Second Reading – Building and Construction Commission

Tuesday, 2 February 2016

Mr PITT (Hinkler) (11:58): I support the original bill—the Building and Construction Industry (Improving Productivity) Bill 2013 [No. 2]—in its original form. Before I get to the details of the bill I would just like to discuss some of the issues put forward by both the member for Fowler and the member for Melbourne. As probably one of the few people in this place who spent over 20 years getting up, putting on the steelcap boots and the high-vis shirt and on many days the hard helmet—I have worked on more construction sites than I can count, from farming through heavy industry through major infrastructure projects, as a tradesperson, as an engineer, as a consultant, in a range of different forms—I have to say: what a lot of baloney from those opposite. I have seen this firsthand. I have seen it from the time I was an apprentice right though to now: the toolboxes full of glue, the times you went back and found that someone had welded your locker shut because you did not agree with the union official, the times people went outside and found their cars with four flat tyres—originally, the BLF, those great bastions of protecting the people in the construction industry. I have to tell you, I have seen all of it, and it is absolutely appalling. This bill is absolutely necessary, in my view.

The member for Fowler talked about worker exploitation and how the people on this side of the House had never done anything about it. Well, there is this small thing called Taskforce Cadena, which this government put forward and implemented—a multijurisdictional task force to address worker exploitation in horticulture. It is for those people who are out there who have been robbed by unscrupulous labour hire contractors; it is also for those people who look to exploit them to make more money. That task force is in place and active right now, and it was put in place by this government. Those opposite knew about this issue for many years. They were six years in government. What was the result? We had another review. We had another report. We had another pile of recommendations. But we are taking action, because this is a legitimate problem which is causing all sorts of major issues in rural Australia, in particular. For those people who are out there, who are getting paid cash in the hand, who are getting burned by people with phoenix companies, this legislation is addressing those issues and it is addressing them now. The perpetrators will be found, they will be caught and they will be prosecuted. I know of a number of those that are underway right now. I also know of a number who have operated labour hire firms and been penalised.

The member for Melbourne talked a lot about workplace health and safety, but he seems to dismiss or certainly does not recall that there are actually state governments in Australia and that it is the state governments which predominantly have the responsibility for OH&S. They have enormous departments, any number of workplace health and safety inspectors and large amounts of legislation which they enforce. The difficulty is when you have a second layer with the federal safety office—but I will get to that a little bit later on.

The importance of a strong construction sector right now cannot be underestimated. We have gone through a massive boom. It is talked about as the mining boom; it is talked about as the resources boom. But the reality is that the majority of that has been a construction boom. There have been very large projects underway for many years. Most of those projects are starting to come to an end now. In Gladstone, for example, more than 15,000 people were employed on major projects. If you go to small towns in Queensland like Roma, Mitchell, Miles and Chinchilla, they had literally expanded so far that they needed extensions to their tarmacs on the airport runways. They needed new facilities. There were thousand-person camps in the district. There has been an enormous boom in the construction sector and we need to ensure that it continues, because right now in my home state there are tens of thousands of people, highly skilled people, who are sitting around unemployed. They need more construction projects, they need them to be viable and they need them to be underway right now.

The royal commission in 2003 found consistent evidence that the building sites of construction projects in Australia were hotbeds of intimidation, lawlessness, thuggery and violence. I have not been on many of them, but I can tell you that that is certainly the case—it is absolutely the case. As an apprentice, I can recall tradesmen who did not join the union being black-banned, because that was allowed back then. We have moved on. I actually went through the period where demarcation was addressed. It was absolutely terrible. There were tradespeople who had decided it was a good idea to teach me certain things. I would like to have been able to weld. As an electrician that would be a fairly handy skill, but in the workplace where I did my time that was not permitted, because an electrician should not know how to weld—that was someone elses job. It would have been incredibly handy for me at that time as an 18- or 20-year-old; however, that could not happen. I clearly remember tradesmens tools being stolen. There was continuing intimidation. This stuff went on forever. It was just terrible. We need to address this, and the ABCC is one way to fix it.

The ABCC, when it was in place, was proven to have worked over a long period of time. Witnesses reported criminal conduct, unlawful and inappropriate conduct, including breaches of relevant workplace relations and workplace health and safety legislation, and a disregard for Commonwealth and state revenue statutes. On 11 April2015, the Courier-Mail, that great bastion of the media in Queensland, reported that in 2014, 12,300 days were lost and that it was the highest number of days lost among the Australian states due to industrial action. This was according to the Australian Bureau of Statistics. John Crittall from Master Builders said that the people who pay for that activity are consumers. The cost is passed on to the consumer. In fact, the CFMEU enterprise bargaining agreement adds an average of $50,000 in costs to every unit constructed. A one- or two-bedroom unit in a 10-plus storey apartment block within two kilometres of the Brisbane CBD will cost between $260,000 and $300,000 if it is a CFMEU construction. That same unit constructed by a non-union organisation will cost between $220,000 and $250,000—a difference of some $40,000 to $50,000. These are the things that need to be addressed. We need a strong construction centre because our economy needs it. We need more employment. I would certainly encourage the Palaszczuk government to get their hand out of the cookie jar right now and start to get on with the federal projects which are available to be built. We have massive projects available in Queensland. We have the Second Range Crossing in Toowoomba, with over $1 billion worth of construction. We need those projects underway. I am very pleased that the local member, the member for Groom, went out and turned the sod for those projects; they are starting to move. We need to employ tens of thousands of construction workers who currently do not have anything to do. This is incredibly important.

