Victoria to impose new IR rules on state-funded projects

The Victorian Government says bidders for state-funded building projects will need to comply with a new code for the building industry, in a move interpreted by industrial relations lawyers as the state using its purchasing power to influence industrial conduct.

Premier Ted Baillieu says the rules will be modelled on those introduced by the former Howard government, and will apply to all building and construction work managed or funded by the state.

Raising the alarm on cost blowouts at the state’s multibillion-dollar desalination plant, Baillieu said salary hikes had “migrated to other projects” and risked pricing Victoria out of infrastructure.

Industrial relations lawyer Peter Vitale assumed the new rules would focus on breaking down the “no ticket, no start” mantra of construction unions and ensure the enterprise agreements between contractors working on the site and the relevant unions complied with certain conditions, which might include rights of entry for unionists.

“They may also say a bit about tendering processes and the avoidance of anomalies in the tendering process,” Vitale says.

“One of the issues I’m sure they’d be keen to address is the issue of collusive tendering, which it would be fair to say has been identified as a problem in the past.

“Another issue might be addressing the limitations on the use of contract work.”

Vitale says such a measure is the only thing the state can do, short of legislating a new state system, to try to influence the behaviour of people who provide goods and services to the Government.

“As the customer, they would see themselves as having some rights to dictate terms.

“Whether it’ll be effective or not, they’ll have to wait and see.”

The Australian Industry Group has welcomed the Baillieu Government’s news.