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Speech: Building and Construction Industry (Improving Productivity) Amendment Bill 2017 : Second reading

Speeches in Parliament
Lee Rhiannon 22 Feb 2017

Wednesday, 15 February 2017

Senator RHIANNON (New South Wales) (09:55): The Building and Construction Industry (Improving Productivity) Amendment Bill 2017 provides a direct insight into how this parliament operates. It is really quite ugly when you consider what has played out since we were last here in that late-night sitting, debating the ABCC. The Greens have been on the record for many years—since it was first proposed—saying that this commission should never have been brought in. We have also been consistent in our opposition to this legislation. My colleague in the House of Representatives, Adam Bandt, who is our industrial relations spokesperson, put a very clear case why this legislation should not be supported when making his speech on this bill; it is worth noting that that debate was gagged.

What I meant by my opening remarks—that it provides an insight into how this parliament works—is shown not only by how the Turnbull government does deals with the crossbenchers but by how it does not work for the common good or in the best interests of the majority of people in this country. It looks after its own constituency time and time again. We are seeing this in a crude, blatant way here. Its constituency—big business and big construction companies—were furious about what had happened and that the government had agreed to what is really a responsible amendment to a damaging piece of legislation. The amendment was not going to make a huge change, but they did not even want that. That is what is going on here. I will go through it in more detail, but the reason we are back here now, again debating about the ABCC—which relates to the building code—is to overturn that amendment. We are now going to see crossbenchers now voting against the amendment that they brought here to try to make that legislation more workable. It is extraordinary how this has played out. You might think that this is a house of review and that this is an institution of democracy, but what is going on here makes that farcical and really exposes where the influence lies.

Let us go back to that night of 30 November 2016. It was a late-night sitting, and there were discussions all over the place about what the amendment should be and how it should work. It was Senator Hinch's amendment which dealt with the building industry code. I acknowledge there are sharp differences about it. For those of us who are opposed to it, it is a very notorious and worrying aspect of how the ABCC plays out. The code is an instrument that would be made by the minister following passage of the legislation. Why is the code of such great concern to the Greens, to the unions and to working people? It is because it dictates what can and cannot be in enterprise agreements in the construction industry. This is where any decent person should really be worried and say: 'That just should not be on. We're in the 21st century. We need to have some standards here.' But, no, this is what the code would do: the provisions requiring a minimum number of apprentices, for example, or giving union safety delegates greater rights are all prohibited, if the employer wants to get any work on Commonwealth funded projects. That is what is encapsulated here. Senator Hinch's amendment was really minimal. All it did was provide for a grace period of two years before the code came into force. It did not change those very worrying aspects of the code and how the code will play out. It just provided a grace period giving the industry time to negotiate or renegotiate agreements. The amendment was supported by everyone and my recollection is that the chamber did not divide. So that is all it was. It was really allowing the industry to come to terms with these enormous changes. It was very important for businesses and contractors to be able to get their business practices in order.

But what happened? We heard Senator Cameron detail it. I was there and heard Senator Hinch fess up where he was being lobbied from. He tried to make out it was in the post office when ordinary people came up and spoke to him. He needs to tell us where the pressure was coming from—from the Prime Minister's office down out into the corporate world. How extraordinary that he has decided to overturn what is a minimal but still important aspect. We know how this place works—you get in little things to improve bad legislation. That is how we viewed it and I felt that is how he viewed it too. But sometime last week the pressure came to a head and we saw Senators Hinch and Xenophon announce that they would reverse their support for that grace period of a couple of years to get things in order.

Now this week we are back in parliament and the rush is on to get it through parliament. It was gagged in the lower house. There was a quick inquiry. It is a really dirty job being done by Senators Hinch and Xenophon and the Xenophon team. It is really disappointing. We heard some of their speeches and when I sat in the inquiry listening to them they were still saying they were committed to getting good outcomes. You cannot say this is a good outcome by any stretch of the imagination. It really now does come down to an issue of trust because what we are seeing here is that even when they secure wins—and I even find it hard to describe that amendment as a win; it was a very small step to improve dangerous legislation—they go and undo their deals. They undo such a minimal aspect of the legislation.

