Unions Blamed For NBN Debacle
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Are Australian building unions to blame for the current National Broadband Network (NBN) construction debacle, and is Communications Minister Stephen Conroy, now caught between supporting his party and the unions vs. the best interests of all Australians?

According to Ken Phillips the executive director of Independent Contractors Australia, Australian unions and their demands of construction companies are to blame, for the cost blow out that saw the NBN Co reject 14 submissions for the building of the $36 Billion dollar fibre network in Australia.

Philips claims that the Unions today, are not the “blue collar thugs” of yesterday. “Today they employ strategic strategists who are milking construction companies, knowing full well that they have the backing of the current Labour Government”.

He says that CFMEU members, who want to take control of the NBN Co project in Australia, are earning high six figure sum salaries on projects and that construction companies would be “insane” if they tendered for the NBN and did not allow for a blowout in demands by unions.

He claims that all of the constructions companies bidding for the construction of the NBN, took into account the deal that the Victorian Trades Hall Council put together, in their multi-union desalination industrial relations agreement, for the building of a desalination plant in Victoria, that resulted in Leighton the parent company of Theiss earlier today, declaring a $282 Million loss on the desalination plant project which originally would have delivered Theiss a $298 Million dollar profit.  

The deal gave the radical CFMEU substantial control of the Victorian desalination site, restricts and controls the use of contractors, resulting in Theiss having to pay non-working union representatives to be on site.

The company was also forced to allow for huge new redundancy provisions and increases in pay rates by around a third compared to current construction rates. Philips claims that several of the clauses in the agreement that Theiss signed, allegedly breach the Fair Work Act.

Several construction companies that submitted to build the NBN have told SmartHouse, that if the NBN or the Government cannot reign in the demands of the Unions, that they should be allowed to bring in overseas labour similar to what was done for the building of the Snowy Mountain scheme 50 years ago.

Telecommunications consultant Paul Budde, believes that the demands of unions have played a role in blowing out the cost of NBN construction and that the NBN Co needs to address the issue.

 

“There are several issues facing the NBN, firstly NBN Co have to deal with the Unions, and if they are not successful it then falls back on the Government to take up the issue” said Budde who also believes that the NBN co will now be looking at their proposed rollout with a view to finding new ways to roll out the project going forward.  

Philips said that the current Industrial relations environment in Australia has resulted in a “minimisation” of the competitive environment that companies pitching for the NBN roll out were operating in, and that the construction companies, were restricted by union demands and the laws relating to industrial relations, which he claims has eliminated construction companies from being “flexible or entrepreneurial with the way that their workforce is configured” for the project.

He claimed that the failure of NBN Co to attract contractors that can build the network at even a reasonable cost and the financial troubles of Leighton’s Theiss unit in getting the Victorian desalination plant off the ground are just the tip of an industrial relations iceberg that will have a chilling effect on Australian productivity going forward.

The director of one of the companies that tendered for the NBN project said: “The unions know that the current Labour Government is not going to go against them, as a result and after seeing what happened in Victoria, with Theiss and their involvement with the desalination plant, which initially was being built for a State Labour Government, nearly all of the companies bidding for the NBN have allowed for major cost blow outs due to anticipation of similar union demands,” he said.

“We can build the NBN for the budgets that the NBN Co has projected, but the NBN Co or the Federal Government need to take the risk of any downturn due to union labour demands. With the roll out of the NBN we cannot condone agreements similar to what Thiess signed up to in Victoria. 

“If the Government seriously want this project built, we need to be able to bring in labour from overseas who will work to acceptable Industrial rates as Australian workers, but without all the other demands that the Australian unions are currently demanding,” he added.