Labor wrecking ball is demolishing building sector

Builders are collapsing at record levels amid a spike in strikes following Labor’s abolition of the building watchdog, with 47,100 days lost to industrial disputes on construction sites last year.

Tens of thousands of workers march after walking off work sites in protest against the forced administration of the construction arm of the CFMEU. Picture: AFP

You can now listen to The Australian's articles. Give us your feedback.

You can now listen to The Australian's articles.

Building companies are collapsing at record levels amid a dramatic increase in strikes following Labor’s abolition of the building watchdog, with projects facing ­lengthy delays and cost blowouts after 47,100 days were lost to industrial disputes on construction sites last year.

The surge in industrial action targeting the construction sector has coincided with 3445 building firms plunging into insolvency over the past 12-months, as builders are strangled by labour shortages, high costs, red tape and approval delays.

Facing a perfect storm fuelled by Labor’s industrial relations laws and abolishment of the Australian Building and Construction Commission, cumbersome planning systems and soaring regulatory costs and taxes, industry leaders have repeatedly warned Anthony Albanese that he will not come close to delivering on his pledge to build 1.2 million new homes by mid-2029.

Ahead of next Tuesday’s federal budget, Australian Bureau of Statistics figures reveal 65,100 out of the 415,500 working days that have been lost to industrial action across the economy since April 2022 have directly hit the construction industry, with the bulk of activity occurring in 2024.

Analysis by The Australian shows the 415,500 total days lost to industrial disputes between the June 2022 quarter and December 2024 quarter represents 1137.6 years, or 597.5 days lost for every weekday.

Building industry sources said Australian Securities & Investments Commission data showed 7661 construction firms became insolvent between June 2022 and March this year, constituting about 26.5 per cent of the total 28,962 insolvencies lodged across the economy in the same period.

As Peter Dutton ramps up the pre-election attacks on the Albanese government in the wake of new revelations about alleged illegal conduct by militant CFMEU officials, Coalition analysis of ABS data reveals the cost of building a new home has risen by more than $120,000 in NSW and by an extra $87,960 in Victoria, which has ­become the industrial dispute capital of Australia.

The analysis shows delays in building a new home in NSW have increased by 45 days in three-years, while it now takes on average 136 more days to complete a home in Western Australia.

The opposition says there were 616 industrial disputes from the September 2022 quarter to the ­December 2024 quarter, which is almost double the 334 recorded over an equivalent period under the Coalition.

In Victoria, which has been rocked by more CFMEU scandals, there were almost 28,000 working days lost to industrial disputes between October and December last year, well ahead of NSW’s 15,000.

ABS industrial action data reveals that since Labor struck a deal with crossbenchers to abolish the ABCC, which ceased operations in February 2023, industrial action in the construction sector is tracking back towards pre-ABCC levels.

The figures show that in the September 2024 quarter alone, 59 per cent of the total working days lost across the country were in construction. Late last year, tens of thousands of union members staged mass walkouts across the country in protest against the forced administration of the construction arm of the CFMEU.

With the Coalition committed to restoring the ABCC, Mr Dutton this week promoted US-style racketeering laws giving new powers to police to tackle organised crime in the construction industry, and pledged to tighten fit-and-proper-person tests.

The Opposition Leader and industry leaders are also pressuring Labor to deregister the CFMEU.

An Albanese government spokeswoman said deregistering the militant construction union would “allow it to operate without any regulation, with the worst ­elements free to run rampant on construction sites again”.

“Peter Dutton’s reckless plan for the CFMEU would hand control of the union back to the very criminals we are beginning to remove. The Coalition allowed this criminality to flourish in their decade in office, while their failed ABCC prosecuted workers for having union stickers on their helmets,” the spokeswoman said.

“Recent investigations into the Australian construction industry show corruption and thuggery thrived while the ABCC was in place. It did not eradicate nor discourage this behaviour. The appropriate response to criminal activity is a police response.”

After abolishing the ABCC, the government granted the Fair Work Commission additional powers and resources to prosecute unlawful conduct in the construction sector by unions and employers. The spokeswoman said: “While we support the rights of workers to take protected action, we note the general rate of industrial disputes remains low compared to historical trends.

“Under the Albanese government, on average around 2.2 working days have been lost per 1000 employees, compared to an average of 2.4 working days per 1000 employees under the former ­Coalition government,” she said.

Senior Liberal frontbenchers Michaelia Cash, Angus Taylor, Michael Sukkar and Sussan Ley attacked Labor for driving up costs for families, implementing constrictive union-backed IR laws and failing to stop the CFMEU’s bad behaviour.

Senator Cash said “the increase in disputes is a direct result of Anthony Albanese’s disastrous decision to abolish the ABCC and hand control of the construction sector to his CFMEU donors”.

The opposition workplace relations spokeswoman said the ABCC reduced working days lost to disputes from around 57,000 to consistently below 20,000, and over six-years litigated more than 2500 law breaches resulting in more than $17m in fines.

“This is costing our economy dearly and driving up the cost of housing and infrastructure. Labor took away the ABCC because they imposed millions of dollars of fines on the CFMEU. What we are now seeing is more strikes, more chaos and criminal elements throughout the construction sector,” Senator Cash said.

Mr Taylor, the opposition Treasury spokesman, said “Australian families and small businesses are paying the price for Labor’s blind eye to construction industry lawlessness”.

“Labor’s bad workplace laws are making it harder to do business and are driving up costs to consumers. Labor’s abolition of the building watchdog is being felt across the economy. Labor’s policies are driving up prices, reducing competition, and dragging productivity to levels unseen around the world,” Mr Taylor said.

Mr Sukkar said the ABS data showed the hidden cost of CFMEU control of the building sector. “Construction costs are at record highs and this is leading to fewer homes being built. The Coalition will not accept a situation where a generation of Australians do not have the same opportunities for home ownership, just because Labor wants to appease their paymasters in the criminal CFMEU,” the opposition housing spokesman said.

The government spokeswoman said Labor was “funding more housing, supporting more tradies to get on the tools and pushing states to reduce red tape”, and blamed global impacts and the Coalition-era HomeBuilder program for driving up construction costs.

In addition to 7661 construction firm insolvencies since mid-2022, other sectors hit hard include hospitality (4476), retail (1884) and manufacturing (1478). After factoring in more businesses in a larger economy, the Albanese government says the level of corporate insolvencies as a proportion of all companies in 2023-24 was lower than the long-term historical average of 0.42 per cent between mid-2001 and mid-2023.

Ms Ley, the opposition small business spokeswoman, said “29,000 businesses have gone bust since Labor took office”.

“Three years of Labor’s economic vandalism and the Prime Minister turning a blind eye to the CFMEU has hit housing hard too – new build numbers are falling and more than 7600 construction companies have folded,” she said.

Additional reporting: David Tanner