Senate Education and Employment Legislation Committee, , 3:26:40 to 3:38:27
Examination of allegations involving "Future Form," including mafia-style intimidation and violence in the construction industry.
Topics: Workplace culture, Public safety
Speakers: Senator Tony Sheldon, Greg Manning, Sarah Godden
Good thanks, uh sorry, thanks very much, Chair. Um I think we probably have the amount of people I need for this question, but I'll be in your hands if we need somebody else. Um I just want to just go back to um the CFM CFMEU administrator and also obviously the importance of the um you know national um the NCIF National Construction uh Industry Um Forum and that code that's been built. And it sort of does reflect a little bit about the importance of governments doing procurement policy. Um there are numerous companies that can be used used as examples, but I but I have used this one before, and I think it's appropriate, and that is that last year the CFMU administrator interim report outlined uh shocking allegations of regards future form. Um I noted that it was that future form wasn't a number of um state and um and partially federally funded projects as well through supply chains. So you know there is a direct link on the monetary the money trail of responsibility. We also note that companies like multiplex also separately, whether it's not federal or state government money are running uh or also engaging uh future form um have been to my knowledge, at least up until a few months ago. Um but that company um in that administrator's report um and a number of subsequent um media um reports allegations of mafia-style intimidation, threats and violence designed to terrorise the union official into silence from the administrator. Um masked men turning up his family homespraying painting and vile abuse across the property while his wife and young children slept inside. His car and boat doused in petrol and set a light while he and his wife and his kids were asleep inside their home. Is relative being abused ambush in a car park by several men claimed to represent future form? These men told him that they knew where he worked, where his family was, and even that they were were at the dentist at the dentist at the very moment that they were confronting him. Would you imagine that we could all imagine how devastating that would be? Um that's sheer terror that you would feel, and even just repeating it, you know, um you know um brings you know some of the terrible um scenes that we've seen in the construction industry. Um the message, of course, from future form was simply to stop investigating that company and um New South Wales government subsequently has made a direct uh ministerial directoral order to not use them. Um made my comments before about future form. So tax taxpayers, and this goes to all a very important thing. One of the recurring complaints that I hear and um seen reports from that is that the workers that work for good companies are being undercut by contractors who willingly cut corners on wages conditions, job security. Sham contracting. Um these are big projects, these aren't you know, some fly by night um you know, small operators. These are big projects with big money, tens of millions and hundreds of millions of dollars involved. So how would the um With the discussions and the aim of the discussions of the NCIF, how's that supposed to tackle not only what we've seen previously from the construction union, but also more generally what happens in the construction industry, this sort of combating this sort of behaviour that future form illustrates.
Thank you, Senator. The potential commonwealth standards for the construction industry could establish clear minimum expectations for the industry in terms of addressing structural and systemic issues that may require government oversight regulation and enforcement. They could or would be designed to address existing gaps without duplicating existing arrangements. So the potential construction standards represent an opportunity for government to support the industry and the reform work that's being undertaken, largely through the national construction industry forum, but also otherwise. Both the draft charter, which is an industry-led uh voluntary framework that was intended to support industry participants to align decisions and behaviours with agreed expectations and demonstrate a commitment to acting in good faith. And the potential construction standards are intended to support improved productivity, lawfulness, sustainability, and worker outcomes. They're both consistent with the work of the National Construction Industry Forum as it's reflected in its blueprint, and in particular, some of the priority recommendations under that blueprint and particularly priority recommendation uh 3.1 uh which is about procurement frameworks and settings. Now they're not the only work that is underway in relation to uh priority recommendation 3.1. Um we're also working closely with the Department of Finance who's engaged the Australian Procurement and Construction Council to have they've been commissioned to also do work to support this recommendation. So there is a considerable body of work underway to tackle this problem, but it reflects the um the severity of the um of the concerns that you have outlined, Senator, that uh um shared by um a number, you know, quite a few members of the National Construction Industry Forum that the the blueprint sets out their sort of agreed pathway for addressing um challenges in the industry.
