Magazine of Socialist Action in Australia

Victorian CFMEU: Tough times ahead

Reading Time: 8 minutes

Historically the construction industry has been a strong-hold for the Australian trade union movement. As far back as 1856 Melbourne stonemasons led the successful charge for an 8 hour day – the first time such a reform had been won by workers anywhere in the world.

Today the construction division of the Construction, Forestry, Mining and Energy Union (CFMEU) is arguably the strongest union in Australia, within which the Victorian branch is the jewel in the crown.

In Victoria, union flags fly proudly on the cranes of all the major commercial construction sites, an industry that is the fourth biggest in Australia making up about 7% of Gross Domestic Product and employing over 9% of the workforce. There is almost 100% union membership on these sites, with close to 30,000 CFMEU members in Victoria, an all-time record.

The Victorian branch is in a strong financial state. It has $46 million in net assets although $4.7 million of this is tied up in investment properties and $25.4 million is in property, plant and equipment. The union also has some influence over the $16 billion industry superannuation fund, CBUS.

More importantly, on every big job the union is represented by a fulltime delegate and sometimes also a fulltime union-appointed Occupational Health and Safety representative. This ‘officer corps’ layer of the union polices the industrial agreements and safety laws that exist in the industry.

The wages of building workers are high by world standards. A six-day week sees workers earn about $1500 after tax. This is topped up by payments into the superannuation fund, redundancy scheme, insurances and portable long service leave. In actual fact the union organisers are often paid less than the membership, which is rare in the union movement.

However, construction workers work up to 26.8% longer than the average for an Australian worker. They start at 6.30am and often work until 5.30pm Monday to Thursday, finishing a bit earlier on a Friday and Saturday.

Despite the safety laws (which were recently weakened by the Gillard government) and the presence of a militant union, the industry remains dangerous. 30 workers died in construction during 2010-11, making it the second most dangerous industry. This year’s figures show that working on roofs is the most dangerous job.

In a sense, there are elements of dual power on the better organised construction sites. The site delegates, backed by a fully unionised and industrially-aware membership, are often able to block acts by management that threaten the safety or industrial rights of workers. In some cases the union has a say about who gets hired and how the job operates.

The ability of union delegates and organisers to do their job has been curtailed however especially since the last Federal Coalition government established the Australian Building and Construction Commission (ABCC). Under Labor the ABCC has been rebranded but nevertheless the draconian measures remain.

Strike action is outlawed except during the 3-4 yearly wage negotiations. It still occurs on occasion but the possibility of massive fines stays the hand of the union. The bosses’ desire for unhindered production during the boom has covered over these structural problems for now, but they will become more exposed as the economy weakens.

Political militancy won this strength

The construction unions were historically a hotbed of working class and socialist politics. The Communist Party – especially the Maoist faction – were particularly strong in the old labourers’ union the Builders Labourers Federation (BLF).

Unlike today the BLF of the 60s and 70s was not just industrially militant but also took up broader class issues such as international solidarity, support for the urban environment, and anti-discrimination. For all their faults they were fighting for an alternative to capitalism.

In the mid-1980s the Federal ALP government deregistered (effectively banned) the BLF. This was at the behest of the bosses and outrageously supported by the Australian Council of Trade Unions (ACTU). After that the bulk of the BLF membership joined with the craft unions in the amalgamated CFMEU.

Working class politics has always been a feature of the life of the construction unions. Today, however, with the weakness of the militant left, politics for the CFMEU often consists of sending (usually very reluctant) members to ALP conferences in the forlorn hope of influencing the direction of that party in a pro-worker direction.

While the current leaders of the Victorian branch have fewer ties to the ALP, the union is still affiliated to the party and they are still influenced by the ALP’s political and economic ideas. What we really need is a return to the political militancy of the past which was rooted in socialist ideas and traditions.

Economic context

Despite this political weakness, the industrial strength of the union has allowed it to take advantage of the boom in commercial construction in Victoria. The population of Melbourne is rapidly moving from 3.5 million to 5 million and this means lots of new high rise apartments, new supermarkets, and general infrastructure. 32.5% of all national building approvals were in Victoria for the year ending October 2012.

The construction boom has been fuelled by finance from Chinese and East Asian capitalists and many new units are purchased by an Asian middle class for themselves or their children to use while studying in Australia. Foreign developers have purchased up to 30% of the entire Australian apartment market to date, with this figure higher in the major cities.

The Age recently reported that: “Real Estate agents CBRE estimate that Chinese and other Asian buyers account for 85% of recent large sales in and around the Melbourne CBD intended for predominately residential development… 8 Chinese banks now operate here… [with Australian investment waning] it’s a godsend, providing jobs for builders, planners, architects, engineers and real estate agents.”

The State Liberal government is encouraging new high-rise apartments for the Docklands, and a massive new Fishermans Bend project. A new suburb has been declared for Wyndham City in Melbourne’s south-west. Premier Ted Baillieu recently led a trade mission to China to entice even more investment into the sector.

This property boom is especially important to Victoria as the high dollar negatively impacts on other sectors like manufacturing and retail. Currently the Victorian economy is growing at a slower rate than every other mainland state, at only 1.7%.

