BPIC policy axed: Qld govt ends $17bn ‘CFMEU tax’ on construction
Queensland has permanently axed the controversial “CFMEU tax” on major infrastructure projects, with the government claiming it will save taxpayers billions and speed up construction.
The “CFMEU tax” for all Queensland infrastructure projects worth more than $100m has officially been axed by the state government.
The government is preparing to announce a new construction procurement policy to replace the controversial Best Practice Industry Conditions, which industry has repeatedly claimed made building more expensive.
BPIC, referred to as the “CFMEU tax” by the LNP, will be permanently banned from January 1.
The procurement policy, founded by Labor, was set to add $17bn to the state’s infrastructure pipeline before being paused by the LNP government last November.
But workers and builders can still negotiate enterprise bargaining agreements with conditions similar to BPIC, limiting the impact of the ban.
Public Works and Housing Minister Sam O’Connor is set to announce the permanent ban on Tuesday, fulfilling the first of 64 recommendations from the Productivity Commission review into the building industry.
“The CFMEU tax pushed up prices, slowed projects and locked local contractors out,” he said.
“Under BPIC, Queensland had one of the lowest worksite productivity rates in the nation, this will restore productivity, end the BPIC cost blowouts.
“Together with our new procurement policy, this is a major step in saving taxpayers billions and getting crucial housing and infrastructure delivered faster.”
The CFMEU has argued that the scrapping of BPIC would slash tradie wages and make worksites less safe.
“Slashing wages and conditions for Queensland construction workers won’t deliver public infrastructure quicker and it won’t fix the skills shortage,” CFMEU QLD/NT Branch Executive Officer Jared Abbott said.
“Queensland needs a strong procurement policy that guarantees safe worksites and creates opportunities for young Queenslanders to build beyond 2032.”
Queensland Major Contractors Association chief executive Andrew Chapman argued that productivity had lifted on construction sites by 25 per cent since BPIC was paused last year.
“We have seen productivity lift from less than 60 per cent to around about 85 per cent,” he said.
Mr Chapman said unions were being more flexible with their EB negotiations with contractors but cost impacts on projects would take time to come down.
“We were running at very high construction CPI increases,” he said.
“We are still higher than other states because there are remnant impacts of that and still flowing through the industry, but we are certainly not seeing the double digit cost increases that we saw in the previous couple of years.”
A spokesman for Opposition Leader Steven Miles said Labor would be closely watching the changes made by the government and evaluating them before taking a comprehensive range of commitments to the next election.
Analysis released by the Queensland Major Contractors Association found BPIC deals increased project costs by between 20 and 30 per cent.
The government used this percentage to forecast a $17.1bn cost blowout on the state’s now $127bn construction pipeline, should the policy be applied to their upfront cost.
Association CEO Andrew Chapman hailed the permanent axing of BPIC, saying it would help mend construction relationships.
“Their permanent removal restores balance and stability to the industry, allowing contractors to work constructively with employees and representatives to deliver projects safely, efficiently, and with better value for taxpayers and results for Queenslanders,” he said.
The state government will now unveil a new procurement policy for taxpayer funded projects.
Industrial Relations Minister Jarrod Bleijie has previously stated the government would not water down existing workplace health and safety standards in its contracts with industry.
“Workers deserve safe workplaces and will, but productivity must return to construction sites.”
But it is expected the new policy will alter fixed roster days off timetables.
Separate analysis undertaken by Master Builders Australia showed Queensland construction sites lost up to 96 days each year when BPIC was applied in full.
The governments full response to the Productivity Commission review will be handed down in January.
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Originally published as BPIC policy axed: Qld govt ends $17bn ‘CFMEU tax’ on construction
