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.