted widely seeking feedback on this important policy to identify issues which need to be addressed.

The construction industry is critical to a productive and prosperous Australia and is vital for jobs. It is the nation's third largest employer, with more than one million people employed by the 100,000-plus predominantly small and medium businesses. The sustainability and success of the construction sector are crucial to the Australian economy and to the Australian people.

The need to re-establish the ABCC is clear and evident. This industry, regrettably, stands apart from others in terms of its industrial unlawfulness. For far too long there has not been a meaningful consequence in the construction industry for doing the wrong thing. Who is then surprised that this has resulted in a culture where complying with the law is taken to be merely optional? Industrial laws and penalties in this industry are seen as no more serious than a parking ticket where the fine is paid, the cost charged to the client or union members and the offending conduct repeated again and again. Since 2005 the courts have imposed fines of over $6.1 million on CFMEU related unions and officials for proven breaches of the law, but even this has not been enough to deter those activities from continuing—remembering that these are breaches of laws that have passed through this chamber but are yet ignored. The Federal Court recently spoke of the CFMEU's 'outrageous disregard' for 'Australian industrial norms'. The court also cautioned that breaking the law should not be seen as 'nothing more than an affordable price of doing business'. Yet, because Labor and the Greens slashed the maximum penalties for industrial wrongdoing in this area by two-thirds, that has only promoted the CFMEU's business model of breaking the law.

Re-establishing the ABCC is about introducing a meaningful consequence for unlawful industrial conduct in the construction industry, whether by unions or employers. It is about bringing about a needed change in the culture. When there is an effective regulator enforcing laws with meaningful penalties, there will once again be a deterrent for breaking the law, and those who would previously have done the wrong thing, simply because they could, will think twice.

While the ABCC existed, the performance of the construction sector improved. The ABCC contributed to economic benefits for consumers, higher levels of productivity and fewer days lost to industrial action, and we saw an increase in respect for the rule of law across the country. This benefited all law-abiding workers, unions and employers and the taxpayer.

Labor abolished the ABCC in 2012 and replaced it with a significantly weakened regulator. Labor slashed its budget by $9 million each year, making it even more difficult for the independent regulator to do its job. What flowed from Labor abolishing the ABCC was entirely predictable. Almost immediately we saw the CFMEU shut down parts of the Melbourne CBD for days on end in defiance of Supreme Court orders. Who can forget seeing on the news footage of protesters yelling abuse and threatening workers trying to get to work—workers who were actually members of the CFMEU, by the way—or protesters attacking police horses? All this while, CFMEU officials actively promoted this ugliness.

I am amazed that certain Labor and Greens senators opposite sit in silence when faced with such conduct and do not immediately condemn such abhorrent and repeated unlawful and thuggish behaviour. If the Senate were faced with such unlawfulness in another part of society as has been seen in the construction industry, there would be an outcry, and rightly so, yet we have silence from those opposite in respect of the construction sector. There are currently 69 CFMEU representatives before the courts or the Fair Work Commission, and the courts have time and again commented that the CFMEU simply shows no contrition despite repeated penalties being imposed on it for its wrongdoing.

The current system is simply not effective. It was only on Friday last week that a Federal Court judge fined a CFMEU official for his contempt in ignoring the court's orders. The judge said:

The CFMEU has a significant history of non-compliance with the provisions of industrial legislation … I have remarked upon the fact that each of the individual respondents' conduct indicates that each—

with the exception of one individual—

simply did not care about complying with the entry provisions.

In that case, the court found that the CFMEU officials had threatened to go to war against the subcontractor if he did not employ a CFMEU official and put him on the payroll. This was last week in South Australia, not some historical reference to the former BLF. This was a decision of the Federal Court in Adelaide just three days ago.

It reminds me of an earlier case where a CFMEU official was found to have said to a contractor in Victoria:

Everything works on a bit for youse and a bit for us. Forget about the law, … right?

Another CFMEU official in Queensland was found to have told a group of contractors who had been prevented from working because of the union blockade:

You've all got a long time left in the industry, and we can influence your future jobs.

