Cole Commission ignores Health, Safety and 'Phoenixing'.

This was my contribution to the Senate's consideration of the APPROPRIATION BILL (NO 3)
and APPROPRIATION BILL (NO 4) on the 27 March 2003

In December last year, I gave adjournment speech to the Senate on the progress of the Royal Commission into the building and construction industry, the Cole Commission.  In that speech I outlined my concerns about the failure of the Commission to investigate all areas of the industry.  In particular to investigate the failure of employers in the industry to comply with occupational health and safety laws and regulations, and the prevalence of industry practices such as tax evasion and ‘phoenixing’.  This is the practice of liquidating one company which then resurfaces in a slightly different form, thereby avoiding tax liabilities and depriving workers of their legal entitlements, amongst other things.

Most particularly, I expressed my deep concern about the industrial relations agenda of the Howard Government, and in particular Workplace Relations Minister Tony Abbott, in establishing this royal commission. This agenda is one of explicit anti-unionism; my concern was that the royal commission was established not to investigate the industry, and thus respond to the claims of workers and unions involved of corruption within it, but as an exercise in union bashing.  The tabling of the report in Parliament and the statement made by Tony Abbott yesterday has confirmed all my concerns.

The report, after a year of investigations and, as Tony Abbott pointed out in his statement yesterday, conducted “171 public sitting days … Some 16 000 pages of transcript were taken from 765 witnesses.”[1]  Yet the report contains only two specific findings of breaches of health and safety by employers.  As a former occupational health and safety officer with the CFMEU and a former worker in the industry, I find this result astounding.  On average, one worker is killed each week on Australian constructions sites due to workplace accidents. 

I have encountered a multitude of cases in which workers have been injured and, in some cases, disabled as a result of accidents on construction sites.  A significant proportion of these accidents can be attributed to the failure of employers to meet OH&S standards, which are a legal requirement.  The CFMEU, in conjunction with other unions, has campaigned consistently and strongly on this issue, emphasising the prevalence of non-compliance and the severity of consequences for these failings for their members.  Yet the Cole Royal Commission did not produce a single statement demonstrating illegal or unsafe work practices in NSW.

Similarly, not a single witness statement was produced by the Cole Royal Commission alleging tax rorts in New South Wales, or regarding the practice of ‘phoenixing’. This despite the Australian Tax Office estimation that the building industry fails to declare up to 40% of its income, and warning of the prevalence of phoenixing.  These practices mean that government treasuries are starved of tax payments and workers entitlement payments withheld to maximise profits.  Workers of the industry suffer as a result of loss of pay and entitlements, as well as problems with workers compensation in the event of injury that arise through these practices. 

The CFMEU has worked over a number of years and throughout this commission process to bring these matters to the attention of government.  Yet despite the prevalence of these practices and the severity of their effect, as my Labor colleague Robert McClelland highlighted yesterday,

“incredibly, there is not a single specific finding of unlawful conduct relating to underpayment of workers’ entitlements … avoidance of tax, or sham sub-contracting or phoenix company restructuring in the industry.”[2]

The Royal Commission, despite the tremendous cost to the Australian taxpayer, has failed to address either of these areas of vital concern, among others.  These are the areas of the industry that matter to the workers within it, as it is they who are the victims of these endemic problems.  Yet their testimony has been virtually ignored - only 7 hours of hearing time was spent listening to workers of the industry, yet hearing time devoted to employers and their representatives was astoundingly over forty times that. 

As representatives of these workers, the unions involved and particularly the CFMEU sought to bring these matters to the attention of the investigation, yet these attempts were also rebuffed.  This is because this commission was never established to investigate the vast scope of genuine problems in the building and construction industry. It has, since inception, had an explicitly political agenda, as an investigation into the industry was turned unashamedly into a union-bashing exercise.

90% of public hearing time was dedicated to anti-union subjects. 81% was spent attacking my union, the CFMEU.  This is the union that has sought to represent workers within the building and construction industry, both to government and to the commission’s investigation, only to be ignored.

Minister Abbott has just tabled one of the most expensive political tools in Australian history.  He has tailored a necessary investigation into one of the most dangerous sectors of employment in the country to suit his own political ends.  This commission has failed to investigate some of the most crucial problems in the building and construction industry:  major problems areas that cost lives. 

The areas of health and safety compliance and tax avoidance within the industry impact heavily on workers in the industry and on Australian taxpayers.  Not only is he failing to address these fundamental issues, but his motivation is to crush one of the few protections available to workers and their families in this industry, the right to collective organisation through trade unions.  In the words of my colleague, Mr Robert McClelland, yesterday,

“… we will not see this report used by the Howard Government as a political tool to advance a divisive industrial relations agenda.”[3]

We will continue to fight for the rights of workers in this country, and for the level of government intervention needed to address these major problems within the building and construction industry.