I cannot believe that they were not embarrassed when whoever it was from the Prime Minister's office or the corporate interests put it to them. Surely they would have said, 'It is really minimal what we did. We did it ourselves. That will look really embarrassing. We cannot go there.' But they are the ones now who are racing into the headlines to say, 'Yes, we will throw that measure that we got in place so the industry can renegotiate and reorganise considering the enormity of the changes encapsulated in the legislation that we passed last year.' That is why people are saying it looks like big business runs this parliament, runs some of the crossbenchers. I often do not say that they run the Liberal-National parties because the interests so coincide. Liberal-National parties know what their job is, and their job is to deliver for corporate interests. That is their constituency. We understand that. That is how that works.

Now we have this extraordinary situation where we have something that will actually cause chaos in the industry. Although I have said it is a minimal measure, it is still important in terms of what the industry now has to go through. If we lose this two-year grace period, what will happen will be very tough on the industry. There will be job losses and chaos. It is hard to say at the moment but I guess that it will play out to benefit the bigger construction companies. They will be favoured in how this will all work out.

The senators who are about to backflip on this need to recognise that, if they vote for this bill and it passes, it will remove transitional arrangements that were previously agreed to. The result in effect will mean immediate compliance with the new building code. Senator Hinch negotiated the grace period because immediate compliance is really impossible. Compliance will be needed by any company wishing to successfully tender for government work. This is where it is really going to sort things out in terms of who gets the government contracts.

The evidence to committees and discussions in the media have highlighted that there will be chaos in the building industry. That came through very clearly when we had the inquiry on Monday. Thousands of agreements will need to be negotiated and renegotiated. That is a huge amount of work. Many companies will not be able to tender for government work over the next 12 months as agreements covering the workforce will not comply with the Building Code. That is the essence of this situation. It just cannot be done. That means there will be many contractors—large, small, middle-sized contractors—who will be affected. The CFMEU has estimated that there could be 3,000 contractors affected. The job losses and dislocation will be huge.

We hear from the government side so often about the pressures the government is under and the pressure businesses are under and how they have to manage red tape. What this legislation will do to the contractors in the businesses involved in the construction industry is require them to expend more resources in preparing tenders in the almost three months since the most recent changes were made and all their efforts in trying to achieve that could amount to nothing. That renegotiation will be time consuming and it will be costly, and so many of the tenders already prepared in what we know is a costly process could well be wasted.

What does it mean? It means that experienced and qualified contractors who have got settled industrial agreements and have their employees in place will be punished for nothing more than because Senator Hinch has been embarrassed or wants to be inside the Prime Minister's club and has decided to backflip on his own agreement. You cannot call the Senate a house of review today.

Other evidence that was given at the inquiry was that many contractors could well be afraid to oppose the changes publicly, because to do so would damage their commercial interests. So to say that there is no business voice expressing concern about this denies the reality of how the construction industry works. We know it is a cutthroat industry, we know it is tough, and this amendment is just going to throw it in more disarray.

It is also important to share with the Senate some important evidence that was given by the Electrical Trades Union. They highlighted about the electricity sector—

Senator Seselja interjecting—

Senator RHIANNON: I acknowledge the interjections from the Senator—always happy to get that on the record, Senator Seselja. The Electrical Trades Union highlighted how the electricity sector in states such as South Australia could be harmed by the passage of the legislation and the code, as employers—this is the key bit—seek to widen its coverage beyond the building industry. So it looks as though South Australia is where this is first going to happen. It was always one of the major concerns, and it was recognised that when the government started on the course of bringing in the ABCC and the Building Code they were attacking that sector of the industry first and then it would be expanded to other areas to make it harder for workers to collectively organise, to go on strike and to work for safer conditions on the job, for better conditions and for fair pay and conditions overall. It was always the concern that it would go beyond the building industry, and here is evidence given to a parliamentary inquiry that that is about to happen.