When one of the subcontractors asked, 'What are the consequences to my business if I bring my boys on site?' the union official replied:

You want to know what the consequences are? You would be committing industrial suicide.

I am sure senators from South Australia, Victoria and Queensland in particular would join me in condemning these examples of the disregard shown for the laws of this parliament in their home states.

Regrettably, these are not isolated incidents. They disclose a culture in the construction industry of wilful defiance. The list of examples continues. Only last week, there were allegations finally explored in the Royal Commission into Trade Union Governance and Corruption over the conduct of the CFMEU—listen to this—in siphoning off half of all employer EBA payments meant for a drug and alcohol facility straight into the CFMEU's own coffers.

In another example of the graft revealed in evidence, the CFMEU had skimmed $80,000 of a $100,000 donation by a construction company to a drug and alcohol facility. The CFMEU took an unauthorised 80 per cent donation for itself. Yet Labor and the Greens would say, 'Nothing to be seen here; move right along. We don't need to deal with this.' This conduct shows there are elements in the industry, particularly in the construction division of the CFMEU, that are more interested in exercising their power over overs and lining their own pockets. I would also say that I think employers have a huge responsibility here. But one suspects these payments are simply made to buy some industrial peace and whether the money gets used for drug and alcohol purposes is a secondary consideration.

I will move on to the point of safety. The act that established the former ABCC, the present bill and Labor's Fair Work Act have the same standard of safety in respect of stopping work over safety concerns. The proposed ABCC legislation uses the very same standard on safety that Labor put in its Fair Work Act and which currently applies in the construction industry. Incidentally, this is the exact same standard which was previously included in the former ABCC legislation. This bill does not contain any provisions that would prevent legitimate safety issues in the building industry from being raised and addressed by employees, unions or state and territory work, health and safety regulators. I also note that the bill retains the role of the Federal Safety Commissioner and the Australian government's building and construction industry work, health and safety accreditation scheme. The misrepresentations over this important issue should be seen for the shameless tactic it is; namely, to deflect and distract from their unlawful industrial conduct.

On the issue of the compulsory powers, I have made it clear many times in this place that they are similar to powers that Labor gave to the FWBC. And Senator Xenophon outlined that the powers that the ACCC, ASIC and APRA have are very similar, other than there are a lot more safeguards under this legislation.

A very important aspect of this legislation is that it will remove the absurd and unprincipled restriction on the current regulator to which no other Commonwealth regulator is subject. This is in fact without precedent. This restriction prevents the regulator from commencing or continuing legal proceedings if private industrial parties reach a 'settlement' in their own interest. This put private interests above the public interests. When this absurd restriction was forced through this place by Labor and the Greens even the Law Council of Australia condemned such a restriction on a public regulator. This private settlement arrangement is subject to abuse. It is the equivalent of the Fair Work Ombudsman being unable to prosecute an employer guilty of underpaying a worker because the worker and employer reached a confidential settlement which could be for a nominal sum of $1. This also has the perverse outcome that, once wrongdoers achieve what they set out to achieve through unlawful means, they have an added incentive to coerce parties into confidential settlements so the public regulator cannot prosecute.

We recently saw an example of how this absurd restriction played out in Queensland with respect to the nine-week strike at the Lady Cilento Children's Hospital site. Just before the judge handed down his decision on wrongdoing over the nine-week stoppage, the CFMEU and ETU entered a confidential settlement with the builder; meaning the FWBC was unable to take any action in the courts in respect of the nine weeks that were lost on that important public project. At the end of the day, the regulator was legally prevented from enforcing the law and the taxpayer was left to foot the bill. If such a restriction on enforcing the law in the public interest were imposed on the police, on the Fair Work Ombudsman or the ACCC, there would be an outcry from those opposite—and rightly so. Yet, when the favour is done for the benefit of the construction unions, which are significant donors to Labor and the Greens, there is simply shameful silence from those opposite.

