Stephen Cable: Crony unionism, coming soon to a tunnel near you

I had a shock recently when I read an article in the New York Times that wasn’t critical of Donald Trump. Not only was it on a subject other than Trump but it was a great piece of investigative journalism of the calibre that was once the mainstay of western journalism. The article was about the enormously extravagant cost of a new subway tunnel named the East Side Access project, which currently sits at $3.5 billion (USD) per track mile, compared to a global average of $500 million (USD) per track mile. A similar project currently underway in Paris for example, is being constructed for one sixth the cost. And this isn’t the only New York tunnel project that has overflowed its financial banks in recent years. Two other recent projects were also way over the global average.

The reason for the extraordinarily high cost is Crony Unionism. A problem as much to be feared by you and your tax burden as Crony Capitalism. To quote from the story:

“The Times found that a host of factors have contributed to the transit authority’s exorbitant costs.

For years, The Times found, public officials have stood by as a small group of politically connected labour unions, construction companies and consulting firms have amassed large profits.

Trade unions, which have closely aligned themselves with Gov. Andrew M. Cuomo and other politicians, have secured deals requiring underground construction work to be staffed by as many as four times more labourers than elsewhere in the world, documents show.

Construction companies, which have given millions of dollars in campaign donations in recent years, have increased their projected costs by up to 50 per cent when bidding for work from the M.T.A., contractors say.

Consulting firms, which have hired away scores of M.T.A. employees, have persuaded the authority to spend an unusual amount on design and management, statistics indicate.

Public officials, mired in bureaucracy, have not acted to curb the costs. The M.T.A. has not adopted best practices nor worked to increase competition in contracting, and it almost never punishes vendors for spending too much or taking too long, according to the inspector general reports.

This should be of interest to anyone in Queensland who is concerned about the state’s financial position and likes to see the public receive value for taxpayer’s dollars. The track record of Australian Governments generally in regards to these types of projects has not been stellar. Only last month the PM, who you’d think would have access to top notch advice, told us that the Snowy 2.0 project would now cost up to $4.5 billion rather than the original $2 billion stated just a few months earlier.

This is of great importance, because Labor has just won government for four more years and they are committed to the Cross River Rail project that will build 10.2 km’s of rail line (of which 5.9km’s is a twin tunnel under the Brisbane River and CBD) for a current budget of $5.4 billion. The similarities between New York and Queensland are scary for any half-awake taxpayer.

Both have a construction union exercising high levels of control over the government. Both have a very high value infrastructure project that will heavily involve the very same union in its construction. Both have unions donating very large amounts of money to the governments making decisions that benefit them. Also, there is a constrained pool of competitive tenders, and the methods of wage and conditions negotiations is opaque.

The notorious Construction, Forestry, Mining and Energy Union (CFMEU), which seems to spend as much time in courtrooms as it does on construction sites, is a massive financial supporter of the Palaszczuk Government.

No matter which company builds Cross River Rail, they will be dealing with the CFMEU and the CFMEU calls the shots in Queensland Labor. I predict that the costs for Cross River Rail will exceed current forecasts by at least 50 per cent and possibly double and that’s even with as many client costs as possible being hidden in a myriad of government departments (a famously useful trick used to hide government cost overruns).

According to reports from the Courier Mail, during the 2017 state election, the unions bankrolled the Labor campaign to the tune of $15k per day. All up, the unions handed Labor $1.49 million since 2015 and no one hands over that kind of money unless they expect a return on investment. On top of the direct funding, there is all the personal action unions can take to promote their cause through their own campaigning, none of which needs to be officially declared.

All of this is an astonishing amount of influence for organisations which only represent a fraction of the labour force. According to ABS statistics, only one in nine private sector workers are part of a union. In 1992, almost 40 per cent of workers belonged to a trade union, now it’s 15 per cent. Less than 10 per cent of construction workers actually belong to the CFMEU and would probably be less if they weren’t able to coerce membership, so it doesn’t even represent the industry as it claims.

In fact, the only union that actually seems to represents a significant portion of its members is the Public Sector Union at 39 per cent of the workforce, which is a huge concern as observed by Jordan J Ballor of the Acton Institute:

“This adds an additional layer of concern to the larger problem of crony unionism. We in effect get government employees using government funds to campaign for the expansion of government.”

