New IR laws could hit construction jobs, add costs

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New IR laws could hit construction jobs, add costs

Labor’s IR legislation could make construction and infrastructure projects more expensive, and also cost jobs in the building and construction industry, according to Master Builders Australia (Master Builders).

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Labor’s IR legislation could make construction and infrastructure projects more expensive, and also cost jobs in the building and construction industry, according to Master Builders Australia (Master Builders).
 
Wilhelm Harnisch, Master Builders CEO, said a major area of concern is with greenfields agreements. He said one company recently found that making a greenfields agreement with one union rather than its rival saved $80 million on one project and $15 million on another.
 
‘Under the new rules, these sorts of cost savings would be far more difficult, and perhaps impossible, to achieve,’ he said.
 
Budgets under pressure
 
‘Since major infrastructure projects are often financed by governments, whose budgets are already under pressure from falling revenue and increasing demands arising from the global financial crisis, this is an issue that Parliament should take very seriously.’
 
In his appearance this week before the Senate Inquiry into the Fair Work Bill, Harnisch warned that certain clauses in the Bill had the potential to increase the level of industrial disputation and make it harder to reach agreements.
 
‘At a time of a global financial crisis, the last thing that industry needs are new rules that add to uncertainty and raise costs,’ he said.
 
Too favourable to unions
 
Harnisch stressed that the Bill had many good features that Master Builders supported, but that some of its provisions were too favourable to union interests and could lead to a revival of unwarranted union power.
 
'Agreement making tends to be faster and less contentious when there is minimal third party involvement,’ he said.
 
‘This point is especially important in the construction industry, which has an unusually turbulent history in which militancy, for the sake of it, has often been worn as a badge of honour.'
 
Bad old days
 
‘It would be a tragedy if anything in the Bill led us back to the bad old days of industrial lawlessness.’
 
Of particular concern to Master Builders are the provisions of the Bill that have the potential to provoke union demarcation disputes.
 
‘What many people forget,’ Harnisch said, ‘is that in the bad old days many of the costly disputes in the building and construction industry were not between the workers and employers at all, but between rival unions. This had a disastrous effect on productivity and ultimately cost building workers’ jobs.’
 
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