Every time there is a union-forced dislocation to building and construction projects it costs us a great deal of money and inconvenience. Costs go up and productivity goes down. Those costs eventually get passed on to consumers while people waiting for housing and construction projects to be completed just have to curb their anger.
This is how it’s been for decades – firstly with the BLF and now with the CFMEU.
Prime Minister Anthony Albanese and Workplace Relations Minister Tony Burke have taken very little meaningful action to stop them. The article below written by David Hughes, Executive Director of the Menzies Research Centre, explains why:
“Labor in! Now they must deliver … We have to actively keep our collective foot on the throats of every politician until they put through our demands.”
CFMEU boss, Christy Cain delivered this threat after the last election where his union handed $2m to ensure Labor were elected. Shortly after, in one of their first acts in parliament, Labor abolished the ABCC —the last remaining defence between utter lawlessness and corruption in the construction sector.
Industrial action in the construction sector led by the CFMEU increases project costs from 10 to 30 per cent and also decreases productivity by at least 10 percent.
Analysis from EY found that abolishing the ABCC would reduce output in the construction industry by $35.4 billion and overall economic activity by $47.5 billion, resulting in the loss of around 4,000 full time jobs. The government knew that abolishing the ABCC would be detrimental to the construction sector — yet their hands were tied as soon as they accepted the CFMEU donations and the conditions attached to it.
Anthony Albanese now seeks to distance himself from this union yet we have uncovered correspondence from the Prime Minister to the CFMEU where he endorses all of their demands and praises the union’s proud history and values he claims to share.In 2013, when Albanese was praising the CFMEU they were being investigated for coercive and threatening actions on the Royal Adelaide Hospital construction site.
Union activity on this site contributed to a $640 million cost blowout. When the hospital opened in 2017 it was the third-most expensive building anywhere in the world.I highlight this example because when we consider the costs of union lawlessness, we need to consider the impact on our economy and productivity.
The Australian construction market is broken and the CFMEU doesn’t play by any rules. The revelations this week showed how the CFMEU uses its influence to push out legitimate operators for CFMEU-aligned contractors and inflate prices as a way to get kickbacks.
This behaviour causes untold economic damage. The best and most efficient businesses are forced out or don’t even bother bidding for jobs. Innovation is stifled. Productivity is lower. Wages grow much faster than productivity. Everyone (except the CFMEU) loses, especially the taxpayer.
Meanwhile, despite declining union membership across Australia, the CFMEU’s coffers keep growing. Our analysis of CFMEU financial reporting shows that in the last 10 years, the CFMEU’s income has grown by $31.5 million or 35.5 per cent, while its assets have increased by $107.4 million or almost 70 percent.
According to the most recent figures, the Victoria-Tasmanian branch, led by John Setka, accounts for around 37 per cent of total CFMEU income and 47 per cent of assets. These figures rise to 48 per cent and 65 per cent respectively when excluding the Maritime Union Division and examining only the construction divisions of the union.
Previous MRC analysis showed how the CFMEU receives tens of millions in income from a redundancy, income protection and portable sick leave scheme called Incolink. A joint venture between unions and industry groups, Incolink receives income from employer contributions mandated under enterprise agreements negotiated by the very unions which hold a financial interest in the scheme, a share of which is funnelled back to the CFMEU as grants. Last financial year, Incolink disbursed $21 million to the CFMEU’s new “Training and Wellbeing Centre” in Victoria.
It shouldn’t take a media exposé to finally get Labor governments to act against criminality that has been an open secret for years. It is breathtaking that the Prime Minister, Labor Ministers and Premiers and union leaders are able to keep a straight face while claiming to be shocked and appalled to hear these allegations for the first time and pledging to do something.
But actions speak louder than words. The Albanese Government has set aside $89 million for a “Productivity, Education and Training Fund”, which is apparently needed to provide grants to “support and increase engagement” by unions. On Thursday it was reported that the judge being considered to lead the clean-up of the CFMEU once ran as a Labor candidate and has a long history of representing trade unions in legal disputes.
We used to measure the economic impact of union activity by the number of days lost to strike action. It is now a redundant measure — Australia’s most militant union has no need to strike — in the last few years the CFMEU have been given everything they want and more.
Strong leadership is required to purge the corrupt influence of the CFMEU, restore order and productivity to the construction industry and put inflationary cost blowouts behind us.
Unions have their place but they must be led by strong men and women acting in the best interests of workers. Bullies like Setka act out of self-interest.He likes to project an image of strength but he is weak to the core — a man who bullies and intimidates women and is driven by personal gain. As Setka’s criminal convictions grew so too did his wealth, power and influence.
None of this would have been possible without his union’s control over the Labor Party. For the last three decades, Labor have been running a ‘protection racket’ for a ‘protection racket’ and such a system can’t be dismantled overnight.”
END
Given this background, hopefully the Albanese government will show a bit of backbone and take them on like former Labor PM Bob Hawke did with the BLF.
But don’t count on it!
Thanks to David Hughes at Menzies Research Centre (https://www.menziesrc.org) and Johannes Leak for his very appropriate cartoon. Images added by author.
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