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A Bunch of Complete Crap (ABCC)

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In 1984, after several ad-hoc royal commissions into crime and corruption (at least nine in 14 years), the National Crime Authority (NCA) was established to act as a standing crimes commission. In 2003, after 19 years of successful operation, the Federal Government decided to amalgamate the NCA with the Australian Bureau of Criminal Intelligence and a small section of the Attorney-General’s Department, and call the new agency the Australian Crime Commission whose goal was to reduce the ”serious and organised crime threats of most harm to Australians and the national interest”, and to ”disrupt, disable and dismantle criminal enterprises through enforcement, regulation, policy and legislation”.

If there has been organised crime infiltration of unions and entrenched corruption linked to construction contracts, they are the body who should be investigating.  After all, they have the computers, the staff, the intelligence holdings and the existing links to all law enforcement agencies.

Instead of using these existing bodies, both John Howard and Tony Abbott insisted on spending hundreds of millions on Royal Commissions to crack down on union corruption despite the fact that testimony given to a Royal Commission cannot be used to prosecute.

The 2001-03 royal commission into the building industry headed by Terry Cole led to no prosecutions and that will likely be the case with the Heydon RC if the aborted prosecution of John Lomax is any indication.

Howard used the recommendations from the Cole RC to establish the Australian Building and Construction Commission (ABCC) who were given draconian powers of interrogation and the power to jail people who refused to co-operate. The ABCC was abolished on 31 May 2012, and many of its functions were taken on by a new independent, specialist agency called Fair Work Building & Construction.

Abbott, and now Turnbull, want to reintroduce the ABCC. Turnbull took up the theme in Question Time, linking the ABCC and industrial relations reform to ensuring the future prosperity of the Australian economy, though it sounded more like trying to keep the focus on unions and Bill Shorten for political reasons.

We have been told that the ABCC led to productivity gains and a boost to GDP with a lower CPI.  These assertions come from a report commissioned by the Howard government and produced by Econtech which has been totally discredited.

The following is the conclusion from a paper written by authors from the Department of Employment Relations, Griffith University and the Department of Employment, Economic Development and Innovation, Queensland State Government, about the Econtech report into the ABCC.

“The exercise by an Australian state agency of coercive powers against construction industry workers has been justified by reference to claimed gains in productivity and hence national welfare. We have examined the data behind the productivity claims and found that they were erroneous, probably due to incorrect transcription, and that the source data indicated no relative productivity gains. The boost to GDP, savings to the CPI and national welfare gains in each of the Econtech reports, estimated as they were ‘from the recent closing of the cost gap between commercial building and domestic housing’, had no basis as there was no ‘closing of the cost gap’. Despite being made aware of this, the ABCC and its consultant, Econtech, stuck to the original claims about the size of productivity and welfare gains from the use of coercive powers. The errors (‘anomalies’) in the 2007 report might be dismissed as an ‘honest mistake’, but can the later insistence on not revising findings be so easily dismissed? Claimed productivity gains from the use of coercive powers are also not discernible in official ABS or Productivity Commission data. The critiques of Toner (2003) and Mitchell (2007) stand. The literature suggests that the unionised building and construction industry would benefit from more cooperative union-management relations. The role of the ABCC has been to penalise cooperative relations, and so it might come as no surprise that previous policy makers’ productivity expectations have not been met. However, there is some evidence that there has been a shift of income shares in the industry from labour to capital, with coercive powers reducing strikes and labour’s bargaining power.

We also draw attention to weaknesses in public debate over these issues. Little critical thought was given in the media to the Econtech reports on the building and construction industry, even though its similarly timed report on industrial relations reform policies was received with considerable scepticism. While some union officials in the industry have clearly harmed their own cause, the responsibility also lies with the media, with commentators and with policy makers to examine the evidence put before them and assess it on its merits. Attaching numbers to something does not make it true. The Econtech experience should be illustrative of a wider lesson for the media and commentators: to treat with extreme scepticism commissioned ‘modelling’ or like reports prepared by commercial consultancy firms for interest groups, especially when the findings advance that group’s political interests. There is good reason for the adage, ‘he who pays the piper, calls the tune’.