The reason the public sector is more prone to unionism is because all you need to do is get your own candidates elected and then you can legislate whatever pay and conditions you like. The payback is enormous.

For the average Joe on the street there’s no value in union membership because in most industries you can’t capture your employer and force them to give you what you want. People aren’t buying because there’s no value in it and if unionised workers did provide better value for money to employers, they’d be hiring them hand over fist and workers would be scrambling to join unions at every turn. The factual evidence on the ground shows this is clearly not the case.

There is value in it however, if you can either control the employer (public sector unions, CFMEU, etc.) or the industry is a capital intensive, limited location operation such as ports or large construction sites. You don’t see much militant union stoppages in coffee shops (no picket line outside your local barista today?), supermarkets or house construction sites. This is because there are so many of them, the capital input is low and there are hundreds of alternatives if one isn’t available. A subway tunnel under a CBD is a different proposition altogether. When you see someone digging in the ground, millions of dollars have already been spent and by the time the structural components are in place, the capital expenditure is enormous. If you can shut that down as the CFMEU is able to do, you can cost the builder a fortune. Now put yourself in the place of the builder, knowing that the union demanding higher wages and conditions is also the organisation that controls the government, exactly how many options do you think you have?

It’s just easier to pay up the extortion money and live with the lawless environment.

You’ll be seeing a lot more of this is 2018 and beyond, especially if Bill Shorten becomes Prime Minister and the nation’s media doesn’t step up its game and start hammering Labor governments over this type of disgraceful behaviour. Our media really is an important lynchpin on this issue. If they don’t stop cozying up to Labor because they love their social policies, and do their job of exposing this taxpayer rort, we will continue our descent into banana republic territory.

The cost of construction projects will continue to rise, more funds will flow to unions that only represent themselves, donations will continue to flow to Labor and enable them to tighten their grip on power. The unions win and you pay.

As I wrote previously here, the Labor treasurer in the previous Parliament, Curtis Pitt, approved a doggy deal for his railway union mates and misled Parliament over it, and is now set to become the new Speaker. So much for a government of integrity.

We wait here in the sunshine state to see how many more clouds need to gather over our heads before the people will say ‘enough Crony Unionism!’

The smoke is there and we need to expose the fire.

Update:

For those who are interested in learning more about union funding, I highly recommend reading a report from the Institute of Public Affairs, Rivers of Gold: How the Trade Union Movement is Funded by Industry Super. In the report you will read that between 2013-14 and 2016-17, $18.5 million has flowed from industry superannuation funds, via directors fees to trade unions.

I also recommend reading a report from the Centre for Union Facts in the USA that tracks and documents the activities of unions. The report is particularly enlightening as it shows that Labour Unions have given $1.1 billion dollars to left wing causes between 2010 and 2016, without prior approval of members and almost always favour the Democratic Party. You will see parallels to the Australian situation as you read through.

Stephen writes at cablecritique.com and for Liberty Works in Brisbane.

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29 Responses to Stephen Cable: Crony unionism, coming soon to a tunnel near you

  1. Sydney Boy

    Labor has just won government for four more years and they are committed to the Cross River Rail project that will build 10.2 kms of rail line (of which 5.9km’s is a twin tunnel under the Brisbane River and CBD) for a current budget of $5.4 billion.

    And the same Labor government has essentially vetoed the loan of $1B to Adani to build 310km! of railway line.

  2. Bruce

    The term “Danegeld” springs to mind.

  3. woolfe

    Enjoy your rogering stupid Queenslanders.

    Why did the alternate alp not bring this up during the election?

  4. Roger

    Enjoy your rogering stupid Queenslanders.

    The shift to Labor government being the norm in QLD is not, as is often thought, a reaction to the Joh days, which are but a dim memory for most now, but the result of immigration from the southern states, Victoria in particular during the time of Kennett.

  5. JohnA

    woolfe #2610152, posted on January 15, 2018, at 11:36 am

    Enjoy your rogering stupid Queenslanders.

    Why did the alternate alp not bring this up during the election?

    I see a newly formed independent State – the PDR of Queen-stan.

