Economy

Mar 22, 2016

When will the government stop lying about the ABCC?

The government has consistently lied about the ABCC -- it didn't increase productivity and more workers died on its watch. Time for the facts.

Bernard Keane ā€” Politics editor

Bernard Keane

Politics editor

Construction workers march in 2009 as part of a protest calling for the abolition of the ABCC

There was an interesting moment -- well one of many -- during the Prime Minister's interview on 7.30 last night when Leigh Sales pointed out to Turnbull that his claim that the John Howard-era Australian Building and Construction Commission "improved productivity by 20 per cent" in the construction industry was inconsistent with the findings of the Productivity Commission. What did the PC say about construction industry productivity? It examined the issue in its Public Infrastructure Report in 2014.
ā€œProductivity 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.ā€
That year, 2011-12, is, of course, after the Howard-era ABCC was, in the words of the former ABCC head John Lloyd, "neutered" by the Rudd-Gillard governments. Mysteriously, productivity in the construction industry surged after the ABCC was "neutered". Turnbull dismissed the work of the Productivity Commission: "I think you'll find that's not right," he told Sales. She pointed out she had the PC report right there on the table. "Well I'm sure you do," Turnbull purred patronisingly. He went on to cite the reports of "Independent Economics that show there was an increase in productivity following the introduction of the ABCC". Independent Economics is what the firm Econtech now calls itself. Econtech was the bespoke modeller for the Howard-era ABCC and its work was lauded by Howard government ministers for proving the case for the ABCC. Except its claims about the former ABCC have been discredited. In 2007, Econtech produced a report for the ABCC purporting to show a 9.4% surge in productivity in the construction industry due to the ABCC. But its methodology and data were badly flawed; in fact, the "surge" was 1.3%. A year later, an "updated" report was released by the ABCC from Econtech that quietly abandoned the claim of a 9.4% productivity rise. And in 2009, in a review of the ABCC by former Federal Court judge Murray Wilcox, Wilcox slammed the 2007 report, saying "it ought to be totally disregarded". In fact, as the Productivity Commission demonstrated, productivity in the construction sector under the ABCC was broadly flat but surged once the ABCC was "neutered":

IMAGE-1-productivityresize

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