This close analysis of the data relied upon by the ABCC also raises serious questions about the nature of regulation in the building and construction industry. The alleged economic benefits have been used to justify the denial of basic rights to employees in the industry, rights which everybody else is, at least at present, entitled to enjoy. In short, there do not appear to be any significant economic benefits that warrant the loss of rights involved in coercive arrangements. A more cooperative, less punitive approach by policy makers to the industry would not only be consistent with better human rights, it might even be consistent with better productivity.”

Turnbull’s threat of a double dissolution should the Senate block the reintroduction of the ABCC is rubbish.  The Coalition is not ready to go to an election.  They have not presented a second term policy agenda and preselections have only recently opened in NSW.  His aim is to keep the spotlight on unions and Bill Shorten while Morrison tries to come up with a way to sell the increased GST and the abolition of penalty rates.

19 comments

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  1. Ian Sprocket Muncher Parfrey

    Thank you Kaye for yet another brilliantly observed and researched article.
    Having your insights and knowledge to hand, along with that of Rossleigh, John Lord and others, I can now delete The Guardian’s bookmark from my laptop.
    Keep up the stellar work and see if you could steal FDOTM from The Guardian. After all, that’s all that’s worth reading there now anyway.

  2. James Cook

    I am forever impressed by the insightful articles written by you, Kaye, and others on the aimn site. I use the information to argue the case against the LNP with my mates who get their “news” from TV or the mainstream rags. Fortunately, a few of my mates have visited your site and IA as a way of obtaining “real” news, and they are converted! I’ve no doubt others will follow [or have their opinions smashed by those of us in the know]. Please keep on…..at least until we get rid of this bunch of self-interested liars and rorters, or maybe until the MSM grows some balls and reports fairly and accurately.

  3. John Kelly

    A great piece of work Kaye.

  4. richard grant

    Excellent article. It is a pity MSM don’t write with such insightfulness.

  5. Kaye Lee

    To be fair, much of the information in this article came from the MSM. Notably:

    http://www.abc.net.au/news/2016-02-03/barnes-the-abcc-weapon-of-mass-distraction/7135520

    http://www.theage.com.au/victoria/royal-commission-a-blunt-intrument-to-combat-corruption-20140214-32rap.html

    http://www.smh.com.au/national/a-reprieve-for-organised-crime-20090828-f2iq.html

    The reports denying productivity gains were what got me started. That and the threats to the Senators of a DD (read you might lose your job). I hate bullies so I thought I would help them along with some real info.

    http://www98.griffith.edu.au/dspace/bitstream/handle/10072/35623/65996_1.pdf?sequence=1

  6. Paul Murchie

    Kaye Lee ( :

    it’s well past time that this country moved beyond its backward, systemic penal-isation of the living : generalised force and coercion and punishment is just a short step from the Corporate Uhmerican Penal Slavery System where millions of people are incarcerated and “put to work” for less than the lowest paid workers in China. Australia’s Corporate Human Storage Industry currently incarcerates between 35 and 40 thousand People (mostly from Indigenous and other deliberately disadvantaged demographics) at a cost of $150,000 -$170,000 per Person PER YEAR ($5-6 BILLION of Tax-Payer Funds): under Econo-Sadists like the LNP, SLAVERY and NON-COMPLIANCE PUNISHMENTS are just around the corner … and FOR WHAT ? the depraved satisfaction of the Psycho-Sociopathic 10% ? PFFT …

    #TearUpTheTPP or it’s GAME OVER

  7. terry

    not too mention brandis old law firm , 80 mill not a bad windfall . hows Dutton , hype and scare ,fair dinkum is he human

  8. Kaye Lee

    I have been writing about the ABCC for a couple of years. This is from a previous article.

    In the leaders’ debate in August 2013, Tony Abbott, when promoting his role in creating the Australian Building and Construction Commission, said:

    “That led to the achievement of some $6 billion a year in productivity savings and in cost reductions to consumers in the commercial construction sector,” he told the Brisbane people’s forum.

    This claim has been labelled mostly false by Politifact.

