Address to the Master Builders Association of Victoria

Introduction

We as a Government know that it is our job to set the overarching policy but it is people like you that actually create jobs. We know that it is people in this room who have taken out mortgages on their houses to finance their businesses. So, can I start by saying to each and every one of you – thank you for the work that you do in this State.

As an aside, I should note that speeches to Master Builders Victoria by Coalition politicians often have unforeseen consequences. When the now Prime Minister addressed this gathering, he later found himself sued for defamation by John Setka. I hadn’t intended to make any comments about Mr Setka today, other than to observe that his two best mates at the moment appear to be Mick Gatto and Daniel Andrews. Hopefully none of those three individuals finds any defamatory imputation in such a comment.

The Government understands that it is so critical to ensure that the economic settings are right to help your businesses prosper, which will in turn give you the confidence to employ more Australians.

We know that the Carbon Tax collects $7 billion each and every year. If every dollar of that money was spent by employers on employing people that’s 60,000 more jobs right there!

We know that the Mining Tax is scaring off foreign investment in this country, which has a flow on effect throughout the economy, including construction.

We know that the workplace relations laws need to be recalibrated to the sensible centre.

And, most obvious of them all, we know that the culture of questionable conduct in the building and construction sector means lost productivity, projects falling behind and an unsettled workforce.

Building Industry Productivity

This week’s international comparison of Trade Labour Force Entitlements compiled by Davis Langdon shows that Australia has the most adversarial and underworked construction workforce of all countries considered.

For the highest pay, we also have the least days worked – including on average 26 rostered days off a year. We have the lowest level of ordinary hours worked per week and have an average of 12 weather-related disruptions per year.

Despite these conditions, Australia’s workforce was rated by far the most “adversarial” and uncooperative in terms of workplace culture. The evidence is clear and undeniable – there has been no correlation between more generous workplace conditions and more harmonious workplaces. Many of you would have some very interesting insights as to why this is so.

Some will say the adversarial culture is what has led to these conditions. The adversarial culture is what makes it difficult to resist the demands. I understand the difficulty. Could I just invite you to reflect that each time one gives in to this culture; you embolden, strengthen and feed that very culture.

We need to lift Australia’s productive capacity. Importantly, we need to lift Australia’s productive capacity on building sites, which is why the Government introduced legislation to reintroduce the ABCC in the first Parliamentary sitting week following the election. The ABCC when it last existed had an economic welfare gain in excess of $6 billion. Importantly, it helped make workplaces less combative and more harmonious. People regularly reported to the Government that, for the first time in years, they looked forward to coming to work each day to actually build things, rather than dreading facing another day full of the sort of belligerent pettiness that so often characterises the industry.

It’s critical for our nation’s competitiveness that unions work with employers to ensure sustainable wages and conditions that do not cost jobs. As former Labor Treasurer Frank Crean said, “one man’s pay rise is another man’s job” and uncompetitive clauses like excessive RDOs can ultimately mean a reduction in work for others. In Victoria, the higher cost of building projects has quite literally scared off potential investors who would have otherwise been happy to build here. We may never know how many more hospital beds, school buildings or road projects could have been built for the same cost in Victoria, if only people had the confidence to think they might be able to deliver projects on time and on budget in an affordable way.

It is critical to a productive and prosperous Australia, and Victoria in particular, that we re-establish the ABCC.

We know the ABCC will work, because it worked before. While the ABCC existed, the economic and industrial performance of the building and construction industry significantly improved. For example, a 2013 Independent Economics report on the state of the sector during this period found that:

  •          industry multifactor productivity grew by 16.8 per cent;
  •          consumers were better off by around $7.5 billion annually; and
  •          fewer working days were lost through industrial action.
  •          I had hoped that Dave Noonan might have told us what he will do to ensure officials of his union did not engage in corrupt deals with shady underworld identities;
  •          I had hoped that he might have resolved to crack down on the apparently extensive links between staff in his own union and outlaw bikie gangs;
  •          I had hoped that he might have shown some concern for officials of his own union allegedly receiving death threats from other officials;
  •          I had hoped he might have shown some remorse for the Victorian branch’s contempt of the Supreme Court in the Grocon dispute;
  •          I had hoped he would call off the Victorian branch’s further contempt of court in its ongoing secondary boycott against Boral.

This is a proven regulator that makes sure that those investing are in control – not the dodgy union bosses and their bikie mates.

Our ambition is to see a productive building sector, a building sector not plagued by lawlessness and thuggery and a harmonious environment where workers can go to work in peace, safety and be rewarded with a good income. This should hardly be an ambitious goal in the twenty-first century.

Fair Work Amendment Bill 2014

The Government has this week introduced the Fair Work Amendment Bill 2014, which will deliver some important general reforms and some for your sector, around right of entry and greenfields agreements.

The Bill will address the current imbalance in union right of entry. Our changes will fairly balance the right of employees to be represented in the workplace if they wish to be, with the right of employers to go about their business without unnecessary disruption.

