Government tender selection putting business ‘over a barrel’: ACCI

The Workplace Relations Legislation Amendment (Building Cooperative Workplaces No. 1) Bill 2026, introduced into parliament last week (3 June), will allow the government to discriminate against businesses that do not have union-endorsed employment arrangements, as the bill “drive[s] them into doing so”, the Australian Chamber of Commerce and Industry (ACCI) has said.

“The legislation not only allows the government to discriminate, it actively encourages discrimination to achieve the aim of more union agreements,” said David Alexander, chief of policy and advocacy at ACCI.

The chamber warned that under the legislation, businesses without a union enterprise bargaining agreement would be subject to discrimination or a grant assessment process, arguing that most of the government’s $105 billion procurement budget could be legally funnelled into “union-friendly arrangements”.

Currently, the commonwealth issues $15 billion to $25 billion in grants per year. The ACCI said a significant number of these grants went to employing businesses, and include assistance grants, business support programs, regional development funding, innovation or R&D grants, training and workforce grants, and transition or resilience packages.

“Businesses looking to receive government grants will now feel compelled to sign agreements with dodgy union bosses because doing otherwise will be counted against them,” Alexander said.

“This is an extraordinary attempt to rig the selection process for deciding government procurement contracts and Commonwealth grants.”

“The threat to withhold government contracts and grants from businesses that don’t make agreements with trade unions would transfer colossal power to union bosses.”

Up to 99 per cent of Australian employing businesses would be excluded from winning government contracts and grants under a “rigged selection process proposed by the federal government”, with about 982,500 out of approximately 994,000 total employing businesses in Australia not having enterprise bargaining agreements, ACCI said, which said that the legislation introduced “rigged selection processes [that] will put businesses over a barrel”.

Early last year, the federal government announced changes to procurement rules, giving local businesses with 50 per cent or more Australian ownership, local tax residency, and principal place of business when applying for government tenders.

Business NSW chief executive Daniel Hunter called these changes a welcome step in addressing the struggles international businesses face, ensuring that SMEs are part of the process in helping “level the playing field”.

Despite this, Alexander said introducing a “rigged selection process” would structurally favour union-friendly arrangements, which he called inefficient and commonly one-size-fits-all pattern agreements with inflexible conditions.

“Many businesses [that] choose not to deal with unions will be driven to do so out of a legitimate fear of losing contracts.

“This policy seeks to legitimise the worst practices of the CFMEU, including rampant procurement-rigging and massive project cost blowouts, [as] we’ve seen in Victoria and Queensland.”