Govt attacked over scrapping of ABCC

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The federal opposition has lashed out at the government over the decision to scrap the country's construction watchdog, arguing building costs will go up as a result.

Legislation is set to be introduced later this year abolishing the Australian Building and Construction Commission, with its powers set to be reduced to the bare minimum.

Powers will then revert to the Fair Work Ombudsman and health and safety regulators.

Prime Minister Anthony Albanese said fair work laws would still be enforced in the sector despite the watchdog being abolished.

"If people commit a crime, actions should be taken by the appropriate authorities," he told parliament on Wednesday.

"Why should workers in one sector be treated differently from workers in another sector."

Opposition Leader Peter Dutton said the move to scrap the watchdog would drive up the cost of housing and construction costs, putting further pressure on households' cost of living.

Mr Dutton accused Labor of prioritising union bosses, while Mr Albanese said the watchdog represented a waste of taxpayer funds.

Skills Minister Brendan O'Connor said he had not spoken with any officials from the construction union about getting rid of the ABCC.

Should legislation to abolish the commission be unsuccessful, the government has indicated it would let the funding for the body lapse.

It comes as the current head of the watchdog Stephen McBurney said he was surprised by the speed of the government's moves to scrap the body.

"We were not consulted on the decision announced on Sunday, but we've been aware for some time of the government's intention to abolish our agency," he told ABC radio on Wednesday.

"I was surprised at the extent to which the code has been amended ... it's a decision for governments as to what the future of the code is and what powers, functions and duties they wish for us to perform."

The commission was set up in 2016 by the coalition to oversee the construction sector.

Mr McBurney said the ombudsman would need ongoing funding to carry out cases in the future, such as the ones currently overseen by the commission.

"I've got a legal budget of $5 million per year, I understand that that's what the government is currently considering," he said.

"We've got a considerable amount of work to do between now and October to ensure there is a seamless transition of function to the Fair Work Ombudsman."

Mr McBurney is set to retain his $450,000 salary while work continues on abolishing the body.

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