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Federal

Feb 3, 2016

Does construction need a watchdog with security agency powers?

The evidence justifying the draconian powers of the proposed re-established Australian Building and Construction Commission is thin on the ground, despite the government's claims.

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The Building and Construction Industry (Improving Productivity) Bill 2013 (No. 2), reintroduced yesterday by the government, is a remarkable assault on some of the most basic rights Australians take for granted: the right to silence, the right to legal representation, the right against self-incrimination, the right to tell someone you’ve been interrogated against your will by overreaching bureaucrats. All of these are aimed at one union, the CFMEU, although the ABCC’s reach will extend to other sectors like transport and manufacturing. And as we know from past experience, the ABCC in its former Howard-era incarnation is ready to use those powers, even against people with no role or interest in the construction industry who happen to be in the wrong place at the wrong time. Worse, some of its powers were exercised illegally.

This suite of powers, which is comparable in impact to the counter-terrorism powers wielded by security agencies in the so-called War on Terror, are justified by the government and employers on the basis claims of lawlessness and thuggery in the construction industry. But more specifically, it’s about lifting the productivity of the construction industry — after all, that’s the name of the bill. The explanatory memorandum for the current bill states:

“While the ABCC existed, the performance of the building and construction sector improved. For example, industry productivity improved, Australian consumers were better off and there was a significant reduction in days lost through industrial action.”

You’d expect there to be a strong basis of evidence for giving draconian powers to such a body above and beyond the normal powers of Commonwealth and state police forces and courts, as well as the current Building Inspectorate within Fair Work Australia, which has specific powers of access and information-gathering. After all, those who want to reduce our rights should bear the burden of demonstrating why it is necessary. So how does the evidence for the need for such additional powers for a new ABCC stack up?

On industrial action, it’s impossible to confirm the government’s claims using independent data from the ABS. Its industry-specific industrial disputation data only goes back to 2008. We do know that, overall, the current level of industrial disputation is at historic lows, but that doesn’t tell us much about construction. The original ABCC was established in 2005 and abolished in 2012, although its period of operation as a specifically anti-CFMEU entity finished in 2010, when Coalition favourite and industrial relations hardliner John Lloyd was replaced with Leigh Johns, under whom the ABCC began showing interest in other problems like sham contracting and tax avoidance rather than singlemindedly pursuing the CFMEU.

Then in opposition, the Coalition accused Labor of “neutering” the ABCC; Johns was attacked by Senator Eric Abetz for being a former ALP member. Johns has since been accused by former ABCC executive, current Building Inspectorate head and likely head of a new ABCC, Nigel Hadgkiss, of doing deals with the CFMEU. In 2011, Lloyd also attacked his successor, accusing him of deflecting the ABCC from its core mission in favour of pursuing “trendy issues” like sham contracting.

What we do know from the ABS data is that the average annual level of days lost per thousand employees in the construction industry increased significantly from 2008 to 2012 — but then fell back to near previous levels in 2013 and 2014. So far this year the level of days lost is well below mining — although mining is another area of CFMEU presence. But overall, days lost per thousand employees in construction is around six times the level of the overall economy.

So whether the level of disputes has gone up or not, construction does have more industrial disputation — although the CFMEU would argue that’s because it’s one of Australia’s most dangerous industries. Safe Work Australia data shows construction is the third most dangerous industry, after agriculture and transport. Moreover, as Safe Work data also shows, under Howard’s ABCC, workplace fatalities in the construction industry rose significantly, but they fell again once the ABCC was “neutered”, reflecting how the Lloyd-era ABCC’s goal was to gut the CFMEU rather than protect workers.

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What about productivity? Fortunately we can turn to the Productivity Commission’s 2014 study of the construction industry as part of its exhaustive report on infrastructure (the relevant volume is here). Here, the government story comes a cropper. The PC found:

“Productivity growth in the Australian construction sector has ebbed and flowed over the last 30 years. There was a significant increase in labour and multifactor productivity from 1994-95 to 2012-13. However, most of the improvement was concentrated in relatively short bursts spanning just a few years, including most recently in 2011-12.”

That doesn’t fit at all with the government’s claims — particularly given productivity surged after the ABCC was “neutered” and distracted by “trendy” issues from 2010. The PC also noted that Australia fared well in international comparisons, although getting like-for-like data was difficult and more work was needed. But what evidence there is fits poorly with the government narrative:

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What about costs? Employer groups and business are continually lamenting how construction in Australia is expensive compared internationally. The PC found evidence:

“There have been some recent significant increases in input costs, particularly labour and fuel costs … International comparisons of costs between Australia and counterpart countries are largely inconclusive, but do not support some recent claims (such as those made in BCA 2013) of very large cost differentials.”

That “BCA 2013” reference, by the way, is to a report that Crikey demolished when the Business Council published it a couple of years ago. But the PC also noted that more recent data show softer labour market conditions that would reduce labour cost pressures in the industry. And ABS wage price index data reflects this: in the three years to the September quarter 2015, private construction industry wage costs slowed significantly from previous years and grew more slowly than wages in manufacturing, retailing, real estate and education — in fact, construction industry wages grew marginally below the average across all sectors.

