It's no wonder the ABCC is an election issue
Since the Gillard Labor government scrapped the Australian Building and Construction Commission (ABCC) four years ago, rising disruption to building sites and unlawful industrial action has been costing the nation’s households between $777m and $3.88bn annually, to reach a total of almost $14bn by the end of last year.
It’s no wonder therefore that when the Senate refused to pass the Turnbull government’s legislation to restore the Commission, the Prime Minister was willing to call a double dissolution election on the issue.
The decision’s rationale
Master Builders Australia (MBA) has urged the government to resurrect the ABCC on the basis of these figures derived from modelling by Independent Economics indicating economic benefits that can flow from construction industry productivity have dropped by up to 5%.
The government has built its argument for the Commission’s restoration on Australian Bureau of Statistics (ABS) data. This shows that because the ABCC is more powerful than the current industry regulator -- the Fair Work Building Industry Inspectorate – the Commission’s restoration would yield a 20% productivity increase.
Meanwhile the industry’s Performance of Construction Index has started the year by slumping 0.5 points to 46.3, remaining below the 50-point level that separates expansion from contraction.
The sector’s recent dependence on robust residential construction has been threatened by apartment building’s return to negative territory after six months’ expansion, and by home construction’s pull back from record levels last year.
Commercial and engineering construction also look set to remain sluggish throughout 2016.
But particularly disturbing in Macks Advisory’s view is a sector analysis showing that businesses operating in the Australian construction industry are most at risk of going under in the next 12 months. That is ahead of professional, scientific and technical services, and retail, manufacturing, transport, postal and warehousing businesses, in that order.
Even if the Turnbull government is returned at the election, the subsequent reinstatement of the ABCC, which would at least help to ensure building and construction companies henceforth get a fairer go from unionists than they’re getting now, will likely be too late for too many of them.
For more information, contact Macks Advisory on 08 8231 3323 or visit our office at Level 8 West Wing, 50 Grenfell Street, Adelaide SA 5000.
