New laws that would mean companies that give workers "fair and reasonable" wages and conditions are prioritised in Commonwealth procurement have come under fire from the federal opposition and business groups.
The Coalition argues the changes to be enacted as part of the Albanese government's new workplace relations laws - which would favour contractors that can show they look after workers, such as by having an enterprise bargaining agreement - will make the system "uncompetitive."
"Procurement decisions should be based on value of the money for the taxpayer," opposition employment and industrial relations spokeswoman Jane Hume told reporters in Canberra on Wednesday, ahead of the legislation being debated in the parliament.
Senator Hume argued that prioritising companies with EBA for government tenders was "outrageous" and conflicted with freedom of association.
She accused the Albanese government of "imposing compulsory unionism on almost the entire workforce that wants to deal with the government."
"What this is going to do is essentially ensure that not just companies that are directly procuring or directly contracting with the Commonwealth have a union agreement, but their entire supply chain does," Senator Hume said.
"Freedom of association says that we should be allowed to be a unionised workforce or a not unionised workforce. You don't have to join a union."
The government bill was expected to be debated on Wednesday evening.
Almost 1 million employing businesses do not have union-endorsed agreements.
Australian Chamber of Commerce and Industry chief executive Andrew McKellar wrote to Industrial Relations Minister Amanda Rishworth, warning that the new law would embolden unions to "aggressively exploit procurement processes and mug the taxpayer."
"By handing more power to unions, this legislation is sowing the seeds of serious corruption at the Commonwealth level," Mr McKellar wrote.
"'Preferencing' businesses that have union agreements unavoidably penalises those businesses that don't," he said.
"This extraordinary measure would create a rigged selection process for deciding government contracts and Commonwealth grants."
He said the threat of losing access to government contracts and grants if businesses did not make agreements with unions "would shift enormous power to union bosses, who know they'll have businesses over a barrel," Mr McKellar wrote.
"Non-union businesses will be faced with an invidious choice - continue to operate without a union agreement and face the loss of contracts and grants, or plead for a deal with a union boss who knows they hold all the cards."
He said the legislation showed the government had failed to heed the lessons of the militant CFMEU's conduct, which was found by Geoffrey Watson SC's Rotting from the Top report to have added about $15 billion to the cost of Victorian state government contracts.
"This legislation now risks exposing the Commonwealth to this same outcome," Mr McKellar said.
Master Builders Australia chief executive Denita Wawn said the new laws were "deeply concerning as they enable the government to use procurement processes and public money to pressure businesses into entering into agreements with unions."
The peak body for the development industry pointed to the ACT's Secure Local Jobs Code as an example of how similar procurement rules at state and territory levels had been "taken advantage of by unions ... resulting in taxpayers getting less for their money."
"This model cannot be rolled out across all of Australia," Ms Wawn said.
Ms Rishworth said the new laws would allow Commonwealth government spending to "support secure jobs and fair working conditions by preferencing enterprise agreements negotiated in good faith and genuinely agreed, where appropriate to do so."
"Entreprise agreements are a transparent and effective way of delivering secure jobs and fair conditions for workers, as well as flexibility and productivity for employers," the minister said.
"Value for money and quality, timely delivery will remain front and centre of all government spending decisions."
The government plans to consult on a draft Secure Australian Jobs Code to guide the operation of the new rules after the legislation has passed.
