IR Red Tape Strangles Construction Sector

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Friday, March 28th, 2014
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Industrial relations has emerged as the biggest area of regulatory burden for the construction sector in Australia, according to the latest survey.

As the Abbott government seeks to reduce the compliance burden on business, the Australian Industry Group (Ai Group) National Survey: Burden of Government Regulation reveals that 95 per cent of CEOs surveyed who operated within the building industry expected industrial relations and occupational health and safety to be either a ‘high’ or ‘medium’ burden on their business in 2014.

Burdens associated with payroll and state taxes, national company taxes & GST and environment and infrastructure and planning were also deemed significant.

The report lists detailed examples of common areas of complaint, including union right of entry to workplaces, employees’ claims of unfair dismissal, restrictions on flexible work arrangements, inconsistent regulation of employee compensation such as long service leave and inconsistent legislation regarding OH&S across different jurisdictions.

It notes that average numbers of right of entry permits issued across the country, for example, rose from around 300 per quarter in 2010 to 420 per quarter in 2012.

The report also notes that while some governments at federal and state level have taken steps to harmonise some construction related occupational health and safety regimes, refusal on the part of Victoria and Western Australia to take part adds complexity for firms which operate across borders or move work locations for new projects.

More broadly, industrial relations also emerged as the single largest area of burden on a national scale, with 83 per cent of CEOs across all industries listing this as a significant area of burden within their business.

 construction inhibitorsThe report follows the Abbott’s government’s ‘repeal day’, under which the government introduced legislation to repeal more than 10,000 of what it says are unnecessary and counterproductive pieces of legislation and make dealing with government easier for business – efforts which have earned the praise of industry groups such as Master Builders Australia.

As well as big ticket items (i.e. the creation of a one-stop shop for environmental approval of offshore petroleum developments in Commonwealth waters, allowing national businesses to operate under a singular workers compensation scheme and of course, and the repealing of the carbon and mining taxes, the last of which was opposed by opposition parties), the government wants to simplify compliance in construction and other industries in smaller ways, such as by removing a requirement to register slow moving machinery such as concrete mixers or ‘wacker packers ‘ used to compact soil under the Personal Property Securities Register and creating a simplified template for business applying for small government tendering contracts.

Ai Group chief executive officer Innes Willox says more needs to be done to reduce the regulatory burden on business.

“Australian businesses face regulatory burdens that are far too high” Willox says. “These burdens have been rising over recent years and they are dragging down our international competitiveness,” he said. “Making real inroads will require a concerted effort over a number of years and will require tackling the major areas of regulatory burden on Australian business.”

Across the nation, a total of 241 CEOs took part in the survey.

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