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Speech to the Masters Builders Australia Industry Dinner, Canberra.



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The Hon Julia Gillard MP

Minister for Education. Minister for Employment and Workplace Relations Minister for Social Inclusion. Deputy Prime Minister 29 May, 2008

Speech

The Masters Builders Australia Industry Dinner

The Masters Builders Australia Industry Dinner, Canberra, 28 May 2008

Acknowledgements

Thank you for that introduction.

I want to begin by acknowledging the traditional custodians of the land on which we meet, the Ngunnawal

People.

It’s a great pleasure to be here this evening to meet and personally thank the building and construction

industry for its huge and continuing contribution to Australia’s prosperity.

When we think about Australia’s economic miracle of recent years, we tend to think of the mining industry,

and rightly so. But the contribution of your industry is obvious and immense:

z It employs more than 867,000 people - 9 per cent of the entire workforce; and

z And it has an annual turnover of around $62 billion.

But the contribution goes beyond that.

I was at a luncheon with the Minerals Council earlier today, and, hearing their calls for urgent action to create

new national infrastructure, it’s obvious their industry and yours are intimately entwined.

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Simply put: no ports, no exports.

We could say the same about other key industries, which rely heavily on Australia’s building and construction

capacity:

z No concrete, no classrooms.

z Or hospitals.

z Or housing, including affordable new homes for Australia’s battling middle and lower income earners.

In fact, building and construction is an integral part of every economic and social endeavour in the country

today.

It’s even part of the fight against global warming because as the Clinton Foundation found recently, better

designed and constructed buildings can cut between 30 to 50 per cent of greenhouse gas emissions from our

cities.

So this is an industry of the future and one that needs to be about innovation and sustainability.

For all these reasons and more, the Rudd Government wants to keep your industry strong.

Now I acknowledge that this is a uniquely tough industry to do business in. It’s competitive, sometimes

ruthlessly so.

It has a tough industrial relations profile.

Involvement in it will never be for the faint hearted.

But the right policies can deliver more economic certainty and transparency to help the industry to continue to

grow.

And this desire is reflected across the whole gamut of the Government’s economic, skills, housing,

infrastructure and workplace relations policies.

KEEPING INTEREST RATES DOWN

Yours is an industry that more than any other requires continuing economic growth and low interest rates.

As you know, Australia is now facing its highest levels of domestic inflation in over 16 years, reaching 4.2 per

cent in the March quarter.

The Government is working to put downward pressure on inflation so that the cost of living and interest rate

pressures on working families can be eased and construction continue at a healthy rate.

That’s why the Budget delivered a surplus of 1.8 per cent of GDP and the lowest rate of spending growth in

nine years.

DEVELOPING SKILLS

We have to fight inflation on its other major front too - wage inflation resulting from severe skill shortages.

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The MBA’s latest quarterly survey reveals that it is becoming increasingly difficult for builders to find qualified

staff.

We’re determined to do something about it.

And to do so we’ve made vocational skill formation a central part of our plans to deliver an Education

Revolution.

The Skilling Australia for the Future initiative contained in the Budget has committed $1.9 billion to deliver

630,000 additional training places over the next five years.

Training for the first tranche of 20,000 job seekers began in April 2008, with places available at the crucial

Certificate II and III levels. More places are now being created and filled.

The training places are targeted to key industries that are currently facing a shortage of skilled workers

including the building and construction industry.

Deciding which industries get the places will be made on economic grounds and, given the high demonstrated

demand in building and construction, you are likely to be among the major beneficiaries.

It’s the same with school-based vocational education and training. $2.5 billion is being invested by the Rudd

Government to upgrade VET provision in schools.

And building and construction will also benefit from an additional 31,000 skilled migrants and the

improvements to the 457 visa system.

INFRASTRUCTURE EXPANSION

We’re going to need these extra skilled people because keeping Australia on the path to prosperity will involve

a host of new infrastructure projects.

Our ports, highways and urban transport systems are struggling under the strain of Australia’s rapid economic

expansion.

We need to get products and people flowing freely to promote efficiency.

That’s why we’ve established Infrastructure Australia and set up:

z The Building Australia Fund;

z The Education Investment Fund; and

z The Health and Hospitals Fund;

All of these funds will deliver an unprecedented boost to construction, renewal and refurbishment of

Australia’s infrastructure to improve the nation’s productivity.

And these will be joined by:

z The $12.9 billion national water policy;

z $22.3 billion in land transport infrastructure; and

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z $176 million to improve infrastructure in regional Australia.

KEEPING HOUSING AFFORDABLE

The Government’s housing initiatives will also work to keep the industry strong.

I know that housing affordability is one of the main areas of concern for the MBA. It’s one of mine too.

And to address it, the Government has allocated $2.2 billion to a housing affordability package.

Under the enhanced First Home Saver Accounts, the first $5,000 of individual contributions will now attract a

Government contribution of 17 per cent, earnings will be taxed at the low rate of 15 per cent, and withdrawals

will be tax free if used to buy or build a first home. This will be a huge help to working families saving to buy a

home.

It’s a policy close to my heart, because it will help many people in my electorate - as will the National Rental

Affordability Scheme, which will encourage the construction of up to 50,000 new affordable rental properties

by 2011-12 at a cost of $623 million.

