Backlash as Labor neuters Australian Building and Construction Commission

Labor’s plan to immediately cut the powers of the Australian Building and Construction Commission has ignited the first major backlash from business and employers.

Tony Burke says ‘I’m yet to meet the economist who believes union logos on stickers and safety signs have an impact on inflation’. Picture: AAP

Labor’s plan to immediately neuter the construction watchdog has ignited the first major backlash from business and employer groups, which are warning of ­delays and cost increases on vital projects and the revival of union bullying and intimidation on worksites.

Workplace Relations Minister Tony Burke on Sunday announced that Labor would amend the building code to ensure the powers of the Australian Building and Construction Commission would be “pulled back to the bare legal minimum” ahead of the body’s promised abolition.

Its powers will now be shared between the Fair Work Ombudsman and state-based health and safety regulators, despite longstanding arguments that the construction sector – worth more than $140bn to the economy – needs industry-specific oversight and regulation.

Employer groups demanded more information on how the ­sector would be regulated and ­offered to work with the government on the next steps.

They also warned that the changes could endanger workers, with Australian Industry Group chief executive Innes Willox saying drug and alcohol testing requirements would be weakened.

“Workers should not have to risk their lives or limbs by working alongside other workers who are impaired by drugs or alcohol,” he said.

Unions welcomed the announcement, arguing that the building code imposed a host of anti-worker requirements on companies, including the banning of union flags, controls over workforce casualisation and guarantees on apprentice numbers.

Construction union boss Dave Noonan said the code had stopped unions and employers from bargaining “due to provisions banning apprentice ratios, Indigenous employment clauses, measures to promote women in construction and even banning workers from wearing union logo stickers on their hard hats”.

The clash comes ahead of the first sitting week of the new parliamentary term, with the government under pressure over the rising cost of living, a new cycle of aggressive Reserve Bank rate hikes, inflation on track to reach at least 7 per cent by December and a Senate battle over Labor’s plan to enshrine its 43 per cent emissions reduction target in law.

Business Council of Australia chief executive Jennifer Westacott said she wanted to “work with the government to safeguard the integrity of the building and construction industry because it is critical to the Australian economy”.

“While this is an election commitment, it can’t allow a toxic ­culture of bullying and harassment to take hold in the sector, sap productivity and drive up costs even further,” she said.

Mr Willox said the announcement from Mr Burke was a “backwards step for the fight against bullying and intimidation”.

Master Builders Australia chief executive Denita Wawn said the government had not released the detail on the regulatory framework it planned to put in place for the industry.

“The building and construction industry requires industry-specific regulation and over­sight,” she said. “Economic modelling by EY has found scrapping a specialist construction regulator will drive up inflation just when the Reserve Bank is increasing interest rates to tackle inflation and will result in a reduction in economic activity by $47.5bn by 2030.”

She said “leaving the construction sector without a specialist regulator” was a poor decision when gov­ernment action “should be about fighting inflation, protecting growth and boosting ­productivity.”

Mr Burke rejected any connection between the abolition of the ABCC and broader inflationary pressures facing the economy, telling The Australian “I’m yet to meet the economist who believes union logos on stickers and safety signs have an impact on inflation”.

Labor pledged before the election to abolish the ABCC and will introduce legislation by the end of the year to scrap the body but the amended building code defanging the ABCC will take effect on Tuesday.

It was described by Mr Burke as a “down-payment” on the government’s commitment.

“The ABCC is a politicised and discredited organisation established by the previous government to target workers purely for ideological reasons,” he said. “It was set up by the Liberals and Nationals to discredit and dismantle unions and undermine the pay, conditions and job security of ordinary Australian workers.

“The ABCC’s record proves it has been more concerned with pursuing and punishing workers than tackling rampant wage theft and compromised safety standards.”

Mr Burke said the FWO would take on the “role of enforcing the Fair Work Act in the building and construction industry” along with responsibility for all litigation commenced by the ABCC.

The government would keep the Federal Safety Commissioner and a review into its effectiveness would be conducted.

ACTU Secretary Sally McManus said the building code was one of the “ideological projects of the previous government” that “stopped progress on apprenticeships and skills in the construction industry and did nothing to address safety or wage theft.”

Electrical Trades Union nat­ional secretary Michael Wright said construction workers could now “bargain for the basic principle of same job, same pay in enterprise negotiations.”