Senator RHIANNON (New South Wales) (13:40): The Building and Construction Industry (Improving Productivity) Bill 2013 [No. 2] reveals the level of deceit this government will go to; it is based on so many lies. It is not about addressing criminal activity in the building industry committed by workers or by the union. It is not about corruption by those people. It is about weakening and destroying the union movement. It also runs cover, actually, for many of the big players in the construction industry—the developers of this nation. Those people, those company directors and those companies, are some of the biggest donors to the Liberal Party—many of them also to Labor, but particularly to the Liberal Party.
We need to bring the threads together here of what is really going on, because there are serious problems in the building industry—problems that have been exposed and need to be addressed. But it is not about how unions are operating; it is about how the big companies, particularly in our big cities, are treating the subcontractors, and how that whole chain of operations plays out. Tragically, so often how it plays out is that, because of corners being cut so that profits can be made, people die. And that is what should be at the heart of this debate if you want to be serious about looking at the construction industry and how it should be improved.
If we were serious about cleaning up the construction industry, the government would be tackling the culture where company directors show contempt for the law. That is being set out very clearly, particularly in the Senate inquiry into insolvency. But we see it all the time—there are so many rules that are broken and laws that are not abided by, and company directors get away with it. That is why that culture has developed.
We know that it is a serious problem because, even with the old ABCC, no company director was taken to court. How can you be serious about addressing problems in this industry if not one employer is taken to court?
Then there is the issue of political donations. I will come to that in more detail in a moment.
But first off, let us look at issues going on in the construction industry itself, where we have serious imbalances of power in contractual relationships. Market power is concentrated at the top of the contracting chain, and we are seeing a shift in how that plays out. We are seeing a shift in where risk lies. The shift is from the large principal contracting companies to those who are least able to bear it—that is, to the subcontractors, the small suppliers and the employees. This is what I mean when I say that these are the issues that need to be addressed if you are serious about really getting the construction industry onto a firm footing so that it actually meets the needs of our economy and abides by the law.
A large number of smaller-scale subcontractors that carry the burden of risk, and a concentration of market power in the hands of a few major corporate head contractors, means that those head contractors often have little regard for the competitive pressures placed on subcontractors. The situation for subcontractors is appalling in this country. As a result, the industry is burdened every year by nearly $3 billion in unpaid debts, including subcontractor payments, employee entitlements and tax debts averaging around $630 million a year—and that is just over the past three years.
Those who lose out here are the workers and subcontractors. And why? Because the government is not taking action. The government are sitting on their hands. They are happy for this shift in contractual arrangements because it gives more power to the big company owners, and the subbies, the employees, the workers and the labourers, are at their mercy.
The economic cost of insolvencies in the construction industry is staggering, and that is because of the state the industry is in. This is what should be addressed. The construction industry consistently rates as either the highest or the second-highest, against all other industries, when it comes to unpaid employee entitlements. Who picks up the bill? The public. The construction industry is sitting back. They are so happy. They have their servants in here—the likes of Liberal and National Party senators and MPs—running around and trying to set up an ABCC, and meanwhile their profits roll in. Even when they go belly up—and I will talk about phoenix companies—who picks up the cost of employee entitlements? The public purse. Taxpayers paid over $226 million from 2009-10 to September last year to employees of insolvent companies in the construction industry alone. Where does it come from? That money is through the Fair Entitlements Guarantee scheme. That has to be done. We have seen what happens in the past—remember the famous case when Mr Howard was the Prime Minister and what happened to the Manildra workers—but top industries and top company directors are getting away with it because they know they can.
The whole situation with phoenixing is absolutely huge in the construction industry and that should be addressed. Phoenixing is the fraudulent act of shifting assets to a new company to avoid paying tax, entitlement benefits et cetera. Again, it is huge in this sector. The Senate report into insolvency found that compliance with corporations law is optional for many company directors. How does that come about? It is because of the culture that has been allowed to develop. In a single year, over 3,000 possible cases of civil misconduct and nearly 250 possible criminal offences under the Corporations Act were reported in the construction industry alone. This suggests an industry in which company directors' contempt for the rule of law is becoming all too common. That is why I said it is becoming the culture. They get away with it. Why aren't those issues being addressed? Why don't we hear Minister Michaela Cash give one of her impassioned speeches about the outrages in the industry? These are the issues that are being ignored. The ABCC, I repeat, is being used for cover to allow the backers of the Liberal and National Parties to get away with some of the ugliest issues that you could see play out. I remind senators: this is a dangerous industry and people die because of the corners that are being cut when companies do not follow the law on building sites and allow safety checks to be carried out that ensure that the law is enforced.
