Labor hoses down claim of rise in building costs

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Labor hoses down claim of rise in building costs

Labor has denied there will be an increase in building costs if it wins the next election, as the Federal Government and employer groups launch another attack in the face of continuing bad polls for the Howard administration.

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Labor has denied there will be an increase in building costs if it wins the next election, as the Federal Government and employer groups launch another attack in the face of continuing bad polls for the Howard administration.

The Master Builders Association (MBA) said Labor's plan to abolish the Australian Building and Construction Commission (ABCC) will threaten the industry and increase costs.

It claims that some of its members are already factoring in higher construction costs for multi-million dollar projects and forecasting increased industrial action in the industry under a Rudd Government.

Labor will be tough on unions, says Gillard

However, ALP IR spokeswoman, Julia Gillard, there will be no increase in building costs under Labor because it would have 'tough industrial relations compliance'.

'We will have a specialist building division that is there to crack down on any unlawful conduct in the building industry,' she said. 'Our whole focus and aim will be to make sure projects are delivered on time and on budget.

'I met with the building industry yesterday and I said to them: let's have an open dialogue about what it is that is actually working and let's bring that forward.'

Costs will skyrocket, says MBA

However, the MBA in Western Australia said the ABCC has been the first institution to keep unlawful building practices under control, and Director Michael McLean said costs will skyrocket if the ABCC is dismantled.

'It's been a breath of fresh air, it's been everything the Cole [inquiry] recommended,' he said. 'Although it's early days, costs have certainly decreased on building sites and should the ABCC be abolished, we anticipate a 5% to 10% increase in building cost in the commercial sector alone.'

The Age newspaper reported Workplace Relations Minister Joe Hockey's office distributed press releases from two MBA State branches warning of more union power, strike action, lawlessness and massive cost blow-outs if the building commission were abolished.

Hockey warns of business risk

'If he [Rudd] continues to ignore those calls [not to abolish the ABCC], it will be factored into housing prices, it will be factored into business risk, it will have an impact on the economy and it will be bad for jobs,' Hockey said.

ACTU Secretary and Labor candidate, Greg Combet, said that although no one wanted to see the cost of construction rise, the government's industrial relations (IR) laws had gone too far.

Legitimate interests of employees

'There are extraordinary breaches of democratic rights that are represented in the government's building industry industrial relations laws,' Combet said. 'Those things have to go, but having said that, everyone wants to see (an) ... improving of position and profitable building industry.

'People just have to settle down and think: "Ok, well, what are the legitimate commercial interests of business here that need to be respected, but what also are the legitimate interests of the employees in having decent industrial relations laws".'

'Risk of Rudd'

However, NSW Business Chamber said the emergence of 'Risk of Rudd' premiums in the building industry was only the start of cost and confusion for businesses if WorkChoices is repealed.

'Employers can see the iceberg coming', said Kevin MacDonald, Chamber CEO.

'The discovery that companies in the building industry are putting in 'risk of Rudd' premiums is not surprising. The concern and confusion created by the partial release of Labor's workplace relations policy will eventually impact employment growth in the months preceding a Federal election.'

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