Workplace exemption lets unions make mugs of us all

The Australian, October 15, 2016:
One down, two to go. If the support of Pauline Hanson’s One Nation continues, before too long Malcolm Turnbull will be able to tick off three industrial relations reforms.
This week the Senate passed the respect for emergency ser¬vices volunteers bill, known as the “CFA legislation”. Soon, the Australian Building and Construction Commission and the registered organisations bills will come before the Senate.
Again, the support of One Nation will be required, but that may come at a price. From what I can gather, Hanson and her people don’t want to just rubber-stamp someone else’s laws all the time. The One Nation team seems keen on fixing Australia’s workplace relations problems. They are genuine in their motives, desire meaningful change that is fair to everyone, and will have their own ideas about how to achieve this. They may propose their own industrial relations reforms.
In any case, if the Prime Minister wants the ABCC and registered organisations bills passed, he may need to embrace their ideas and act on their suggestions.
One Nation senator Malcolm Roberts gave a speech this week, and he seems to understand the need to bring the Australian Competition & Consumer Commission into parts of the industrial relations arena.
Since our workplace relations system was set up, behaviour that ordinarily would attract prosecution has been allowed to occur simply because of a poorly worded exemption contained in the Competition and Consumer Act.
This exemption originally was intended to protect workers when engaged in collective bargaining. However, its poor wording has been exploited by entrepreneurial unions, which have built lucrative businesses around corralling employers into cartels. The revenue from this has replaced traditional revenue from union membership. As a result, some unions are so rich they don’t need members; they just need willing businesses as accomplices and for this exemption to stay in place so they can all become rich by ripping us off with complete immunity. The exemption needs to be amended and the regulator needs significant additional resources.
The ACCC needs an industrial relations division that is wealthy and armed to the teeth. It must break our cartels in construction, mining, offshore oil and gas.
It must hunt down and prosecute companies and unions that are engaging in anti-competitive behaviour. Reform of our economy and correction of our languishing productivity depend on it.
Last month Mick Buchan, secretary of the West Australian branch of the Construction Forestry Mining and Energy Union, sent a letter to all formwork, steel fixing and concrete business owners in Perth. The union invited companies to a meeting to sell them a proposition on a partnership deal that would make them more money. At the meeting, business owners were to hear about how the union could help them commercially through their acceptance of a union enterprise bargaining agreement.
The letter bemoans the “deregulation of the industry”, which means competitive conditions have “eroded the profitability of companies”, putting the sector in a “downward spiral of profitability.” It talks of “builders and subcontractors on the east coast” who have “higher profits and better productivity” because they are in partnership with the union via an “industry standard enterprise agreement”.
Perth builders, the letter says, can share in the money to be made too, as a union EBA will “ensure … companies with proper returns on their investments”. The letter boasts of such arrangements with Probuild, Brookfield Multiplex and Lend Lease — how wonderful for the shareholders of these companies; this alliance with the union must give them great comfort. Imagine owning shares in a company that has the CFMEU devising pathways to higher profits and better investment returns.
To me, this letter demonstrates how a union has moved beyond traditional employment matters to the attempted control of a market. With this meeting, the CFMEU is not doing what it should be doing: organising and representing workers. It is, instead, organising employers.
In Australia, the great myth is that unions represent workers, and fight employers on their behalf. The truth is that in our heavy industries, unions collaborate in secret at high levels, with employers, to agree on deals that benefit both parties. Workers are the unsuspecting mugs, joined up to unions by compulsion and forced to go along with the arrangements.
In the letter, the union pro¬poses a business arrangement and promises a “level playing field”. In other words, let’s all agree to fix our labour costs. If these businesses agree with the union to fix their labour costs, the result will be higher prices for the West Australian construction sector. If it weren’t for the blasted exemption, this letter and the meeting would not be standard industry practice.
Australia is known as the most expensive construction destination on the planet. If the poor wording in the exemption is corrected to reflect its original intention, the cost of our construction could drop by 30 per cent. Roberts seems to comprehend this. He has just written to the government asking for the ACCC to furnish a report on how the exemption may be best amended.