Brendan O'Connor incorrect on Cole royal commission cost

Updated

As Prime Minister Tony Abbott prepared to announce the Royal Commission into Trade Union Governance and Corruption, the Opposition and union groups questioned the effectiveness and expense of an earlier inquiry.

In 2001, the Howard government established the Royal Commission into the Building and Construction Industry headed by Terence Cole QC.

Commissioner Cole's final report was tabled in parliament in March 2003, and found evidence of - among other things - widespread inappropriate payments, disregard of safety regulations, threatening conduct, under-payment of workers and tax evasion.

As speculation mounted about the scope of the new royal commission, Opposition spokesman for employment and workplace relations Brendan O'Connor referred to the cost of the building inquiry, set up when Mr Abbott was employment minister. "He [Mr Abbott] set up a royal commission. It cost $66 million of taxpayers' money...," Mr O'Connor said on ABC TV's Insiders program on February 9.

Later in the same interview he said: "It did cost in today's dollars $100 million."

The claim: Opposition workplace relations spokesman Brendan O'Connor says the 2001 Building and Construction Industry Royal Commission cost $66 million, equating to $100 million in today's dollars.

Opposition workplace relations spokesman Brendan O'Connor says the 2001 Building and Construction Industry Royal Commission cost $66 million, equating to $100 million in today's dollars. The verdict: There is no evidence to support Mr O'Connor's claim. The official cost of the royal commission was $58.61 million, which equates to just under $80 million in today's terms.

ABC Fact Check examines Mr O'Connor's claims about the cost of the 2001 building royal commission.

The cost of the building royal commission

According to the final report of the building royal commission, the inquiry was given a budget of $60 million, $35 million to be spent in the 2001-02 financial year and $25 million in 2002-03.

The commission spent $35.65 million in 2001-02 and $21.43 million from July 2002 to January 2003, a total of $57.08 million. The final report estimated that a further $1.53 million would be spent as of February 24, 2003 - the day the report was handed to the governor-general - bringing the total cost to $58.61 million.

The commission spent more than $21 million on legal and audit costs, around $8 million on information technology, over $4 million on rent and $3 million on travel expenses.

The $6 million mystery

Fact Check asked Mr O'Connor how he arrived at $66 million as the cost of the building royal commission, rather than the budget of $60 million, or the final reported cost of $58.61 million. Mr O'Connor provided no primary sources, but sent four newspaper articles from 2007 to 2010 referring to "the $66 million inquiry".

A review of newspaper archives by Fact Check produced an earlier article in The Australian Financial Review, dated September 8, 2005, which quoted the national secretary of the construction division of the Construction, Forestry, Mining and Energy Union, John Sutton, referring to "the $66 million Cole royal commission". Fact Check asked the union for the basis of the figure and has received no reply.

Fact Check also asked the Attorney-General's Department about the cost. The department referred to the $58.61 million published in the commission's final report and could not provide any evidence of additional costs after the report was published.

Commissioner Cole told Fact Check: "I have no idea where the figure of $66 million comes from, but certainly it did not come from me."

Taking inflation into account

Mr O'Connor said the building royal commission cost $100 million in today's dollars.

Using the Reserve Bank of Australia's inflation calculator, $35.65 million in June 2002 and $22.96 million in February 2003 combined is now worth $79.4 million.

The same calculation using the mysterious $66 million figure results in $89.2 million in today's dollars.

The verdict

There is no evidence to support Mr O'Connor's claim that the Building and Construction Industry Royal Commission cost $66 million.

Even if it did cost that amount, it would not equate to $100 million in today's dollars.

The official cost of the royal commission was $58.61 million, which equates to just under $80 million in today's terms.

Mr O'Connor is incorrect.

Sources

Topics: royal-commissions, law-crime-and-justice, federal-government, alp, government-and-politics, political-parties, australia

First posted