I might just go then to this. The the the ATO estimates they're losing um 1.4 billion dollars in unpaid taxes each year from dodgy companies who are ripping off taxpayers, and that's an effect on everyone as a community. You know, it affects our defence spending, it defends our education spending, and of course the list important list goes on. What one contractor told the AFR in this in an article on the 28th of February 24 that they were sick of what is happening to our industry, subcontractors undercut everyone on price and leverage the ATO to make a living. The Tier One builders turn a blind eye because it all comes down to price. The true cost of the city metro developments in this case, the new hospitals and the schools should factor in the unpaid taxes. You know, the taxpayer is being screwed. Um again part of the code is to look at these sorts of elements to make sure that it's still, you know, that's still running. I I would argue still running rife in the elements of the industry. Um of course, then we can go to a legal um you know phoenixing as well. Um there was you know, just in the 14th of March 25, you know, prime example of in the case of construction companies cityscapes. Um, three point eight billion dollar Burrswood Point Urban Housing, where the company is also 10 million dollars owed to the ATO written off at 10 cents in the dollar. And Bryce, the CFMEU member and construction workers said our family was destroyed by the Phoenix model on the collapse of GN construction, so I hope no worker ever goes through that again. You know, tax avoidance, phoenixing companies, not paying workers. Umfortunately is has been a uh too often program. And of course, as I mentioned the previous question, violence.
And I mean to add another dimension to that, it impacts this portfolio because we administer the Fair Entitlement Guarantees Program where people whose entitlements aren't paid can go and get them from government, then government seeks to recover them. Construction is as for a long time and remains one of the largest sectors in that, so it's another way it impacts the taxpayer. It the issue you touch on is an issue that the NCIF has been very focused on since its inception in the sense that in addition to that the race to the bottom on price, it also means that it impacts on the employment models in the industry, it stops people building careers through the industry, etcetera, and creates lots of disincentives. And that's why the chart of it, Ms. Goddamn referred to, it's sort of an important foundational bit of work because it sets out those shared goals and expectations of behaviour that the industry agrees, should see generally, but on individual projects, etc. And then there's a range of other um bits of work in the in the blueprint that Ms. Goddam spoke about that go to trying to overturn that impact of that um just competing on price and then getting into everything, everything from sharp to just outright illegal behaviour and and violence, for example. And so it's important for step, and then the standards are meant to complement that by saying, well, the NCIF is a tripartite body. One thing government can do is use its investment in construction to drive the types of behaviour it wants to see around uh secure secure work, diversity of workforce, um, safety and productivity. Um, and so that's why to go to some of those examples of views we touched on earlier in relation to Senator Sullivan's questions, things like should there be a fit and proper person test for certain contractors of a certain level on projects of a certain size, and so people who are either proven to be engaging in or there's substantial allegations that could be substantiated could be excluded potentially, and that's the type of work the government's got under consideration at the moment. As I said earlier, we're looking at all of those submissions and then giving advice to government um in relation to how it can use its purchasing power to be part of that industry drive for change.
Well, I mean I I've you know experiment so this this part leads to the same point. Um evidence can be drawn for lots of places. Um from the worker who's been ripped off is probably uh not a good not a bad starting point as well as companies that are being unfairly competed. My experience has been that good companies are reluctant to speak out. Um it's a club, fearful you know, of um repercussions from other contractors, um, let alone the nature of business. So you you it does go to this important question about you know putting those guidelines in place to try to give that opportunity there for people to speak out. And the union plays, and the administrator obviously plays, and their union plays an important role in giving whistleblower protections as well. Is that is that is it the whole industry's responsibility? And when I say industry, I mean union employers, yeah, government.
And that they were comments from memory that the administrator touched on in the media interview we're touching on today, but um, for example, um they want to ensure that um uh workers have access to the same terms and conditions regardless of who their employer is, but they can't control who their employer is, and and that it goes to broader issues around the culture of the industry and who is able to be involved in the industry. And the charter is very much meant to be, sorry, the charter, the NCIF is very much meant to be uh unions and employers coming together to represent the whole industry to try and look those standards and behaviours that that had been seen in the industry.
Mr.