    Abbott sourced the $6 billion figure from a 2010 report prepared by the Canberra consultancy Econtech for the Master Builders Association. Justice Murray Wilcox in 2009 described an Econtech report on construction industry productivity as “deeply flawed” and that it “ought to be totally disregarded.”

    http://theaimn.com/heads-up/

  9. Jimmy

    Wonderful article Kaye, I have witnessed a lot of this first hand being a building worker myself.
    But alas, it astounds me no end how many building workers there are who are convinced that they are far better off under an LNP govt.
    They also have a notion that these arsehole LNP dogs are doing the right thing by destroying building unions.
    It astounds me how they can think like that and if you don’t agree then you are a commie bastard.
    I put it down to LNP 1950’s / 60’s propaganda still alive and well.

  10. jim

    Good one and good one Paul tear up the TPP or its game over so I’d add drop the LNP or its game over.

  11. kerri

    Another brilliant article Kaye Lee.
    I am speechles but to say I will share this widely.

  12. Jennifer Meyer-Smith

    “In short, there do not appear to be any significant economic benefits that warrant the loss of rights involved in coercive arrangements. A more cooperative, less punitive approach by policy makers to the industry would not only be consistent with better human rights, it might even be consistent with better productivity.”

    If this is the way that presumably objective government and university experts assess the Econtech Report into the ABCC, then call Turnbull’s bluff and let him make a fool of himself and compromise his LNP Gov by calling a Double Dissolution now.

  13. Bronte ALLAN

    Again, another excellent & insightful article Kaye! Here in SA some 7 or so years ago, a member of the CFMEU was charged with some spurious “crime” by this ABCC mob! His “crime” was to try & call a meeting regarding several safety issues on the construction site he was working. The “case” dragged through the court system here for over a year or more, to eventually be dropped with no further charges to be alleged! This whole farce from this ABCC mob was beyond a joke, & yet this innocent worker faced an enormous fine &/or jail time just for wanting to discuss safety issues on his site! An absolute waste of space & time was this ABCC lynch mob, all “conveniently” created when howard & his lying lot of so-called politicians was in power. This man’s wife & children had to under go months of worry etc, all for nothing! How many more innocent workers have been lynched by this insiduous ABCC?

  14. Jennifer Meyer-Smith

    Such abuse of government regulatory power as in Bronte’s example of the ABCC is another level that needs to be scrutinised, condemned and penalised by a Fed ICAC.

    Fear of legal reprisals would act as a wonderful deterrent to such abuse of power by corrupt regulatory officials.

  15. Kyran

    An article on ABC, which I only saw this morning, caused me to reflect on your article.

    http://www.abc.net.au/news/2016-02-04/union-coles-workers-worse-off-fair-work-commission/7140654

    Whilst I am not oblivious to the power of the SDA in the Labor Party, and their corrupting influence on ALP policy, there seems to be some cause for concern on what this union has done to its members. Two individuals have taken the union and the company to the FWC.
    The ABCC provides for ‘Star Chamber’ legal principles, which, if applied outside the building industry, would see the SDA prosecuted (as it rightly should be). But it would exonerate Coles. It would exonerate Ernst & Young.
    There are rules of evidence for most legal processes, generally stated as ‘balance of probabilities’ (civil) and ‘beyond reasonable doubt’ (criminal). Howards attempt to return to the ‘Star Chamber’ model, which, as best as I can find is based on ‘terrorism, don’t ask, don’t tell, just trust us’, defies both. The hapless current PM, also a lawyer, does not seem to understand the difference between law and expediency. Thank you Ms Lee. Take care

  16. Florence nee Fedup

    Suspect it we reverted back to slavery, there might be improvement in profits to developers.

  17. Florence nee Fedup

    The ABCC was not eliminated by Gillard. Many of it’s powers were transferred to FWA at the time. Shorten later tighten up many regulations relating to unions after Abbott’s first RC involving Gillard that involved alleged slush funds,

    Labor is happy to address issues raised by Heydon. ABCC not needed.

    With all the revelations of criminal activities in financial advice, now insurance payout corruption, there is need for federal ICAC to deal with white collar and other corruption and criminal behviour.

  18. Jennifer Meyer-Smithj

    Yes FnF @5.26pm,

    will Labor push for a fully enforceable and indictable Fed ICAC?

  19. Pingback: Malcolm Turnbull Has Staked His Future On A Half-Baked Union Hatchet Job - New Matilda

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