    To your second question another arises: how much did the unions / CFMEU (BIRM) contribute to the coalition campaign, and in what form? Possibly “shut up because if you are elected, we will make your lives miserable.”?

  6. Nato

    Any labourer in today’s ‘gig economy’ can tell a union shop from the moment of entry. The labourer who is not a union member is as daft as the one who votes for the ALP. This is what we pay our dues for. It could just about be the poster child of rational self interest.

  7. Crossie

    Why did the alternate alp not bring this up during the election?

    Because they were too busy fighting Pauline Hanson’s mob. And why did they need to do that? Because they insulted their own voters who, funnily enough, left them in droves.

  8. The 2 billion, 4 year joke of Sydney’s light rail extension that nobody (except putrid Green parasites like Clover Fucking Moore) wanted is another example of the Union mafia extorting taxpayers money to fill their coffers and fund Labor.

    The existing line is currently closed FOR A WHOLE MONTH in Sydney’s busiest period to connect the new line – the kind of work you see done in 2 days in Hong Kong or Tokyo. You go past the place and there are 30 people milling about watching 2 people dig a hole and getting paid $50+ an hour to hold lollipops (the Union gets a % of that extortionate salary back in fees).

    FFS how retarded are the LNP? Why don’t they write contracts that forbid any donations from Unions to Labor for the life of a project? That way this utter waste of time and money would be finished in 4 months not years and for 200 mill not TWO FUCKING BILLION. Actually, it would never have made it off the drawing board and we might actually have got the sensible option which is to extend the railways under the bloody ground you utterly retarded half-wits. Instead now I hear they are planning to rip up half the rail network and replace it with light bloody rail which will make rancid Granny Green in Sydney Town Hall moist.

    The worst part is not one journo has even managed the most basic research to point out the utter waste of OUR money on this and every other dumbfuck Government project or asked where all the money has gone (hint: the Union-Labor corruptocracy).

    Read this article to make you really angry.

  9. Rohan

    Crossie
    #2610243, posted on January 15, 2018 at 12:51 pm
    Why did the alternate alp not bring this up during the election?

    Because they were too busy fighting Pauline Hanson’s mob. And why did they need to do that? Because they insulted their own voters who, funnily enough, left them in droves.

    Be that as it may, name one LNP state government or opposition that isn’t stacked with the most insipid, spineless, mouth breathers ever to call themselves conservatives.

    It’s like Kelly O’Dwyer is a Gremlin and someone turned a firehose on her.

  10. Mother Lode

    A similar project currently underway in Paris for example, is being constructed for one sixth the cost.

    Is the tunnel being built by a French company in South Australia?

  11. H B Bear

    Aka the Victoriastan model. Wanna buy a cheap desal plant?

  12. Rafe Champion

    Same story with the $15$BIL Big Dig in Boston.

    It was our obsession spanning three decades, the kitchen renovation that would never end, fodder for late-night television jokes. The Big Dig was no mere act of public works, never talked about in the way New Yorkers refer to the Lincoln Tunnel or the George Washington Bridge — infrastructure that cleanly does its job. Ours was the mega project of faulty epoxy, light fixtures dropping like pine needles, Ginsu guardrails, and sea water leaks. The boondoggle, good money after bad, the white elephant.

  13. Mr Rusty;

    You go past the place and there are 30 people milling about watching 2 people dig a hole and getting paid $50+ an hour to hold lollipops (the Union gets a % of that extortionate salary back in fees).

    Is there a public safetycam live streaming the site(s)?

  14. sfw

    Why do think the Andrews Vic Gov was so keen to cancel eastlink? I think the cfmeu had much to do with it.

  15. Is there a public safetycam live streaming the site(s)?

    Not that I’m aware of though funny you mention it as I thought about setting up a time-lapse cam somewhere on George Street last year to show that almost no work was being done and they had shutoff the entire street for over 2 years – with another 2 to go before the useless boondoggle is running.

    The thieving, mooching scum Unions are disrupting trains again today demanding a 6% rise every year for 4 years and the spineless fucking Libs will give it to them because they are spineless fucking Libs. Oh for a Thatcher who would just have the fuckers clubbed and run over by horses. NSW Transport must be the most overpaid underworked public service in the country and they’re demanding 6% a year more whilst most of the private sector last real payrise was about 4 Prime Ministers ago.

