Topics: Building Cooperative Workplaces Bill, CFMEU, corruption risk
E&OE
Bran Black, Chief Executive: Right now, being rushed through this Parliament is a bill that would preference union-backed deals for the purposes of funding opportunities and government procurement opportunities, and that comes with enormous corruption risk and increased costs, massively increased costs, for every Australian taxpayer.
Put simply, this Bill will increase ‘the bill’ for every Australian taxpayer. Let me walk through what this Bill does. What it does is enable the Commonwealth to discriminate for procurement opportunities, having regard to whether or not a company has a union-backed agreement or a union-endorsed enterprise bargaining agreement. As I say, for the purposes of considering whether or not they’re eligible for grants or eligible for procurement opportunities.
Now, the reason this is so significant is that it’s precisely these type of arrangements that have been the subject of so much scrutiny in Victoria. We’ve seen recently that Geoffrey Watson SC, in his landmark Rotting from the Top report, made the comment that it was these arrangements that effectively put into union hands control as to who won government contracts and who didn’t, and what that did was set up the conditions for corruption to occur, and the consequences in Victoria were enormous. Mr Watson estimated that the costs in Victoria were up to $15 billion.
Now, that was with respect to the construction sector, but extraordinarily, what is now proposed is that precisely these types of arrangements will be imported directly from Victoria and applied right across the federal jurisdiction. So they wouldn’t just impact the construction sector, they would affect every single sector right across our economy. So it doesn’t matter if you’re talking about the medical sector or the mining sector or the manufacturing sector or charities or even our defence procurement. Every single sector could be influenced by these types of corrupt arrangements, and we can’t see why anybody would wish to achieve that type of result.
Importantly, it’s not just us that’s making this point. We’ve seen today across the Parliament that we’ve had a number of MPs speak out, from Helen Haines to Zali Steggall to Allegra Spender, also the Opposition with Jane Hume, but most importantly, we’ve seen Geoffrey Watson himself come out and say that this Bill presents an enormous corruption risk.
It goes to the fundamental point that at the end of the day, we want to make sure that procurement and grant opportunities are awarded based on merit and value, not based on who’s got a union-backed deal. Very happy to answer questions.
Journalist: You noted, Bran, that this applies across the federal jurisdiction, and not just in construction, but it is discreetly the CFMEU that has had particular issues as far as union governance and corruption is concerned. Is there any sense, do you think that this is a problem that could be solved through greater oversight, some of the work the Government is doing, when there hasn’t been that kind of track record in other unions as there has been in the CFMEU?
Bran: Well, the way we see it, there is clearly commentary that goes to a fundamental point that if you put into the hands of a small number of people the power to say who wins government opportunities and who loses, that necessarily, and just as a matter of logic, increases corruption risk.
So in circumstances where you don’t already have those types of arrangements in place, and in circumstances where we’ve had somebody as eminent as Geoffrey Watson SC, the very experienced and distinguished corruption fighter from New South Wales, make comments directly about these types of arrangements and this specific bill, we asked the question, why would you choose to go down this path?
Journalist: If we left aside the corruption risk that Geoffrey Watson and others have identified. Is there also concern about the anti-competitive potential that this Bill might bring into the decision making around contracts and procurement?
Bran: Absolutely, so it goes directly to the point about value, we consider, and I think every Australian will agree with the fundamental proposition that if you are looking at grant opportunities, who gets taxpayers’ money at the end of the day, if you’re looking at contract opportunities, who’s able to engage on commercial basis with the Commonwealth, you want to make sure taxpayers are getting the most value for money, the best value for money, and that contracts are ultimately awarded based on merit.
If they’re awarded for something else, anything else, that’s undermining that fundamental proposition that the role with respect to procurement is to ensure that taxpayer dollars are spent as efficiently as possible.
Journalist: So, just to be really clear, you don’t see any salvaging of this bill. There’s no way that it can be tweaked to make it more acceptable in your eyes?
Bran: Just to be absolutely clear, it is the specific provision that removes the capacity for the Commonwealth to discriminate on the basis of whether or not an organisation has or doesn’t have a union-backed EBA, that is the provision of the Bill that we are concerned with.
The other provisions of the Bill, as others have noted as well, are acceptable to us, and we would be happy for the Bill to otherwise proceed. But this particular provision needs to be removed, it needs to be cut, it needs to be wholly rejected in every way.
Journalist: Isn’t that the centrepiece of the Bill, though? If you reject this, what’s the point of passing the rest of the Bill? Like, isn’t this issue around union-backed EBAs the kind of centrepiece of the whole piece of legislation?
Bran: No, there are other components of the legislation that go to entirely different issues. We take no concern in terms of those particular points, but this is, of course, the focus. This particular issue, in terms of procurement, is the focus for our attention, and we really do stress the point here that it is an enormous corruption risk, and it is directly importing arrangements that have led to extraordinary corruption in one Australian jurisdiction already, and very recently it’s importing those arrangements into the federal domain. We can’t understand why anybody would do that.
Journalist: The Minister’s defence of this in Parliament yesterday was around the principle of government supporting the role for union-backed EBAs as effectively a cost of living and a job security and living standards measure. Is there anything wrong with the principle of that, notwithstanding the issue you have with the mechanics?
Bran: We wholeheartedly support good collaboration between unions and between businesses, between workforces and businesses, and we see a role for EBAs. We’ve been on the record in this regard for a long period of time. When these types of negotiations are done well, on the one hand, we see improved pay and conditions, on the other hand, you see productivity benefits. That’s what we should be trying to achieve in the context of our industrial arrangements across our economy, but this is an entirely separate issue.
It’s an entirely separate issue because this goes directly to procurement practices and the circumstances in which some businesses are eligible to procure or to engage with the Commonwealth, and the circumstances in which they’re not, and in these particular arrangements that have been the subject of so much scrutiny and so much legitimate recent attention, it is abundantly clear that they carry with them enormous corruption risk, and that corruption risk translates into increased costs for taxpayers at a time when we have fiscal pressures, at a time we’re doing everything that we can to get budgets under control, we should be resisting any urges to go down these paths.
Journalist: And I mean, this legislation seems like a bit of a fait accompli. The guillotine motion has already passed. It looks like this will go through with maybe an hour’s debate in the Senate on Monday. Leaving aside your opposition to the substance, would it at least be a move in the right direction had there been some form of, more time, scrutiny committee process? Would that have provided an opportunity to limit some of the worst aspects of it in your view?
Bran: Well, I don’t understand how this provision can proceed in any form because of the enormous corruption risk that it carries, but as a general proposition, we will always support increased scrutiny within the Federal Parliament.
What is clear is that there is an attempt being made to avoid that scrutiny, and a very clear attempt being made to avoid that scrutiny by rushing this Bill through, and that is notwithstanding the numerous voices that have now come out and said, “Hang on a sec, we’ve got a problem here. Australians have a problem here. We need to make sure that there is proper scrutiny applied, proper attention delivered, issues ventilated, and ideally, the opportunity to cut this particular provision entirely.”