Removing Union Greenfields Veto Vital To Infrastructure Delivery

23 August 2013

Master Builders Australia (Master Builders) calls on both major parties to commit to workplace reforms to help deliver community infrastructure at a lower cost.

Removing Union Greenfields Veto Vital To Infrastructure Deliver

Master Builders Australia (Master Builders) calls on both major parties to commit to workplace reforms to help deliver community infrastructure at a lower cost.

Master Builders Chief Executive Wilhelm Harnisch said the welcome campaign promises of new infrastructure projects by both Labor and the Coalition risk significant cost blowouts if not matched with workplace relations reforms.

“Australians want and deserve more and better infrastructure delivered cost effectively for taxpayers,” Master Builders Chief Executive Officer Wilhelm Harnisch said.

Under current workplace laws unions have unwarranted power in negotiating greenfields agreements because new projects cannot commence without the approval of at least one relevant union.

“Unions in effect have a right of veto,” Wilhelm Harnisch said.

“Use and abuse of this power drives up the cost of providing new infrastructure projects and contributes to delays in project delivery, they proceed at all,” he said.

“But so far at this election neither major party has provided a convincing solution for the great difficulty negotiating fair and reasonable enterprise agreements for pay and conditions at new (greenfield) projects,” Mr Harnisch said.

Former Productivity Commission boss Gary Banks (Bert Kelly Lecture, The Economic Society of Australia) highlighted the challenge of negotiating greenfields agreements in the context of “overblown union power” which acts against productivity.

The Prime Minister recently acknowledged that greenfields agreements are a problem but has dismissed the need for change to the workplace relations system to address it.

The Coalition has promised to fix the problem by requiring negotiations for new projects agreements to be completed within three months of them starting. If not they will be referred to the Fair Work Commission for arbitration with the Commission given powers to make and approve agreements providing they meet the current ‘better off overall test’.

“The Coalition policy will do little to change the unequal negotiating power of unions, and risks simply delaying the process by three months.” Mr Harnisch said.

A better solution is to permit greenfields agreements to proceed if it meets the ‘better off overall’ test even if a union has refused to approve it.

“Reforms to greenfield agreements negotiating requirements are important for the economy and the community by driving productivity and lowering costs of infrastructure projects,” Wilhelm Harnisch said. 

“These reforms are made more urgent in the context of repairing the structural deficit and the urgent need to increase Australia's productivity,” Mr Harnisch said. 

 Master Builders Australia, Level 1, 16 Bentham Street (PO Box 7170 YARRALUMLA  ACT  2600, 

ABN 68 137 130 182, Tel: 02 6202 8888, Fax 02 6202 8877, Email enquiries@masterbuilders.com.au

 

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