This is how businesses are operating. There is an environment in which non-payment for work carried out is commonplace, cash flows are uncertain and businesses lower down in the subcontracting chain have little power relative to those at the top of the chain. Who is at the top of the chain? I will come to that shortly: their political donations and where they are flowing. The Liberal Party are picking up big cash because of the way they are handling this construction industry. That is something that we need to give considerable attention to. The figures are easy to find. They can be found at the Australian Electoral Commission. I have said it many times: it is wrong that the data comes out long after the election and that the public will not know who the big developers are that fund the Liberal and National Parties in this election, but we know what has happened previously and it has been happening for well over 10 years.
Croissy, which is Westfield's Frank Lowy's family company, in the financial years of 2001-02 and 2003-04 gave $300,000 to the Labor Party, and in 2001-02 gave $250,000 to the federal Liberal Party. These donations amount to hundreds of thousands of dollars rolling in from the Kingold Group of Companies, Hong Kong Kingston Investments and Furama. These are all companies that come up in the property sector when you look at the donations in detail. Big money comes in and it is having a corrupting influence on our democratic process.
We are coming up to an election and people are holding fundraisers. There was a very interesting one where Assistant Treasurer, Kelly O'Dwyer, was outed about her fundraiser being sponsored by the NAB. Firstly, it is extraordinary and it should be sung from the treetops. It is quite audacious at a time when the banking industry was further exposed in how damaging it is to our economy and how it rips off ordinary people. We have the Assistant Treasurer, Kelly O'Dwyer, holding what has been called a 'glitzy pre-election political fundraiser' with the Treasurer, Scott Morrison, to be held 10 days after the budget so that they can spruik the budget there. Firstly, that in itself is quite questionable because the budget has often been developed with great public sector input, and the Treasurer and the Assistant Treasurer are out there using it as a fundraiser. A table at this breakfast will cost between $100,000 and $150,000. These are the corrupting aspects of our political process. This is what should be investigated. I do not know which developers will go to this breakfast, but you can be sure that there will be some. I notice that the donations list I just read out includes Brunswick Property Victoria Pty Ltd. They gave $300,000 to the Liberals at a federal level in 2014-15 on a couple of occasions. They could well be there and there could be other big donors. We should be having a proper investigation into issues in the construction industry with regard to insolvency and the whole chain of command, from the big players, the big developers, down to the very exploited subcontractors. That is what we need to investigate, and we need a thorough investigation into political donations. They are the issues that should be thoroughly investigated.
I will just go back to the situation with Ms O'Dwyer. She was an NAB executive; now she is a politician—and here she is with this very cosy deal continuing with her former employer, one of the big banks. We are told that they are too big to fail. The government is refusing to have a royal commission into them. Why won't they have an investigation into those issues? It is also worth noting that at the time Ms O'Dwyer took up her job at the National Australia Bank her responsibility was to look after the extremely rich families worth more than $30 million. Now you could say that maybe her job description has not changed that much. That was her job description when she worked at the NAB, and I would say that this is the job of the government these days: it is to look after the extremely rich in this society. That is another way you can describe the ABCC.
Senator Williams interjecting—
Senator RHIANNON: I am happy to acknowledge the interjections from our senator from the National Party—
Senator Williams: Wacka!
Senator RHIANNON: I will let you say that. I would not use that one. It was good that you came in at that time, Senator, because the Nationals are out there on the hustings saying how they are the friend of the farmer and that they are in here conducting the good fight against the Liberals. I have heard them say that they are in here conducting the good fight against the Liberals and Labor. But the Nationals are in lockstep with the Liberals on political donations. They are just taking the money in and refusing to have the all-important inquiry that we need into political donations to sort this out.
Let's come back to the issue at hand about the construction industry and the ABCC. Why is it being set up? In the first instance, it is to weaken the unions and, in time, to destroy the union movement.
Senator Williams interjecting—
Senator RHIANNON: The Productivity Commission did not think that the ABCC was needed, Senator. The ABCC is a very dangerous body—my colleagues have set that out very clearly.
I congratulate the CFMEU for the work that they do on the job protecting workers' rights and promoting safety. The CFMEU have a dinner coming up in May. It is their annual dinner. I suggest that Minister Cash could learn a great deal by coming along to it. By coming to it she would see the union working with industry in a very positive way on safety. The money raised is for the Workplace Tragedy Family Support Group. It is one of the most moving nights I go to. You hear speeches from the children of people who have lost their lives and from the widows who are doing it really tough. This is money raised for them. This is why we need to get rid of the ABCC, to not allow these bills to pass and to ensure our construction industry is safe and that unions can continue to do their work.