How the government’s CFMEU response plays into the Coalition’s hands

With Australia’s federal election looming and the battleground issue being the cost-of-living crisis, the Albanese government’s decision to tread softly around the CFMEU exposes it to criticism that its actions don’t match its rhetoric on fighting inflation.

The government, and the opposition for that matter, have made an art form of belting supermarkets for alleged price-gouging, but building costs have also been going up and remain 30 per cent higher than where things were before COVID.

Prime Minister Anthony Albanese has rejected Opposition Leader Peter Dutton’s pledge to reinstate the Australian Building and Construction Commission if elected, saying the body failed to curtail CFMEU excesses when it existed.Credit: Alex Ellinghausen, Darren Howe

There are many things that contribute to the cost of building a house, an office tower or a large piece of infrastructure, just as there are many elements that feed into supermarket pricing.

And yes, while some of the elevated construction costs can be rightly placed at the feet of the construction union allegedly extorting money from building companies, the massive increase in the cost of materials (steel, timber, tiles) has been a bigger driver of higher post-COVID construction costs.

But that’s not going to stop the Coalition from narrating a story that highlights the nexus between inflation in the building sector and union misbehaviour. It is a simple message to sell: union thuggery is making construction more expensive for companies and individuals, and in turn fuelling inflation.

There will be no shortage of interested parties queueing up behind Opposition Leader Peter Dutton to support this contention.

Master Builders Australia has reportedly pointed out there’s a 30 per cent premium on CFMEU sites, and it doesn’t just contain itself to those sites. It says that if you’re paying $200,000 a year to a stop-and-go person on a CFMEU site, the same sort of salary is being doled out at projects that are non-CFMEU sites.

It’s this contagion effect across the economy that puts the Albanese government in a delicate position. Its decision to go response-lite around the latest allegations of poor union behaviour plays badly into its optics of busting the cost of living.

When calls for a royal commission, de-registering the union or reviving the (admittedly inefficacious) Australian Building and Construction Commission are dead-batted in favour of appointing external administrators, the government is not projecting the alleged corruption behaviour inside the CFMEU as a first-order problem.

A few years back, some of these issues dogging the CFMEU (alleged infiltration of the construction sector by criminal organisations, extortion and intimidation) were found to be rife in the casino sector.

Government minister and former union leader Bill Shorten.Credit: Alex Ellinghausen

In that case, state governments responded by conducting royal commissions or commissions of inquiry in NSW, Victoria, Queensland and Western Australia. The boards and senior management of casino groups Crown and Star Entertainment were replaced within months.

Meanwhile, we have dozens of territory, state and federal inquiries covering everything from telco network outages to aircraft noise.

Unsurprisingly, the limp response from the federal government on the CFMEU matter has failed to placate business groups, who have taken particular exception to comments made by cabinet minister and former union leader Bill Shorten that, “for everyone who’s doing the standover, what business person is also engaged? Because for everyone who takes a bribe there’s someone giving a bribe.”

Business Council of Australia chief executive Bran Black said he was “a little surprised by the pushback from the government ... saying for every unionist engaged in standover tactics there’s a businessperson also involved”.

It’s a fair point. The extorted don’t share equal blame with those doing the extorting.

“The ‘it takes two to tango’ response from the government serves no purpose other than to avoid taking responsibility for properly investigating what has or hasn’t occurred,” says Black.

He notes that proper investigations have been the approach regularly taken by Australian governments, pointing to dozens of territory, state and federal inquiries and suggesting the CFMEU revelations deserve similar treatment “at the very least”. Another fair point.

If Albanese continues to take a light-touch approach in response to the allegations swirling around the CFMEU, such complaints from the business world will only get louder. He also risks giving Dutton a free kick in the high-stakes political fight over the cost of living.

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