The government must act immediately and use a review of the Fair Work Act to respond to the concerns of business and restrict unions’ power to unlawfully disrupt work on major infrastructure projects, the building and construction industry says.
Master Builders Australia chief executive Wilhelm Harnisch says the government needs to include industrial relations reform as part of the national productivity agenda.
In a written statement, Harnisch said last week that productivity improvements delivered by industrial relations reform could significantly improve the $76 billion plus price tag associated with 40 high priority infrastructure projects which Infrastructure Australia identified earlier this year as being vital for improving national productivity.
By contrast, Harnisch warns of a ‘blowout’ in infrastructure costs if union power goes unchecked. He cites as an example the Wonthaggi Desalination Plant in Victoria, where he says exorbitant wage increases and restrictive work practices negotiated by unions added $34 million to the cost of the plant.
“The Fair Work Act needs to be amended to restrict unions’ ability to unlawfully disrupt work, interfere with independent contracting arrangements and allow unsustainable wage increases,” Harnisch says. “If the Government ignores the genuine concerns held by business, we can expect to see the cost of taxpayer funded infrastructure continue to blow out.”
Harnisch adds that productivity in building and construction has deteriorated since the abolition of the Australian Building and Construction Commission, with the industry continuing to experience an increase in lost hours as a result of unlawful industrial action.
Harnisch’s call comes as the government is currently considering a report from the Fair Work Review Panel which was handed to Minister for Employment and Workplace Relations Bill Shorten on June 15.
That report is expected to be made public in coming weeks.
The review of the Fair Work Act follows the insertion of a requirement in the Act that the government make a review of the operation of the legislation two years after it came into force.
Harnisch says the government cannot ignore the nation’s productivity challenge in its response to the review and that, given Australia’s two-speed economy and aging population, it would be ‘negligent’ of the government not to include industrial relations reform as part of the national productivity agenda.
He says improving national productivity is a challenge for everyone.
“It’s not just up to businesses and managers to improve and innovate,” Harnisch says. “Government must play its part and provide a more flexible workplace relations system.”