In 2013, when the ABCC existed, an independent economics report on the state of the sector found that, in the building and construction industry, productivity grew by more than nine per cent. It is something which works. Consumers were better off by around $7½ billion annually. Fewer working days were lost through industrial action. So this is something which has been proven to work when in place—and it should be in place.

We have heard a lot noise from those opposite about this being a union witch-hunt. I have read the recommendations from the Heydon royal commission. It is not solely about unions. In fact, in an article by Kara Vickery on 31 December 2015, she states:

A total of 45 people, unions and companies were referred to police or other authorities for investigation by the commission, including Cesar Melhem and Katherine Jackson.

In terms of companies, she goes on to state that the report:

… also alleges “adverse recommendations” about executives from large private companies including, Cbus, the Thiess Group, the John Holland Group, the ACI Group, Downer EDI Engineering Power Pty Ltd, Winslow Constructors Pty Ltd and the Mirvac Group.

This is not a witch-hunt about unions. This is about sorting out lawlessness in the construction sector. This is necessary. We need it to be in place. The ABCC will have the structures to do its job. It will change the definition of building work or modify it to include off-site, prefab or made-to-order components for parts of building structures or works. The reason for this is simply to stop the go-slow. You cannot construct anything if your product does not show up on site.

As I moved through from an apprentice to an engineer, I did some farming and some other things. I eventually ended up with a consulting firm. At its peak, I had some 15 staff. I clearly remember the day when my business manager came back to tell me that to bid on a major construction project, to have any hope of being successful, it had been suggested to him that I needed a brown paper bag with $30,000 in it. I did not bother to bid for that contract. My company was not involved in those things. I have sold it now and it is no longer my asset. But I will never forget the day that one of my employees came to me and told me I needed a bag full of folding notes in order to get a contract. I was very happy at the time and I continued to work in regional Australia because it certainly was not quite as bad in my view. These changes will make a difference, and it has been proven. I certainly encourage those in the other place to pass this legislation because it is important to the nation. It is important that we sort it out.

I have a whole list of examples. But the thing I would like to talk about briefly, as a former lead auditor and someone who ran a business who provided these types of audits, is the federal safety office. The federal safety office certainly is essential for Commonwealth contracts, particularly those ones that are only on Commonwealth land. Major construction companies need to have accreditation for whichever state they want to operate in. And if they want to work on federal government buildings and structures of above a certain value, they need federal accreditation. What that means is that, if you do not have federal accreditation, you cannot bid for that work. There are any number of construction companies in regional Australia that can do work of above $5 million. There is no doubt about that; they provide that service for state government contracts, local councils and private companies. But in order to provide that service for federally funded building and construction, under the current laws, they will need to be accredited through the federal safety office. The estimated cost of getting that initial accreditation is between $200,000 and $400,000 and the cost of maintaining your accreditation is between $100,000 and $200,000 every single year. The difficulty of course is that, if you are a small to medium sized enterprise who can do this work, there is no way that you can sustain that accreditation.

So I would certainly encourage our government to reconsider its position on the figure of $5 million. We did move it from $3 million to $5 million. However, if you are a regional builder based in a regional centre, who employs local people and local contractors, it is almost impossible for you to win this work. You might end up doing it anyway, because a major contractor from a major city who is already accredited wins the tender, but what that means is you do not make any margin and that money leaves town. So that additional money, which you might have actually spent in the local economy or provided to your employees, leaves and goes elsewhere. It is not good for regional Australia. It is not good for the construction industry, and there should be more diversity. Quite simply, we should not have only a handful of large, major companies with the capacity to deliver federal government projects.

In the regions, these projects are incredibly important because their value and the amount of money they can inject into the local economy makes a real difference to the people that live there. And not only that. They also provide opportunities for our local youth to get in and potentially get an apprenticeship or at least get experience on a major construction project that they might not get elsewhere.

I would encourage our own government to consider this differently. The federal safety office is a necessary evil, but it is another layer of red tape and another cost for businesses. We really should go back to looking at this issue as part of our review of the Federation. Quite simply, someone should have responsibility. It should not be allocated to everybody. Once again, I can say from experience that, in order to meet the requirements for the state and federal accreditation schemes, there are actually areas of direct conflict—things which are exactly opposite. You need to have two sets of systems; it does not actually give you the outcome you might want. Reams and reams of paper do not make a difference to OH&S. Having a certificate on the wall does not prevent someone from falling from a roof or through a hole or through something which is not covered or from being run over on a construction site.

We need to think about how we address this. In my view, it is a state responsibility. They have the capacity and the legislation already in place. But it is something we need to think about. This bill is incredibly important. We need to get it through the other place. Once again, I would encourage those in the Senate to pass this bill. It is a good bill for consumers; it will reduce the costs to them. It will reduce lawlessness and lost time. It will certainly address both union and company issues within the construction sector; it is not just unions which are addressed by this bill. I commend the bill to the House.

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