So construction industry wage costs aren’t growing any faster than the rest of the economy despite claims about CFMEU thugging employers, and productivity surged after the “neutering” of the ABCC. Only on industrial disputation do the stats back the “rogue union” line, but given the high stakes in terms of workplace injury and fatality — and the fact that the restoration of the ABCC may result in a rise in workplace deaths — that may reflect unsafe workplaces as much as union militancy.

It’s on such weak foundations that the Coalition is launching a major attack on civil liberties and targeting one organisation. Evidence-based policy it isn’t.

Bernard Keane — Politics Editor

Bernard Keane

Politics Editor

Bernard Keane is Crikey’s political editor. Before that he was Crikey’s Canberra press gallery correspondent, covering politics, national security and economics.

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12 comments

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12 thoughts on “Does construction need a watchdog with security agency powers?

  1. klewso

    Then there was the corruption of Bob Halverson?
    What Howard, Reith and the rest of the party (so many still there) did to their Speaker (not to mention parliamentary process) – because he was “too impartial” – was “criminal”.

  2. Mick Donohoe

    The CFMEU is correct when they say construction workplaces are the most dangerous. The reason is the way the statistics work WorkSafe takes the number of deaths per 1000 employees. In agriculture the farmer, and their spouse and children, are not employees if the farm is family owned and they are not officially employed but if they are killed they count towards the number of deaths. The same with transport, an owner driver is not an employee, but if they are killed in a driving accident they count towards the deaths. So in both these cases the number of workers are lowered but their deaths are counted. In construction their are a lot of self employed contractors, but they are included in the number of employees when they work on a large site and so they count towards the number of employees in the industry where self employed framers, and their families, and self employed truck drivers don’t.

  3. klewso

    Again, these corrupt union officials only have themselves to blame for this.
    [“Corruption”? “Iraq” ($$$$$ and lives);”NPA”; “AWB”: “the buggery of East Timor”?
    “Blackmail”/”stand-over tactics”? “Triggs”; “Detention centre employees”; “cutting funding to the states to get them to agitate for an increase in the GST”?
    “Rorts”? “Parliamentary allowances x Abbott, Cousin Jethro, Hockey, Morrison, Robert, Bishop, Brandis (sorry if I’ve forgotten anyone)”?]
    If these ‘corrupt officials’ had become part of the Limited News Party in government, no one would have raised an eye-brow?

  4. klewso

    How about a royal commission into the buggery of East Timor – then we might get a “federal ICAC”?

  5. bushby jane

    Bernard, Abetz looks like he is going to ban you from being on Hobart 693 after yesterday’s discussion of this issue! He suggested that you weren’t’ telling the truth (quite strongly). I had hoped that the interviewer would suggest to him that the ABCC be extended to other efforts of corruption like in the financial and banking sectors, but never mind…

  6. Scott Grant

    I confess my general ignorance in this matter, but would it not be true that any death or injury within the home insulation industry would be lumped in with “the construction industry”? We had a Royal Commission into 4 deaths in the home insulation industry, during the Rudd government years. Where is the Royal Commission into deaths in the construction industry, during the Howard government years?

  7. CML

    Great stuff, Bernard!
    This just convinces me that we don’t need the draconian ABCC, but we DO NEED a federal ICAC….ASAP!

  8. Jaybuoy

    The ABCC’s powers could be used to require a person to: reveal all their phone and email records, whether of a business or personal nature; report not only on their own activities, but those of their fellow workers; reveal their membership of an organisation, such as a union; report on discussions in private union meeting or other meetings of workers. The provisions can be applied not only to a person suspected of breaching the law, but to: workers in the building industry not in any way suspected of wrongdoing; innocent bystanders; the families, including children of any age, of workers in the industry; journalists and academics

  9. graybul

    The price of freedom is eternal vigilance . . . all that is left, is cynicism.

    The worth of unaccountable Politicians . . . is beyond measure.

  10. Steve777

    Liberals look after their mates and attack their enemies with any tools at hand, with the approval and active support of their media allies.

  11. rachel612

    Last night on The Drum on the ABC the ill-informed Michael Pascoe said something tothe effect that if the corruption amounted the billions of dollars he thought the ABCC bill was reasonable. Of course by that token we’d be holding the execs of several banks incommunicado as a result of fraud by their investment advisors. And possibly interrogating Gina Rinehart and Nathan Tinkler about their tax affairs without a lawyer. We could get all of the former execs of the AWB to fess up without legal representation as well. Where do we stop?

    That question was rhetorical, of course. Obviously, we stop with organized labour.

  12. AR

    “the Coalition is launching a major attack on civil liberties … Evidence-based policy it isn’t”
    In other news, water is wet.
    This is NOT about the CFMEU per se but the general creeping, crawling, eager to leap & overwhelm security State.
    Vote Independent & Green.

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