The Government sees right of entry as a specific statutory privilege to which conditions ought to apply. Regrettably, some union bosses do not, especially here in Victoria. So, I commend the recent efforts of Master Builders Victoria to crack down on unauthorised site visits by union bosses, which I read about recently on the front page of the Herald Sun. I noted with interest that mug shots of various persons of interest have been circulated to site managers - the “Mugs of Thugs”, as they were recently referred to in Parliament.

In 2007, the Labor Party promised on multiple occasions that there would be no changes to the union right of entry laws. In a press conference on 28 August 2007, then Deputy Opposition Leader Julia Gillard said, and I quote:

“We will make sure that current right of entry provisions stay. We understand that entering on the premises of an employer needs to happen in an orderly way. We will keep the right of entry provisions.”

Those promises were not kept and unions were given much easier access to workplaces under the Fair Work Act provisions, which were shamelessly exploited.

The problem was highlighted by Mr Shorten’s own Fair Work Review Panel, which noted that the Pluto LNG Project received over 200 right of entry visits in only 3 months. BHP Billiton’s Worsley Alumina plant faced 676 right of entry visits in a single year. Our changes will reduce the capacity for unions to deliberately harass and disrupt businesses in this way.

A recent case featuring CFMEU National President Joe McDonald has underlined the urgent need for these reforms. In this case, where Mr McDonald and the CFMEU were fined $193,600, he ignored a request to leave a site in Western Australia. When asked to leave the site because he didn't have a right-of-entry permit, Mr McDonald replied: "I haven't had one for seven years, and that hasn't f**king stopped me". Mr McDonald’s arrogant attitude reflects the regrettable disrespect for the law by elements of the union movement that should have no place in modern and fair workplaces.

To be clear, these amendments will enact Labor’s promise prior to the 2007 election. A promise that was not honoured. Given that the Labor Party in Opposition, with the strong support of the union movement, supported this 2007 policy platform then, you would think, that these amendments will not be contentious when they are put to the Parliament.

Let me turn to greenfields agreements, which can be vital for the commencement of major new projects, as investment funding often depends on settled labour arrangements being in place. The Bill will ensure that negotiations for these agreements are subject to good faith bargaining requirements and in a reasonable timeframe. These amendments are another step to demonstrate that Australia is open for business once more. They are essential if we are to encourage future investment in new resources projects.

The Bill will remove the effective union veto over greenfields agreements under the current arrangements, which have enabled them to frustrate the making of these agreements by seeking exorbitant wages and conditions or refusing to agree at all. As the former Labor government’s Fair Work Review noted, in somewhat understated language, these practices ‘potentially threaten future investment in major projects in Australia’.  This is bad for jobs and bad for the economy.

The Bill will also establish a new, optional three month negotiation timeframe. If agreement cannot be reached in this timeframe, the employer will be able to take its proposed agreement to the Fair Work Commission for approval.

I commend the contribution made to the Bill by Richard Calver, who has been a strong contributor as your representative on the National Workplace Relations Consultative Committee and the Council on Industrial Legislation. I know that successive governments have benefited from Richard’s wisdom as a particularly strong advocate for your sector.

Building Industry Reform

In addition to these legislative reforms, I can also confirm that the Government will soon be releasing a revised Building Code, which will undo the very regrettable changes made by Bill Shorten as Minister last year. The revised Code will reflect the rigour of previous Code and Guidelines implemented by the Coalition when last in Government. Thankfully, some of this rigour remains in place within various State Guidelines, in which the Victorian Government led the way.

I can also confirm that the revised Building Code will cover the next bargaining round for EBAs covering the Victorian building industry.

This is one step that the Government can take to help the industry achieve more efficient and harmonious workplaces. There are many other steps that the industry can take, in conjunction with Government. In particular, I have been heartened in recent days to have heard of the great work being done by building industry employers to promote safer workplaces. When I spoke earlier of Australian building sites being the most adversarial in the world, it is fair to say that the responsibility for this state of affairs lies with people outside this room. However, everyone in this room is able to take responsibility for making our building sites the safest in the world. This is something that employers must be across. 

Do not delegate your responsibility to others.  An element of this is compliance with Work Health and Safety representative election rules.  I encourage all of you to use the collective strength of your organisation to do all you can to incentivise and reward higher safety standards amongst your membership. If there is an opportunity to share information and learn from each other then it should be taken. The veil of safety performance should be lifted to improve safety across the industry, so that the catch cry of “safety” cannot be misused for industrial purposes. 

Whilst workplace safety must always be of paramount importance to the building industry, so too must the rule of law. Unfortunately, this is not currently the case.

All of you would be familiar with the quite shocking revelations of corrupt activity in the building industry that were revealed by a series of public interest reports in the Fairfax press and the ABC over the past month. For many of you, these reports would have simply confirmed what you had already known for years.

The law needs to be enforced, whenever it is broken. All of us will recall the horrific scenes of lawlessness on the streets of Melbourne in August 2012. The conduct itself was bad enough, but what made it even more contemptible was that it involved a deliberate breach of orders of the Supreme Court. It is hard to imagine a more flagrant display of contempt for the rule of law.

