Reinstating the ABCC the Easiest Decision the Senate Can Make

26 February 2016

This opinion article by Jennifer Westacott, Chief Executive of the Business Council of Australia was published in The Weekend Australian on 27 February 2016. 

Reinstating the Australian Building and Construction Commission (ABCC) should be the easiest decision the Australian Senate can make, and an opportunity to show leadership at a time when its capacity to represent the interests of voters is under question.

Corruption, violence, and threats have been shown to exist in the building and construction industry by four different Royal Commissions over the past 40 years.

Justice Heydon’s Royal Commission is just the latest. It’s conclusion that there is ‘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’, is disturbing.

Even more alarming, Justice Heydon clearly states these are not new issues and that they have been identified in reports by the three earlier Royal Commissions in 1982, 1992, and 2003.

Let’s just stop here a minute and take stock of this.

Why should we tolerate in any industry a toxic culture of systemic corruption, unlawful conduct, physical and verbal violence, threats and intimidation? It shouldn’t be tolerated because of the enormous impact that such a culture has on workers, employers, costs and competitiveness.

Tolerating that kind of behaviour puts workers at risk. It puts employers at risk. And when the industry is significant in size, such behaviour not only impacts on the people in the industry but it puts Australia’s competitiveness and growth at risk also.

The building and construction industry is the third biggest employer in the Australian labour market. It has maintained its significance to the Australian economy over decades, growing from 7 to 9 percent of Australia’s labour market over the last 30 years.

It’s also the second largest sector in terms of total industry output at 8.8 percent, ahead of agriculture at 2.5 percent, manufacturing at 6.8 percent, and mining at 7.2 percent.

So, not only is the sector crucial because it builds the homes we live in, the roads we drive on and the offices we work, it is also vital to creating jobs, growth, and Australia’s competitiveness.

Reintroduction of the ABCC was a key commitment of the current government’s election platform. In line with its election mandate the government introduced a Bill to bring back the ABCC. Justice Heydon’s Royal Commission adds to the mountain of evidence over four decades which should make this the easiest Bill for the Senate to support.

As well as recommending the industry continue to have its own regulator, Justice Heydon called for the regulator to have ‘compulsory investigatory and information gathering powers equivalent to those possessed by other civil regulators’. He concluded the Bill before the Senate was consistent with this recommendation.

To balance any concerns about these powers, Justice Heydon further recommends the Commonwealth Ombudsman has oversight of the powers exercised by the regulator.

In a crucial sector where four Royal Commissions in four decades have concluded the same problems continue to exist, and that the industry needs its own regulator, the ABCC is fundamental to cleaning up the industry.

And cleaning up the industry is not limited to one group. The latest Royal Commission has shown the cultural problems are in unions and businesses, so the ABCC needs to be given the powers to investigate and sanction the behaviour of all parties.

The facts are on the table. There is unassailable evidence this body is needed.

There is a suggestion we need a national corruption body, not one just for this industry. We could kick this down the road debating whether we need a body for all industries, or we could take the opportunity to solve the problem we have before us.

The Productivity Commission says the ABCC is likely to have had its primary impact on unlawful conduct and on local productivity and costs at particular sites. These are important effects with benefits that have a flow on effect and impact most Australians.

A more productive industry means lower costs of construction, which flows on to lower costs of products from the industry, which flows on to costs for consumers.

We have a problem industry that has an impact on workers, employers, and our broader economy. The dysfunction and behaviour in the industry impacts both our people and our competitiveness.

A more harmonious, more collaborative culture in the industry – which the ABCC can make a direct contribution to - will be vital for maximising the economic benefits from major projects that would flow to the broader community.

It is already hard enough to be productive and competitive with a workplace relations system with complex awards, and enterprise bargaining arrangements that restrict the agility of businesses and the flexibility for workers. Having a combative workplace culture in one of our key industries only makes this problem harder and harder.

We have a clear and significant problem confronting us, but we also have a solution at hand. It’s time to put the solution in place and bring the ABCC back.



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