Media & Speeches

WHEN THE DUST SETTLES, CORRUPT CONSTRUCTION CULTURE NEEDS A MAJOR REPAIR

An opinion article by Jennifer Westacott, Brendan Pearson and Innes Willox published in The Australian on 22 June 2016

The election winner must not forget the issue that triggered the double-dissolution

With election day looming, it’s timely to come back to the issue that triggered this double-­dissolution poll but which has had very little attention since: the fate of the Australian Building and Construction Commission.

It’s only the seventh double-dissolution election in our history, and the Senate’s rejection of the ABCC legislation was a trigger, meaning that potentially the bill could be put to a joint sitting of Parliament after the election. So why is the ABCC so important, why is it so contested and why is it essential that it be passed?

First, four royal commissions since 1982 have all concluded union activity in the building and construction industry is rife with corruption, violence, and threats. Opponents of the ABCC falsely argue there is no credible evidence to support this. The latest royal commission concluded the industry exhibits a culture of “systemic corruption and unlawful conduct, including corrupt payments, physical and verbal violence, threats, intimidation, abuse of right of entry permits, secondary boycotts, breaches of fiduciary duty”.

We accept the evidence of four royal commissions as credible, and we expect most Australians would agree with us. It’s important we understand what this culture means — it’s a contagion across all issues in the sector. No industry should be allowed to operate with that malignant culture. It is the responsibility of all of us, including politicians, to reject such a culture, and to take all actions needed to stamp it out.

Second, no society can afford to allow the rule of law to break down. The Construction, Forestry, Mining and Energy Union appears to adopt a business model of breaking the law to achieve its industrial aims and budgeting for the consequent fines as part of its normal business operations. Numerous judges have condemned this unacceptable conduct but this has not resulted in a change in behaviour. 

The ABCC would play a vital role in restoring not only the rule of law, but a healthier and more productive culture in the construction industry. The ABCC would ensure unions, employers and all other participants in the industry comply with the law and take mutual responsibility for the culture in each workplace. No one who complies with the law has anything to fear from the ABCC.

Third, the building and construction industry is the second largest sector in the economy in terms of total industry output at 8.8 per cent of gross domestic product, ahead of mining (7.2 per cent), manufacturing (6.8 per cent) and agriculture (2.5 per cent). Our economy is struggling to grow and become more productive, and as the industry with the second largest output, building and construction is key. By focusing on the culture of the industry, the ABCC can improve productivity so everyone wins. 

Opponents of the ABCC say our building industry is internationally competitive and productive. Any business trying to negotiate an enterprise agreement in the construction industry, or dealing with the unions in the commercial building industry, would contest this statement.

The Productivity Commission has said the ABCC is likely to have had its primary impact on unlawful conduct and on local productivity and costs at particular sites. Both of these issues contribute to the industry’s productivity. A more productive industry means lower costs of construction, which flows on to lower costs of products from the industry, which flows on to reduced costs for consumers.

Governments have limited funds for vital community infrastructure. Higher construction costs mean fewer hospitals and schools and reduced investment in roads and rail. As well, a productive construction industry is integral to the competitive performance of key export and import-competing industries like mining and manufacturing, which are price takers on global markets and can ill-afford unnecessary costs and delays to their operations.

The fourth, and perhaps most important reason why the ABCC bill should be passed, is that the building and construction industry is the third biggest employer, with more than a million workers. And this industry is one where many of our kids start their working lives. Almost 20 per cent of young people working full time are in building and construction. Many of them are doing apprenticeships, and for most of them it’s their first proper job.

We’re talking about close to 150,000 kids starting from the age of 15. Should a million workers be exposed to this culture on a daily basis, and should our kids experience this in their first real workplace? 

When this election is over, regardless of who wins government, the problem of the building and construction industry needs immediate attention. Our politicians will have a very simple proposition before them. They can fix the culture of the building and construction industry by re-establishing the ABCC. Alternatively, they do nothing and allow the culture to continue to fester for another 40 years, for which our economy, consumers, and workers will pay a high price.

Jennifer Westacott is Chief Executive of the Business Council of Australia; Brendan Pearson is Chief Executive of the Minerals Council of Australia; and Innes Willox is Chief Executive of the Australian Industry Group.