    People should be fucking hung for this shit.

  16. egg_

    And the same Labor government has essentially vetoed the loan of $1B to Adani to build 310km! of railway line.

    Shit scared of the Greens.

  17. Anita

    Some years ago I had a colleague who acquired his trade certificate as a plumber and worked in the USA for a number of years. He said that he was employed through a union owned company. He was instructed by his employer that when he went on call outs to fix leaking taps, toilets etc, he should repair the problem but also tell the house-owners that their plumbing system must be replaced soon as they were showing signs of breakdown/deterioration and may collapse within months. The frightened house-owners then engaged the same union owned companies to replace a perfectly good plumbing system at great cost. My colleague said he got paid well as there was constant work ripping off poor Americans.

  18. Anita

    At Mr Rusty
    #2610352, posted on January 15, 2018 at 3:07 pm
    “NSW Transport must be the most overpaid underworked public service in the country and they’re demanding 6% a year more whilst most of the private sector last real payrise was about 4 Prime Ministers ago.”

    That privilege goes to the ACTION Bus drivers in the ACT.

  19. nemkat

    Labor has just won government for four more years and they are committed to the Cross River Rail project that will build 10.2 km’s of rail line (of which 5.9km’s is a twin tunnel under the Brisbane River and CBD) for a current budget of $5.4 billion.

    The $5.4 Bil. is the cost of digging the tunnel- nothing else.
    The cost of the entire project will be at least $28 Bil.

  20. Rabz

    Are we feeling right royally rogered yet?

  21. egg_

    The $5.4 Bil. is the cost of digging the tunnel- nothing else.
    The cost of the entire project will be at least $28 Bil.

    Ho Lee Fuk!
    Sum Ting Wong!

  22. nemkat

    Ho Lee Fuk?
    Sum Ting Wong?

    Building tunnels for choochoo trains can be an expensive racket, SpongeBob.

  23. egg_

    The cost of the entire project will be at least $28 Bil.

  24. Geobear

    Stephen Cable should note that Melbourne is also set to repeat the Crony Unionism boondoggles of New York, Sydney, Brisbane …

    From the Victorian Gov web site :
    “The Andrews Labor Government’s signature infrastructure project, the Metro Tunnel, will benefit from the construction expertise of the largest and most expensive transport project in the United States.

    In a rare glimpse of New York City’s East Side Access project, Premier Daniel Andrews went around 45 metres below the streets of midtown Manhattan to inspect progress on the 9.65km tunnel connecting Grand Central Station to the Long Island Rail Road – the busiest commuter rail network in America.

    The entire East Side Access project includes 13 kilometres of tunnelling under the East River in New York and will reduce daily commute times by up to 40 minutes.

    The Premier was joined by Dr Michael Horodniceanu, President of the project arm of New York City’s Metropolitan Transport Authority, and the Co-ordinator General of Victoria’s Major Transport Program, Corey Hannett.

    The East Side Access project has encountered significant challenges; encountering 350 million year-old rock during the tunnelling.

    The underground tour was a unique opportunity to learn from the experiences of New York City and gain valuable insights for Victoria’s Metro Tunnel Project.

    The Premier also announced that Dr Horodniceanu has accepted an invitation to visit Victoria later this year, providing further advice and support ahead of major construction starting in 2018.”

    We will doubtless learn all about it!

  25. MACK

    “The Unions” is the answer to most questions in Victoria. For example, why is the government signing up for unfunded Melbourne infrastructure projects lasting a decade or more, when funding for repair of rural roads has continued to fall in real term for years? Why did the government start an overnight suburban rail service when there were no customers? Why does Victoria have such highly paid teachers and such poor educational outcomes? Why did the government try to merge the full-time Metropolitan Fire Brigade with the volunteer rural fire service? etc etc.

  26. Bruce

    Regarding the Brisbane giga-dollar tunnels:

    I hope someone actually looks at the geological maps of Brisbane before they spend too much more on “preliminaries”.

  27. bollux

    On a brighter note, if there can be, the ALP government in Queensland is only there for three years. The 4 year terms start when this term is over.

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