The federal government's move to abolish a building industry watchdog will lead to an increase in unlawful industrial behaviour on construction sites, major industry groups say.
The federal government today won a narrow victory in the lower house with the passage of its bill to abolish the Australian Building and Construction Commission.
Labor won the vote 71-70 with the grudging support of the Australian Greens and key independents Bob Katter and Andrew Wilkie.
Labor plans to replace the ABCC with an industry inspectorate within Fair Work Australia.
The bill will now move to the Senate where it is expected to be supported by the Greens.
Master Builders Australia Chief Executive Officer Wilhelm Harnisch said the passing of the bill was regrettable when there was compelling evidence that unacceptable incidences of serious unlawful industrial behaviour remained.
"The industry and the economy has benefited from a strong cop on the beat but the parliament today has put that at risk."
Mr Harnisch said the building industry feared the vote would lead to an increase in unlawful industrial behaviour on building sites.
"The building unions have made much of being afforded the same rights, but what is now required is for them to accept that rights come with responsibilities," he said.
Chamber of Commerce and Industry of WA general manager advocacy David Harrison said business feared the abolition of the ABCC would encourage more union bad behaviour on building sites.
"Winding back the strong penalties and industrial laws will send the wrong signal to businesses looking to invest in Australia and will undo much of the gains made in stamping out unlawful industrial action."
Mr Harrison said without a strong watchdog in the construction industry there was a risk that costs of projects would rise and Australia would become a less competitive place to do business.
The federal coalition has said abolishing the ABCC would see a return to thuggish union behaviour and has vowed to restore it if elected.