Regulation Impact Statement – Attorney-General’s Department
On 9 December 2020, the Australian Government introduced the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020 to, amongst other proposed reforms, allow extended term Greenfields agreements to be used in relation to the construction of major projects.
Greenfields agreements currently have a maximum nominal expiry date of four years, resulting in increased risk of industrial action and protracted bargaining during the construction of major projects. Failing to mitigate this risk and the potential for cost blow-outs and delays decreases business and investor confidence in Australian major projects. The Bill aims to address this problem by allowing employers and unions to make greenfields agreements covering work related to the construction of major projects that have a maximum nominal expiry date of up to eight years from the commencement of the agreement.
The Attorney-General’s Department prepared and certified a Regulation Impact Statement (RIS), which the Office of Best Practice Regulation (OBPR) assessed as good practice.
The RIS estimates the average annual regulatory savings associated with avoiding one round of bargaining for a mining company is $244,024 and for a construction company, $223,493.
The RIS also estimates that there is a minor regulatory burden on employers who may seek to obtain Major Projects Declarations for those projects expected to have expenditure of a capital nature of $250 million and up to $500 million. The burden for one business is expected to be $1,694.04.