Why Should the Community Pay a Building Union Tax? 4

Thursday, February 25th, 2016
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The issue of tax, how we raise and how we spend it, is one of the major conversations that we are having ahead of the 2016 Federal Election.

Tax changes are always controversial because, let’s face it, no one like paying more taxes. But at the same time, as a nation, we are demanding more and more from governments. The last thing the community needs is a ‘building union’ tax.

The community demands more government spending on schools, hospitals, roads, education and health care – all of which place massive pressures on the public purse.

Premiers Jay Weatherill and Mike Baird have identified major future funding gaps to pay for hospitals, education and other necessary infrastructure works in their states, and have used this as an argument to increase the GST to 15 per cent. At the same time, most other states and territories are facing structural budget deficits.

As a nation, we have to make difficult decisions, but as the Prime Minister has said, the tax reform debate so far this year has focussed too often on raising taxes rather than on how taxes are spent.

It is not only a question of what money is spent on, but how the money is spent. In simple terms, are we getting value for money when spending taxpayers’ dollars? After all, spending tax dollars more effectively to get the best value for money reduces pressures to increase tax in the first place.

The construction industry can and must make a contribution. It is the construction industry that translates policy objectives like more hospitals, schools and other community infrastructure into a physical reality.

It does this with increasingly scarce tax dollars in a fiscal environment of structural government deficits.

But the construction industry faces a problem. We face impediments that increase the cost of building hospitals, schools and other much needed publicly funded community projects by an extra 10 to 30 per cent. Not only is it unnecessary, but it effectively acts as an additional tax on the community about which it is generally unaware – a ‘building union tax’ as it were – where taxpayers pay more for the things the community needs.

Why is this so?  The answer lies in the compelling and damning evidence found in the six volume Final Report of the Heydon Royal Commission. The report documents in forensic detail how the building unions’ ingrained and institutionalised culture of unlawfulness causes cost blowouts of up to 30 per cent for taxpayer-funded projects.

Worse, these additional costs are imposed on the community because of systemic and in-ground culture of lawlessness exhibited by building unions. This culture has been endemic for at least 30 years and found to be so by numerous Royal Commissions, including an inquiry instigated by a Labor Government.

As a nation, we cannot allow the unnecessary cost blowouts for our hospitals and schools to continue, especially when there is a proven fix that we know can deal with it. That fix is the restoration of the powers of the Australian Building and Construction Commission (ABCC). It worked between 2005 and 2012, when the costs of construction fell due to increased productivity and the absence of unlawful industrial thuggery.

As the tax debate continues, most taxpayers will have a strong view about the prospect of paying more tax. Equal attention should be given to how that tax is spent and why the hospitals and schools it pays for are costing up to 30 per cent more than they should.

The case for the return of the ABCC is compelling.  If nothing else, why should the community pay what amounts to a ‘building union tax’ because of some unions who believe they are above the law? Clearly they should not and the restoration of the ABCC will ensure this.

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  1. Barry B

    The unions are envenomed parasites on the Australian body economic – those CFMEU T-shirts emblazoned with fanged snakes are telling in the extreme.

    • Robert Johnson

      No one can doubt the the construction sector needs to be cleaned up and that some of the union behaviour we have seen over the recent past has been disgraceful.

      That said, when it comes to productivity, we need to seriously consider workplace issues but not forget about broader issues with regard to the fundamental nature of how projects are being delivered. Are we really collaborating, challenging existing practices and assumptions and constantly looking for better ways for things to be done (not to mention ensuring that we are donig the right things) or are we simply doing things the same old unproductive way because that is the way we have always done them? That's where the fundamental heart of improving productivity lies.

      Furthermore, on the specific subject of workplace relations, surely it is not just unions who are the problem? How about all the sham contracting, the underpayment of workers (esp. foreigners) and the fundamental breaches of safety which go on?

  2. Rob T

    At least this is a one off cost and IF it went to support union members would balance the power of developers and builders in similar sweetheart deals for rezonings, approvals and contracts, that don't seem to have the same impetus for tax payer funded multi-million $ royal commissions. Not like the recent wholesale de-engineering of government departments organised by lawyers and accountants to improve "efficiency" but according to the Federal Infrastructure Inquiry costs 20% more (billions) when the government becomes an uninformed client. Worse still, specifications if completed before issue and in recent examples they are not, are so inadequate (often under time pressure from artifical political timetables agreed by non-engineers) that the project, by ribbon cutting time, builds in huge excess operating and maintenance costs for a lifetime. Engineers might be expensive to employ, but not employing them is even more expensive for tax payers and they can't even see it.

  3. lous

    You`re absolutely correct we do have a building union tax for large projects in Australia .It costs the Australian tax payer an extra 20 to 30% in costs . Productivity is a joke , the unions measure productivity in how much money they can extort out of the economy instead of improving their output .