Any objective observer can recognise that there is a particular problem in this industry; yet the ABCC was regrettably abolished before it could achieve a lasting change in culture in the industry. I recall at one time the construction union was crying for 'one law for all' in arguing for the abolition of the only regulator that was keeping it in check. When one considers the appalling rap sheet of the CFMEU and its litany of regular and repeated industrial contraventions, it is clear that the CFMEU has no credibility when it calls for the application of 'one law for all'. It ignores Supreme Court injunctions. It ignores orders of the Fair Work Commission. It thumbs its nose at the rule of law, which it says everybody should abide by. The FWBC reports that it now has more cases before the courts than ever before. As I said a moment ago, there are currently 69 representatives before the courts. More than 90 per cent of FWBC cases before the courts involve allegations of wrongdoing by the CFMEU. Is anyone surprised that the ABCC, which was effectively started to hold the CFMEU to account for breaking the law is opposed by the CFMEU?

There has been the suggestion that, as a solution, we should deregister the CFMEU. I would make three points. Firstly, when the Builders Labourers Federation was deregistered in the 1980s it was a Labor government, with the support of a responsible opposition, that passed the legislation. The fact is that the current Labor opposition and the Greens are so beholden to the CFMEU that they would not support such a measure. Secondly, the deregistration of the BLF did not solve the problem of the culture in the industry. Here we are again dealing with the BLF by a different name and once again facing endemic industrial unlawfulness in the industry. Former BLF tactics have simply migrated to the CFMEU—which leads me to my third and key point.

The purpose of the ABCC is to introduce into the industry the concept of respect for the rule of law. The ABCC will work to introduce a culture in which any party, whether an employer, employee or union, accepts that they must comply with the laws set by this parliament. Indeed, I am reminded that just last week Baulderstone, a major construction company, was fined for having demoted a worker where the only reason that could be proffered was that this worker had resigned from the CFMEU. This sort of cooperation behind the scenes between big unions and big employers needs to be weeded out, and I am delighted that Baulderstone was publicly shamed by this case and fined for so doing. This is why we need the ABCC.

The bill will also provide for a building code. This applies to employers, and only employers can be sanctioned for breaches of it. The code will mean employers can no longer just ignore wrongdoing on their sites because they do not want to get involved. Employers will no longer be able to ignore inefficient practices and cost blowouts because they know they can just pass the cost on to their client, who is often the taxpayer. The building code will require strict compliance with employment, safety and migration laws. Why shouldn't the taxpayer expect that projects funded with tax dollars are run efficiently, lawfully and safely? The new code will have a new and streamlined enforcement mechanism to allow the ABCC to efficiently impose sanctions on employers who breach the code. The code will introduce a real commercial consequence on employers for doing the wrong thing or for allowing laws to be broken on their sites.

There has been a concerted campaign of misinformation about the code—for example, the absurd suggestion that the code bans RDOs or time off over Christmas or Easter. Each of these claims is simply false. Why they are made beggars belief, but it indicates the paucity of argument against the proposal that is currently before the Senate. One only needs to ask: what are the true motivations for the misrepresentation and untruths that are propagated in opposition to the return of an effective regulator and an effective building code that will hold employers to account?

The problem of endemic industrial unlawfulness in this industry has been clearly established. No objective observer can argue that the construction industry is simply like any other; it has shown itself to stand apart from other industries. The current laws have proven not to be enough. What is proposed in this legislation is about changing culture so this industry becomes like every other—that is, one in which the law always applies rather than only when convenient. The Senate today has a clear choice before it: to either send a message to the construction industry that it must comply with the law like everyone else or turn a blind eye and endorse the construction industry's history of ignoring the laws of this parliament and engaging in intimidation and bullying.

The problems with this industry are obvious. The choice is clear. The consequences flowing from that choice will be evident soon enough. As this nation embarks upon its most ambitious infrastructure-funding project of over $50 billion, it is vital to ensure that the construction sector is brought to account to abide by the rule of law so that the $50 billion worth of money invested by the Australian taxpayer proves value for money and that these projects can come in on time and on budget. I commend the legislation to the Senate.