Of course, as the Socialist Party has pointed out, this Chinese boom will not go on forever and there are already signs it is weakening. We have already seen ramifications here with activity in the construction industry having slowed for more than 30 straight months. Domestic construction has been the hardest hit but commercial activity has also declined.

While it may take some time for the full effects of the Chinese slowdown to impact on the construction sector it is an eventuality that the union should be preparing for now. Clearly the bosses are looking at this situation and they are preparing to reduce costs before the slump hits.

Construction bosses want to cut costs

There is strong competition amongst major builders for the contracts of the mainly Asian developers. These developers are used to the speed of construction in the likes of China where “maybe 20 towers will be built per project in three years” compared to how local builder Mirvac built 5 towers in 15 years at the Docklands, as one Chinese investor recently complained to the media.

On the one hand, the builders don’t want industrial battles with the CFMEU that will slow down production. On the other hand, they resent the financial cost of the higher wages and safer working conditions that a strong union delivers and would love to weaken the power of the CFMEU. Builders use the bosses’ industry groups to prod in this direction and encourage governments to assist in weakening the union.

The recent State Government 2013 plan “Securing Victoria’s Economy” complained that “in the decade to 2011, the price of non-dwelling building construction rose by 42%, engineering construction by 48% and new dwelling construction by 54%. These prices were up to double the average price rise experienced across Australian industry.”

It continued “Australian construction costs are higher than international benchmarks. Compared to the Canadian, German, UK, and American construction industries, Australia has some of the highest construction costs; in particular, for high-rise apartments, CBD offices, hospitals, schools and roads. Victoria is acutely affected by high construction costs. When compared to Sydney and Brisbane, Melbourne rates as the most expensive city for construction.”

The State government has therefore announced the introduction of a new building code and will only give contracts for government jobs to companies that adhere to strict anti-union guidelines.

The Grocon dispute that erupted last year should be seen in this context. This company is heavily indebted and this, combined with the cocky attitude of its owner Daniel Grollo, led to them taking on the CFMEU. Not surprisingly they aimed their fire on the right of the union to be represented on Grocon sites. Once this is lost, union influence is greatly diminished.

The Socialist Party rejects the criticism of those like Grocon who see the union appointment of delegates as somehow undemocratic. A building site is not like an office or factory. At the start of a job there are usually only a few workers on the site. A union delegate elected then would almost certainly be a company stooge and disenfranchise the bulk of workers who arrive later on the job. A delegate elected at the peak of a job, would mean no representation for the early months.

The bigger issue is that 90%-plus of workers are employed by sub-contractors whose foreman are present on the jobs. An open ballot would see them bullying and blacklisting their workers. The union needs to step into this chaos and represent the interests of its members. However, having said that, their needs to be tight rank and file control over the delegates. Their performance needs to be more strongly and scrutinised by all members so that we have militant, democratic delegates not time servers.

The Grocon dispute is still unresolved and over the course of 2013 it will become clearer as to who will come out on top. Grocon have a $10.5 million claim for damages against the union and it is entirely possible that more industrial action could ensue. Many companies are looking with interest as to how this battle will be resolved. If Grocon were to succeed it will lead to a flood of similar attacks from other construction bosses.

What’s next?

No union facing attacks from the bosses, however militant it is, can survive without the solidarity of the broader working class. At the same time the CFMEU needs to offer support to the likes of public sector workers who are facing cuts and sackings. Where-ever possible joint actions should be organised.

The best way for the CFMEU to win support is for it to fight around issues that affect the whole of the working class. The reason the BLF fought to defend things like parks and historic buildings, and for more public infrastructure, was because they had a vision for different type of society – a society where workers built things that were useful and led to a better standard of living for all.

For example, instead of an East-West private toll road linking the Eastern Freeway to the Western Ring Road, what Melbourne needs is a rapid expansion of railways. This will create at least as many jobs and will be better for the environment and in fact for the speed of movement by commuters.

A union push for policies such as a massive expansion of public housing and for more public schools and hospitals will generate huge support from ordinary people. Such a programme would obviously create thousands of jobs for workers and be a step towards building the types of infrastructure ordinary people need.

The limited union-influence over the massive CBUS superannuation scheme is a foot in door for a progressive union to show the logic of a nationalised finance sector to fund key projects. In turn, this requires the key industries to be nationalised under workers’ control and management so that a sustainable plan of production can be implemented.

Progressive policies are one thing, but who will implement them? What workers really need is a new mass left-wing party to represent their interests. Instead of handing over hundreds of thousands of dollars to the pro-capitalist ALP, the CFMEU needs to break with that party and work with others in the movement to create a party that represents the genuine interests of the working class. We believe such a party would gain a lot of support and put pro-worker policies at the centre stage of Australian politics.

Internally, the CFMEU needs to be prepared for a big fight with the construction bosses in the short to medium term. The rank and file and the delegate structures need to be prepped for such an eventuality.

Most importantly if the union is really going to be prepared for a changed economic situation and a boss’s offensive it will need to adopt a new and progressive approach. Industrial militancy without the politics to back it up is the equivalent of fighting with one arm tied behind your back.

The Socialist Party for its part will defend the union through thick and thin but argue that only a socialist outlook, policies and approach will ensure that the CFMEU is really ready for the big battles ahead.

By Stephen Jolly


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