This again is where the senators on the crossbench should recognise and understand what they are signing up to. The government might make out that it is being responsible and that this is about controlling industry and making it work more successfully, more productively, more efficiently, more professionally—all those words that it comes up with—but the reality coming out of South Australia is that the electricity industry, which has not had industrial disputes for decades, could well now be going into a very unsettled period because something similar to the Building Code could be imposed there.

Did Senator Hinch learn about that when he was sitting down at the Prime Minister's table saying that, yes, he was happy to roll over and get rid of his own minimal amendment? My guess is, no, he has not been informed of the fall implications of what is going on here with his own amendment and with the wider way that this Building Code will work.

We also need to recognise that the public will be harmed by this bill. This is from the CFMEU submission to the inquiry:

Because of the reduction of eligible contractors, Australian taxpayers will be deprived of the benefits of the ordinary competitive commercial tender process that is essential to the delivery of quality and value-for-money construction work.

Again, how could one deny that that should be the basis of how public works are undertaken? Isn't that the right way to get value for money and to ensure that we have good outcomes here that are financially responsible? That is another aspect that is going to be lost in terms of how this is all playing out.

In terms of the evidence in the submissions that came before the committee inquiry about this legislation, first off, I am certainly happy to put on record that I thank those who came forward very quickly to do that. What much of the evidence in the submissions set out is that the Building Code will prohibit from agreements clauses that limit the casualisation of the building industry, those that set apprentice numbers, those that limit access to overtime on health and safety grounds or those that restrict the use of foreign visa holders in favour of local workers. So we are going to lose all those areas under this Building Code. That is really insidious at a time when there is growing youth unemployment. We know it is getting harder to get apprenticeships. And now setting apprenticeship numbers cannot be included in the agreements. Issues of health and safety are locked out. That should be fundamental to how all these agreements are negotiated. Again, I include that to remind ourselves of how damaging, backward and dangerous the Building Code is and the ABCC that is driving it.

The code will also allow the reinstated ABCC to rule many other areas of enterprise agreements that are favourable to workers as noncompliant. So it does not stop what I have just listed—limiting the casualisation of the building industry, issues to do with apprentices, issues to do with health and safety and restricting the use of foreign visa holders. It does not stop that. If the pressure has come from big corporate interests involved in the construction industry in wanting to overturn this very minimal, responsible amendment, surely they will be out there pushing hard for there to be further measures deemed to be noncompliant.

We are in a shocking situation with how this is playing out right now. There was this compromise position that was reached last year. Again, let's remind ourselves: it reflected the view of the majority of the Senate. No division was called. It was seen that it was a responsible measure. At that time, we congratulated Senator Hinch and his staff for working on it so thoroughly. Again, I have called it minimal, but that is what we do in this place when we have legislation that we disagree with—we come forward with these measures to try to save something.

Senator Seselja: No you don't; you just vote against it!

Senator RHIANNON: I am happy to acknowledge Senator Seselja trying to come in on the debate. As was discussed at the time, the amendments would have allowed a more realistic time frame for the industry to transition to new agreements that complied with the code. I wanted to give that some recourse. That is the essence of the bill now before us. It is not setting up the ABCC or the Building Code; it is just around that issue of dealing with the transition to new agreements that comply with the code. The grace period has been thrown out.

It is deeply shocking that we have arrived at this point. We have seen the Xenophon team and Senator Hinch come forward with a useful suggestion, and now they have smashed their own suggestion. The trust that one builds up in this place in terms of how one works together has clearly been damaged or, one could say, removed entirely. It is not just that they have reversed their position on a vote but they have reversed their position on their own amendment—their own suggestion that they brought in here to try to salvage a serious problem that they identified, recognised and came forward with a view on. Well, the government still gets what it wants; it just has to wait a bit longer.

The trust has gone: the backflips that we have viewed are extraordinary. I would really urge the crossbenchers—and it looks as though they have done a deal—at this late stage to reassess what they have done, recognise that they did the right thing back at the end of 2016 and that this bill should not go through.

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