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2014-07-28

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NBN contracts to encourage direct employment

New contracts between NBN Co and its prime contractors will encourage greater direct employment according to media reports.

NBN Co CEO Bill Morrow has been quoted in The Australian (11 July) as saying that the contracts would contain a range of incentives and penalties designed to help achieve greater consistency and efficiency in the NBN construction process.

This will include measures designed to reduce reliance on sub-contractors and to ensure a stable supply of workers as the pace of the roll-out increases.

It is not clear just how this is to be achieved. But a new emphasis on having all FTTP prime contractors actually complete connections to each premises they pass (rather than leaving some in the too hard basket) may affect the make-up of their overall work forces. Having an end-to-end internal construction capability is likely to be the most efficient and cost-effective way of achieving this objective.

Of course, as the CWU has long argued, and as Morrow acknowledges, the other fundamental requirement to get the project moving is contract prices that appropriately reflect the cost of skilled labour.

“We have an obligation to build the NBN as quickly and cheaply as possible but we also know that if we don’t pay a fair price for them to be able to pay for good labour then this won’t be built,” Morrow told The Australian.

Exactly.  But Morrow and the federal government also need to recognise that the creation of that “good labour” involves training and supervision costs and that these need to be factored in to contract prices.

Meanwhile, the CWU obviously welcomes any step which will increase permanent employment on this project.

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