The old truism says that “Justice Delayed is Justice Denied”. While I am conscious of the separation of the executive government from the judiciary, I trust there were good and cogent reasons why it took nine months for the Supreme Court to reach a decision that the CFMEU was guilty of contempt of court. There are no doubt equally good and cogent reasons why it is taking another nine months for the court to hand down its penalty. Suffice to say I find it difficult to explain these delays to those that may be minded to seek the protection of the law and desperately need speedy resolution of their issues.

For most of us, the notion of compliance with the law is simply taken as a given. Unfortunately, however, the building industry contains a number of participants who take a different approach. Their attitude is to be as well-behaved as they feel they need to be. So when laws are not effectively enforced there is a downward spiral of lawlessness.

In light of the many revelations of unlawful conduct over the past month, I have taken a close interest in the responses of the various bodies responsible for upholding the range of laws that apply to the building industry. In particular, I have noted the absence of Police involvement in situations that one might ordinarily think would attract their interest.

Police leadership have claimed it is due to factors such as a lack of resources or lack of evidence. Whatever the explanation is, I hope it is not another factor on their part which is equally crucial - a lack of will. It would be disturbing if crimes of corruption or violence that would immediately be jumped on if they occurred anywhere else go unpunished just because they occur on a building site. Nobody would want to conclude that a mentality at the higher levels of Police to “keep the peace” rather than “uphold the law” has in some way encouraged an increase in such behaviour.

If a person were to enter uninvited to a private residence, or a commercial premises in another industry, block access to the site and intimidate its occupants, that conduct would be reported to Police and Police would act. But if that person happens to be a union representative and the location is a building site, then that conduct is considered to be different, only because it has the label of an “industrial dispute”. I do not want to see a perverse culture surrounding this industry which discourages victims to complain to Police, or seeks ways to excuse the conduct of perpetrators.

I dare say that if Police Command in Flinders Street were to suddenly find its driveways blocked, its doors picketed and staff on site threatened and abused, then those matters would be very quickly and effectively dealt with. Those responsible would be left in no doubt that such conduct is completely unacceptable. This is as it should be. The problem is that every other Victorian workplace should be treated the same way. As the CFMEU likes to say, “One Law For All”.

Anyone who believes in the rule of law should be deeply concerned that one part of Australian society – building sites – are in many respects un-policed. Weakness such as this will inevitably be taken advantage of – not just by building industry participants with less scruples, but by organised criminal elements who have clearly sniffed the opportunities that are available to them when laws are not enforced.

The ABCC did excellent work to enforce industrial laws in the industry, but this is only one element of the equation. Criminal laws also need to be enforced. Of the 39 criminal matters that the ABCC referred to law enforcement bodies, only one ever resulted in a Police prosecution. Only having one set of laws enforced is rather like having a stool with one missing leg.

Building Industry Corruption

After several weeks of reading reports dealing with serious allegations of corruption and malfeasance, many of which implicated officials of the CFMEU, I looked forward to reading a recent opinion column by the CFMEU’s national secretary, Dave Noonan, in The Age last week.

Finally, I thought, Mr Noonan would respond to these very serious allegations on the pages of the very newspaper that broke the stories.

At least, that was what I hoped. Regrettably, the reality fell far short of my expectations.

Instead, Mr Noonan’s column did not include a single reference to any of the reports covering the many, many serious allegations involving his union.

If any self-respecting company, private organisation, or for that matter, political party, was faced with allegations of ongoing and systemic corruption and thuggery within its ranks, they would take the appropriate action to reform themselves. Common decency, not to mention the future viability of the organisation, would demand that their leaders take responsibility for the situation and do something about it. Unfortunately, Mr Noonan has clearly failed this test of leadership.

Let me make it very clear to Dave Noonan and anyone else who continues to deny the undeniable. If they won’t do what is necessary to clean up their union, then it will inevitably fall to others to do so. The thousands of honest workers and contractors in the building industry are thoroughly fed up with the lawless antics of the CFMEU and the political protection that it has received from the Labor Party. Such a clean-up will, of course, include dealing with employers and contractors who have found it convenient to co-operate in illegality with the unions for their own benefit. Feeding the crocodile hoping to be eaten last is neither smart nor ethical.

Conclusion

In closing, let me give you an assurance that this Government will do all it can to return the rule of law to the building industry and ensure that wrongdoers are held to account, whoever and wherever they are.  We wholeheartedly believe that workers deserve to be able to go to work each day without the fear of being harassed, intimidated or threatened with violence.

Thank you for your support in our mission to re-establish the ABCC and restore the normal standards of commercial conduct that apply in every other sector of the economy. 

Australia cannot afford to have a building and construction industry which is inefficient and unstable. The restoration of the Australian Building and Construction Commission and the Building Code which supports its work is a critical reform for Australia and I look forward to continuing this vital work.

(ENDS)

About Eric

Eric Abetz has been a Liberal Senator for Tasmania since 1994 and has served in a range of Leadership, Ministerial and Shadow Ministerial roles.

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136 Davey Street
Hobart  TAS  7001

(03) 6224 3707

Senator.Abetz@aph.gov.au

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