Review of the Building and Construction Industry (Improving Productivity) Act 2016

The formal report on the independent review of the Building and Construction Industry (Improving Productivity) Act 2016 was tabled in Federal Parliament on Thursday 6 December, 2018.

The independent review, conducted by Rex Deighton-Smith of Jaguar Consulting, was commissioned by the Minister for Employment pursuant to section 119A of the Act which required that the Act be reviewed within 12 months after its commencement.

The review examined:

  • the performance by the ABCC of its “full service regulator” function;
  • the independent oversight of the ABCC’s compulsory examination powers
  • whether higher penalties are acting as a deterrent in preventing contraventions of designated building laws
  • whether the BCIIP Act should be amended
  • operation of new provisions including the Federal Safety Commissioner’s role

Full service regulator

The review assessed the performance of the ABCC as a full service regulator.

The activities of the ABCC since its establishment, together with the strategic priorities identified by the ABC Commissioner, are consistent with its full-service regulator function. p.3

Independent oversight of compulsory examination powers

The review highlighted the appropriateness of the existing safeguards of the use of the Agency’s examination powers. These include that:

  • examinations can only be undertaken after a notice is issued by the Administrative Appeals Tribunal on application by the ABC Commissioner;
  • witnesses have a right to legal representation of their choice;
  • the Commonwealth Ombudsman must report quarterly to Parliament on the ABCC’s powers, and:
  • the ABC Commissioner is required to report quarterly to the Minster on the ABCC’s performance of its functions, including the use of these powers.

… the safeguards and public accountability mechanisms incorporated in the current oversight arrangements in respect of the ABCC’s compulsory examination powers are adequate and appropriate. p.4

Higher penalties

The review explored whether higher penalties are acting as a deterrent.

… little evidence as to the deterrent effects of the increased penalties provided under the BCIIP Act is currently available. This largely reflects the fact that no penalties have been imposed under the BCIIP Act. Limited evidence of reductions in the number of days lost to industrial disputes and the number of proceedings initiated by the ABCC since the commencement of the BCIIP Act may suggest that some incentive effects have been felt. However, no confident conclusion can be drawn on this point. p.6

Need for amendments

The review examined whether there was any need for amendments to streamline and clarify the application of the BCIIP Act, particularly where if interacts with other Commonwealth legislation.

…the available evidence indicates that the provisions of subsection 34(2D) of the BCIIP Act and section 11F of the 2016 Code are likely to be inconsistent with several of Australia’s international trade obligations. p.7

…the reforms undertaken to visa arrangements for non-resident workers are likely to have addressed the concerns that led to the inclusion of these provisions in the BCIIP Act and 2016 Code, while the provisions of the Migration Act provide substantively similar market testing obligations without contravening Australia’s international trade obligations. p.7

Operation of new provisions in the Act and role of the Federal Safety Commissioner

The review examined the operations of the new provisions in the Act along with the provision requiring the National Safety Commissioner to audit Commonwealth-funded building work against the National Construction Code’s performance requirements in relation to building materials.

[Three recommendations were made in relation to the Federal Safety Commissioner. See full report for recommendations p.8]

Security of payments

The review also considered the ABCC’s role in relation to security of payments, which is a new provision under the Act.

There is relatively limited support among stakeholders for the role of the ABCC in relation to security of payment matters. However, the ABC Commissioner believes that the Security of Payments Working Group has, to date, worked effectively and achieved significant outcomes. p.10

It should be noted that the review was conducted prior to the launch in mid-July of the ABCC’s security of payments campaign.

Review conclusion

The review concluded that a cautious approach should be taken to the question of amending the BCIIP Act and 2016 Code stating:

… the review believes that a cautious approach should be taken to the question of amending the BCIIP Act and 2016 Code. Frequent legislative change has occurred in this field in recent years, with associated costs for industry participants in keeping up to date with their legislative obligations. Moreover, most submissions received from stakeholders expressed a desire for the current provisions to remain in force, at least in the medium term. p.66

Recommendations

A copy of the full report and recommendations can be found on the Department of Jobs and Small Business website.

A copy of the Australian Government’s response can be found on the Department of Jobs and Small Business website.