While property industry and employer groups are warning that Labor’s promise to abolish the Australian Building and Construction Commission (ABCC) will lead to disaster in the building industry and militant unions running amok, the ABCC has been one of the least successful regulators in Australian history since it was restored in 2016.
According to the Coalition and property and construction groups, the ABCC was all about productivity. Under the original, Howard-era ABCC, it claimed productivity in the building industry improved. This was completely false — the biggest surge in construction industry productivity occurred after Labor gutted the ABCC the first time around. But the Coalition insisted that restoring the ABCC would lead to an improvement in productivity again. In fact the very name of the bill re-establishing the ABCC was the “Building and Construction Industry (Improving Productivity) Bill”.
The ABCC “is a vital economic reform that is needed to boost productivity in the construction sector”, the Property Council said when it was re-established. “The return of the ABCC will bring a material boost to productivity and do so very quickly.” And Coalition ministers parrotted the same lines when the bill was being passed after the 2016 election. The ABCC was “a fundamentally important reform … most particularly so that we can return productivity to a sector that is so tremendously important”, said one minister during a Senate debate. It continues now. The Australian is today thundering that dumping the ABCC will “sap productivity”.
So if productivity is the fundamental purpose of the ABCC, how has it performed?
For that we turn to the Productivity Commission (PC), which produces an annual productivity report. Luckily the PC has the perfect base — in 2017, as part of its Shifting The Dial productivity reform report (studiously ignored by the Morrison government), it found labour productivity between 2007-08 and 2015-16 in construction had seen annual 2.1% growth. And while some of that period covers the last years of the Howard-era ABCC, the bulk of it covers the “neutering” of the ABCC by Labor, its subsequent abolition by Labor, and the period up until 2016 when the Coalition couldn’t get the Senate numbers to restore it.
So now that we have a base, how has productivity performed since the return of the ABCC? The PC’s productivity reports tell the story: in 2017-18, construction sector labour productivity fell by 2.4%. OK, even if the PC claimed the ABCC would turn productivity around “very quickly”, surely the ABCC was still getting its feet under the desk — turning an industry round takes a while. So did things pick up in 2018-19? Labour productivity in construction that year was down, erm, 2.6%. In 2019-20, the last year before the pandemic set in, productivity also fell by 2.6%.
Under the ABCC, productivity in construction went into reverse.
What’s peculiar is that the ABCC made productivity worse even by the Coalition’s own standards: in 2014-15, labour productivity in construction only fell by 0.8%. In 2013-14, it fell by 1%. So the Coalition presided over worsening labour productivity in construction, but re-establishing the ABCC accelerated the decline significantly.
For a substantial lift in construction productivity, you have to go all the way back to Julia Gillard’s time — in 2011-12, labour productivity in construction rose 5.8%.
Based on what its proponents all agreed was the fundamental point of the ABCC, it’s been a spectacular failure. In fact it’s hard to think of a regulator anywhere that’s been a bigger failure, ever.
A thinly-veiled anti-union power grab turned out not to make things better? Shocked. I’m shocked.
The analysis of productivity is not really required. I am not sure why you put so much effort. Productivity was just the excuse, getting at the building unions was the reason.
And keeping wages down.
It’s like a permanent presence to suggest that unions are corrupt, unnecessary, unproductive etc., hence, creating social narratives and reinforcing the same anti-union sentiment for the 1%; part of the US radical right libertarians’ obsession.
Anyone who criticises unions, has yet to explain how the broader workforce gains any improvement in income and conditions without union representation (while passive members of the workforce are happy to take the benefits)?
Nations without (free/meaningful/grassroots) unions are generally autocratic…..
On the contrary, it’s important to refer to credible work that debunks the myth. Too many people still think union strength = cushy work conditions and low productivity.
This “productivity commissions” and the like fly under the radar of most Australians.
For someone who takes an interest in politics I find it disappointing that most Australians don’t even know these types of “commissions” exist. They do not realise just how much money has been spent on various boards, commissions, etc that governments appointment. All with generally very well paid jobs for their friends.
Multi-purpose.
Jobs for their mates and the opportunity to wield the stick to the unions. And like you say Mike, this is only one of many. I suggest establishing a commission to abolish the likes of these taxpayer-funded lurks, that commission would improve productivity.
The productivity commissioners are expert economist boffins, with backgrounds like state and federal treasury, academia, or modelling (eg Access Economics). They have job descriptions and their work reports to parliament.
The government can get away with appointing mates for AAT or diplomatic/trade postings, but not here.
And Michaela Cash has just stated that they intend reinstating it should they (ever) get back in. What a bunch!
The bigger question at the next Federal Election will be whether Her or the Coalition are re-instated or relegated – again.
I had almost forgotten that gnashing demon…did not need to see her opinion on anything or hear her horrid diction.
Unlike the higher primates or corvids, tories never learn from experience.
When I saw the image on the news last night, I thought the ABC had inadvertantly interposed a horror show. What a relief it has been to see little of the liars, ghouls and grave-robbers of the coalition since the election !
It seems the ghastly cohort will never learn – apparently they’re completely incapable of understanding the reasons the electorate flogged them.
Different subject, but what were the ad company thinking of in hiring Julie Bishop as a spruiker ?
It’s in the same class as anyone giving Howard a job.
Let me make it very clear. What ever she says, I will not listen to her, I’ll do a Peter Dutton and walk out or turn the other way.
I guess the real agenda for the ABCC was to provide a bunch of taxpayer funded jobs for mates who could then attack the unions with the full power of the government behind them. Productivity is just a word in the sales brochure.