And the Housing Affordability Fund, worth $500 million over five years, will help reduce the cost of providing

new housing infrastructure and cut red tape in development approvals.

Together these initiatives will strengthen the housing construction sector.

BALANCED WORKPLACE RELATIONS

Delivering on these potential economic, employment and social benefits is obviously going to require

productive and harmonious building sites.

Industrial relations in the building and construction industry, as in all industries, is a tough business, but it

can be made to work in everyone’s interests.

Laws must be upheld by all participants but the laws must be fair and balanced, clear and simple and they

must be rigorously enforced.

The Government understands that the various stakeholders in the building and construction industry do not

agree on all matters.

However, we do expect that all industry stakeholders will abide by the law and by industrial instruments and

that the law will be applied in a fair and reasonable manner.

We can’t afford to return to the high rates of industrial disruption of the past.

And we can’t afford to allow a culture of coercion and intimidation, whatever its source may be, to flourish in

the industry.

And we can’t afford an industry in which standards are not met and agreements are not kept.

Before last year’s election, we made a number of commitments about the workplace relations reforms we

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would introduce to establish a fair and balanced workplace relations system for all.

And we have stuck scrupulously to those commitments - something the MBA has publicly acknowledged.

We promised to get rid of AWAs and we promised to ensure a smooth transition for those businesses that had

been using AWAs.

We know the MBA disagreed strongly with our policy to end the making of new AWAs. However, in

accordance with our promises, we’ve ensured that existing AWAs continue to operate in accordance with their

terms and for Individual Transitional Employment Agreements (ITEAs) to be used in limited circumstances

by businesses that were using individual statutory agreements as at 1 December 2007.

And we have listened to stakeholders on the implementation of our policy. Indeed, following submissions by a

number of stakeholders, including the MBA, we made amendments to the ITEA provisions to ensure their

workability in industries that experience a high mobility of employees.

We promised to modernise awards to ensure that they provide a fair and relevant minimum safety-net for the

21st century. The former government made promises in this area too but simply never followed through.

However, we have kept our promise and kick-started the award modernisation process through a request to

the Australian Industrial Relations Commission dated 28 March this year.

And real progress is being made. This week we have seen the Australian Industrial Relations Commission hold

its first hearings on important matters including the timetable for the modernisation of awards and the

preparation of a model award flexibility clause.

We promised to retain tough clear rules on industrial action, including allowing industrial action to be

protected only during periods of good faith bargaining for a collective agreement. And this promise will be

kept.

We promised to retain the secondary boycotts arrangements in the Trade Practices Act and this promise too

will be kept.

We promised to retain the current right of entry framework and this promise too will be kept.

We promised to prohibit pattern bargaining and guess what? We’ll be keeping that one too.

We promised to consult extensively in relation to our substantive reforms and that consultation is now

occurring through:

z The Business Advisory Group;

z The Small Business Working Group;

z The Union Advisory Group;

z ACOSS; and

z The National Workplace Relations Consultative Council, on which the MBA is represented by Mr

Richard Calver. I want to thank Richard and the Association for their ongoing contributions to the

development of Australia’s new workplace relations system.

We promised all of these things and they are happening. As the Budget shows, the Prime Minister and the

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whole Government place a high premium on our reputation for delivering on our promises.

A REPLACEMENT FOR THE ABCC

It’s a similar story with the Australian Building and Construction Commission. Prior to the election, we

promised to keep the ABCC until 31 January 2010. And we are keeping that promise.

We also promised that, from 1 February 2010, the responsibilities of the ABCC would be transferred to a

specialist division within the inspectorate of Fair Work Australia. And we are keeping that promise.

We also promised to consult extensively with industry stakeholders to ensure the transition to new

arrangements will be orderly, effective and robust. And last week I announced how we would be keeping this

promise.

The process of consultation will be undertaken by the Honourable Murray Wilcox QC, a former Australian

Federal Court judge. The consultation process will be extensive.

As you may have already seen, the proposed terms of reference are broad-ranging. They include the scope of

investigations and compliance activities to be undertaken by the Specialist Division to the powers required by

the Specialist Division and its inspectors for the purpose of conducting those investigations and compliance

activities.

The proposed terms of reference also cover the resources that will be required by the Specialist Division and

the effective interaction of the Specialist Division with other federal enforcement agencies such as the

Australian Taxation Office, the Australian Securities and Investments Commission and the Australian

Competition and Consumer Commission.

The Government will be seeking feedback on the terms of reference and the final terms of reference will be

issued to his Honour by the end of June.

His Honour will be asked to report by the end of March next year and I urge all to make their contributions

either individually or through the Master Builders’ Association.

I note that the MBA, through its CEO Mr Wilhelm Harnisch, has already committed to working with his

Honour and I very much welcome that statement.

CONCLUSION

Building and construction today is part of every major endeavour of government, the private sector and the

community. We need to work together to keep it going strongly.

The macro economic policies, the skills initiatives, the new infrastructure investment funds, the housing

affordability programs and our workplace relations reforms are designed to do just that.

We’re not going to allow unlawful industrial disputation or conduct in the building and construction industry,

or any other factor, to disrupt our nation-building plans to modernize the economy and the country.

The MBA will of course have a role to play in helping the Government and other industries deliver on this

agenda.

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And I look forward to working with you to roll it out.

Thank you.

Media Contact:

media@deewr.gov.au

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