The Federal Government says it has secured an agreement with the Senate crossbench to toughen its building and construction laws.

It has negotiated a deal with independent senator Derryn Hinch that would reduce the transition period for the new building industry code from two years to nine months.

Companies with non-compliant enterprise bargaining deals will not be rewarded government contracts during the period.

Senator Hinch helped the Government pass the Australian Building and Construction Commission (ABCC) bill in November, but he has been criticised by some for delaying its implementation.

The Coalition made several deals to secure the vote of the Nick Xenophon team, including the reversal of a long-held policy to give Australian businesses an advantage in competing for taxpayer-funded projects.

South Australian Senator Nick Xenophon praised Senator Hinch for changing his mind on the construction bills.

“All credit to Derryn Hinch because he was presented with new facts, he spoke to people in the industry,” he said.

“As Keynes said ‘when the facts changed, I changed my mind’ and I think that’s what happened here and he deserves credit for that.”

Labor Senator Doug Cameron said he was surprised Senator Hinch had revisited the issue.

“According to some of the Liberals, he didn’t come out of that with great credit,” he said.

But Construction Forestry Mining Energy Union (CFMEU) boss Dave Noonan said the changes could complicate Government procurement.

“You’ve got to ask what the situation with the tender of Government work then looks like and whether those companies who are not blacklisted will be in a position to increase their tender prices through lack of competition,” Mr Noonan said.

“This may be a case of the Government shooting itself in the foot and if that’s right, this wouldn’t be a good public outcome.”

Greens MP Adam Bandt said Senator Hinch’s change of mind could cause chaos in the construction industry.

“The original ABCC legislation caused chaos in the building and construction industry and the latest move by Senator Hinch and Senator Xenophon is a recipe for this chaos to return,” he said.

“By removing the grace period before some of the worst parts of this legislation came into effect, agreements that had already been struck between companies and workers will now be up in the air.”

– ABC