The next two weeks in the Senate will have a profound effect on Australia’s construction industry no matter what happens.
The ideological wrecking ball being swung by Employment Minister Eric Abetz to tackle a recalcitrant CFMEU clearly has no hope under the current ABCC legislation soon to return to the Senate.
This ideology oscillates depending on which of the major parties is in power. Labour, which tends to side with the unions and the Coalition, which caters to powerful employer associations, are the extremes. The losers are the more than 200,000 construction enterprises registered in Australia, the one million people who work in the construction industry and, perhaps more importantly, construction’s clients.
Senator Jacqui Lambie has declared she is against legislation that prevails on one side of the industry over the other. In the case of the ABCC, the target is the unions. Let’s be clear on one thing: the unlawful and disruptive tactics employed by the CFMEU have to stop. So does the continuation of new enterprise agreements that include double digit inflation wage adjustments and benefits without commensurate and independently verified productivity improvements. It’s a two-sided case.
Senator John Madigan has also signalled his intent to vote down the legislation because he sees it as an affront to the idea that “all individuals” should be treated equally before the law. That’s a nice idea if the disrupters, like the CFMEU in this instance, were not out of line. The reality is that the concept of “all individuals” should be extended to construction clients who have no voice in the dealings of an industry accountable to no one and whose out of control costs are hurting the economy and Australian households. Political actions need to apply a public interest test.
Senators Lambie and Madigan sit at a unique crossroads in Australia’s political history. This is certainly the case for Australia’s construction industry, where the schoolyard battle between labour and capital has gone on for so long no one can remember who started it.
These Senators could force the setting up of a roots and branches review of Australia’s construction industry. They could ensure this is conducted with voice being given equally to all stakeholders. What is not needed this time is a consultative process that simply turns into a last group hug as the industry sinks. There have been too many of these and the results have been more of the same.
It appears the Abbott government has come to power with an unresolved agenda, as evidenced by last year’s budget and the ABCC legislation. Another example was one of the first acts of the government at the 2013 COAG meeting, where the jettisoning of nationally important policies such as the harmonisation of construction standards, compliance, builder licencing and security of payment were sent back to the states to sort it out for themselves.
Now the Senate has observed that contractor insolvency in construction is so serious that it has called on its own enquiry. For what?
Australia’s federation of construction both politically and through industry associations will not create the leadership construction now needs in a rapidly changing global construction market in which we are but a minnow. Global construction is undergoing a transformation which sees it taking on many of the characteristics of other industries now driven by the ethos of quality up and prices down. That’s what happened to the motor vehicle industry, and its happening in construction.
The Australian construction industry has been shielded from the most recent of these dynamics, first by the Rudd government’s GFC economic stimulus efforts and then the need to ramp up the momentum of construction in the post-mining boom economy to save jobs by relying on the Reserve Bank’s use of record low interest rates. All of these actions only delay the inevitable, and the big questions around where the post mining and construction boom jobs will come from remain.
Talk to anybody in the construction industry these days and they will tell you the horse has bolted. Successive governments at the state and federal levels have progressively abandoned this industry by dismantling the nation’s public works procurement capabilities and changing portfolio ministers so frequently that a temporary post covering construction can be flicked to any mug who has no idea how to contribute to turning things around. This has led, for example, to the progressive diminution of industry standards and the bodies supposedly with oversight of compliance and accreditation.
When it comes to lifting productivity, there are no incentives to change current practices. This will involve shining a light on the performances of the industry’s professionals and construction managers who all operate to protect their position in a food chain driven not by innovation and value add, but by bid shopping and squeezing margins.
It’s time to challenge the obvious waste and associated costs imposed on a dysfunctional industry supply chain through procurement processes long past their use by date. The defence that it’s the unions alone is no longer sustainable.
What Senator Abetz needs to understand is that the design, organisation of work and procurement practices in the construction industry are determined well ahead of a single construction worker starting on site. That is an informed buyer and management issue that can no longer be shrouded in process driven tendering where tick the box compliance with tender codes is deemed to deliver best value for money. They don’t, and it’s time to change them. Hiring more lawyers and quasi-construction consultants will not bring the insights needed to remap these processes.
This year, I estimate that over 50,000 new constructors and related professionals will start their careers in Australia. I estimate that over one million people will start their construction careers around the Asia Pacific Rim. I have spoken to employers, unions and academics about how they see this new cohort of constructors being introduced to a more competitive, industrialised and globalised industry. I have asked how these institutions might be preparing new constructors for the skills they need in an industry that will see a radical transformation of how projects are conceived, how construction jobs and work will be redefined and how they are sowing the seeds of better, smarter, faster and cheaper in the minds of the next generation of construction leaders.
I will not bore readers with a sorry narrative of the evidence that I can table to reinforce the dire state in which Australian construction now finds itself. My challenge to Senators Abetz, Lambie, Madigan and others is not to crash the ABCC legislation into the wall, but to hold it up, to reshape an urgent and accountable productivity and innovation blueprint applicable to the whole construction industry. It’s time to smoke out the laggards and reposition Australian construction in a global context that reflects what’s happening elsewhere and make sure we are part of it.
My challenge to Senators is to set aside some time to come to the construction edge and see what is happening, to see the waste and dysfunction that is defended by the status quo. With these insights they may then be in a position to reshape the ABCC legislation into something profoundly meaningful. Something that might lift the potential for Australian contractors, workers and students.