A NEW Menzies Research Centre report has made the case for the ‘urgent reinstatement’ of the Australian Building and Construction Commission (ABCC), highlighting that excessive wages and disruptive working practices typically increase the cost of construction by 20 to 35 per cent.

In Constructing a Better Future: Restoring order and competition in the building industry, the Menzies Research Centre says anti-competitive behaviour is the biggest obstacle to increasing productivity in the sector.

“In the large-scale construction industry, anti-competitive behaviour thrives, particularly in its labour practices,” the report reads.

“Unconstrained union power is stifling competition by imposing pattern enterprise bargaining agreements across entire projects. These agreements lock in inflated wage costs unrelated to productivity.”

The report analysis the effectiveness of the ABCC and the cost of is abolishment.

“There is substantial evidence that the abolition of the Australian Building and Construction Commission was directly related to dwindling construction sector productivity and by extension, a diminution in economic growth,” the report reads.

“As a starting point, days lost to industrial action have increased by 34 per cent since the ABCC’s abolition. An Independent Economics Report observed that during the years the ABCC was active, labour productivity in the building and construction industry out-performed that of other industries by 21.1 per cent.”

The report says that reducing the cost of construction by an ‘eminently achievable’ 10 per cent – a saving achieved by the ABCC in its first incarnation – would save $5 billion on the federal government’s planned infrastructure spending.

Commenting after the report’s release, AREEA executive director of policy and public affairs, Scott Barklamb urged Senators to vote up legislation to reinstate the former powers of the ABCC.

“There is a crying need to bring industrial relations in this industry out of the Wild West and back into the legal fold,” Mr Barklamb said.

“The proven mechanism to break down this toxic culture, to stop the bullying, intimidation and illegal conduct, and to empower employers to stand up against pattern agreements, is to properly enforce our industrial relations laws through a dedicated and properly empowered enforcement agency.

“In coming sitting days, Senators will have an opportunity to bring back the ABCC, with coverage extended to offshore resource construction – an area of massive further potential for Australia.

“It is in the interests of all Australians, and our aspirations for a safe, healthy, smart and employed Australia, that they do so.”

Click here to view the Menzies Research Centre report.

For more information on AREEA’s advocacy activities supporting the reinstatement of the ABCC, including our upcoming submission on the Building & Construction Industry (Improving Productivity) Bill 2013, please contact AREEA executive director – policy and public affairs, Scott Barklamb on (03) 9614 4777 or at [email protected].