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Wednesday, 16 October 2002
Page: 5330


Senator LUDWIG (6:05 PM) —I rise to speak on the Workplace Relations Amendment (Registration and Accountability of Organisations) Bill 2002 and the Workplace Relations Legislation Amendment (Registration and Accountability of Organisations) (Consequential Provisions) Bill 2002. A number of speakers in this important debate today have highlighted a number of issues. I wish to canvass some of those issues again, but perhaps from a different perspective instead of covering the same field. Before I do, it is fair to say that most people in this debate have spoken about their association with the union movement. I have been around the Australian Workers Union all my adult life in some form or other. I was around it even during my teenage years. It is a union I can speak about with some authority—


Senator Forshaw —It is a great union!


Senator LUDWIG —There is no doubt that it is a very great, Australian union. It has been regarded as an important union, both industrially and politically, in Queensland and throughout Australia. Having been employed by that union, I can say that the important thing about it is that it is able to say that it has one of the most democratic and accountable organisations not only in the industrial sphere, but also in the corporate world. It has been through a number of inquiries, even during my employment with it, and it has come out the other side squeaky-clean. The same cannot be said about the corporate world. Every time an inquiry is focused on the corporate world, the corporate world seems to run into extraordinary difficulty.

Earlier in his speech Senator Campbell mentioned one of those difficulties, which went to, as he called it, the bottom of the harbour. It was originally an inquiry into the painters and dockers, called the Royal Commission into the Activities of the Federated Ship Painters and Dockers Union, by Royal Commissioner Costigan. As Senator Campbell highlighted, that turned up activities of companies. I would like to refer to chapter 9 of a report done by the Australian Institute of Criminology, which I dug up on the way down to the chamber. It was headed Wayward governance: illegality and its control in the public sector.

It is worth while going back to some of this to understand that, when we talk about registered organisations and their accountability, unions stand apart from the corporate governance field. They have always been exemplary, as far as I can recollect, but it cannot be said that that has featured strongly in the corporate world. The paragraph that I want to share with the Senate reads:

The deliberate stripping of a company's assets so that it is unable to pay its debts is a time-honoured practice. It also happens to constitute a criminal fraud. During the 1970s in Australia, variations on this practice were employed by hundreds of more affluent members of the community to avoid paying taxes. This genre of tax evasion was to contribute a new term to the Australian lexicon: Bottom of the Harbour.

What they used to do was this: at the time, a company with no debts and with an annual profit of something like $100,000 would have a tax liability of $46,000. To avoid this liability the owner of the company had only to sell the company to a promoter for the value of the profits, less an agreed upon commission—for example, 10 per cent. Instead of finishing the year with $54,000, the former owner of the company would walk away with $90,000. That is the type of tax evasion that was going on back then. An inquiry into the union movement back then found just that: corporate mismanagement bordering on corporate fraud, I suspect. It was not minor but wholesale. Some 7,000 companies were involved, as I understand it, and some millions of dollars consequently disappeared.

This government has not learnt much from that. We have had daily reports on the HIH Royal Commission and every day in the papers we find reports of unusual practices by the corporate world bordering on, as I think we will find in the end, the unsavoury. It does not reflect positively on the corporate world at all. Today we have a response by the Treasurer which is quite thin. It is titled the Corporations Amendment (Repayment of Directors' Bonuses) Bill 2002 and is a bill to amend the Corporations Act. It was introduced today and there was a press release put out by the Treasurer about it. The explanatory memorandum assists us in understanding what it does, but the import of this bill is to amend the Corporations Act to permit liquidators to reclaim unreasonable payments made to directors by companies prior to liquidation. It does not seem to go much further than that. That seems to be the full import of the government's response to the corporate directors' bonuses issue. Perhaps it is the Treasurer's full answer to the corporate excesses that have been revealed in HIH and in other companies that have gone into liquidation in the last 12 months or so.

I would expect more than that. In fact, I would expect the government to indicate that they would support the private member's bill that was sponsored by Senator Conroy in this house, the Corporations Amendment (Improving Corporate Governance) Bill 2002 [No. 2]. I would expect the government to indicate that they would support bills that would assist in ensuring that there were better and improved standards of corporate governance and bills, such as the one Senator Conroy has introduced, that would also protect whistleblowers providing information about corporate malpractice in good faith to the industry regulator. I would expect support for legislation to improve the culture of honesty inside our corporations. I would also expect support to ensure that shareholders and the public have the right to know how much executives are paying themselves.

These are the issues that this government should be talking about. These are the matters that this government should be addressing rather than—and there is an example we can use—talking about the Cole royal commission in the industrial field. At the moment we already have a task force, which was announced by Mr Abbott, that is working away in Melbourne. Quite frankly, it seems that the task force is just trying to find something to talk about. It seems that all that task force was designed for was causing disputation in the Melbourne work force or thereabouts in the run-up to a possible election in Victoria. I cannot see any other reason for it. The information that Mr Abbott released, in sponsoring the task force, did not point to anything substantive that was going on. The Cole royal commission did not point to anything substantive that required a task force. But it so happened—and I am open to correction on this—it was an issue that Mr Abbott talked about one day and the royal commission announced the next day. I am happy to be corrected on that but it does seem a little strange and a little bit fortuitous for Mr Abbott that that followed his call.

We also know that there have been extraordinarily high fees paid to counsel assisting the Cole inquiry—and this was revealed in estimates. There were questions about how Mr Thatcher obtained his employment as secretary to the inquiry. There were also questions about how he managed to get a flat provided to him as part of the package. Then, of course, there were questions about the salary package for Justice Cole. Those questions did warrant scrutiny during estimates and they deserve responses from this government. I am sure they will be looked into again to ensure that there is some propriety by this government when it does call for royal commissions and that it calls for them properly, appropriately and when they are required.

We do not have an outcome that gives credit at all to this government when it starts inquiring into workplace relations issues. What it should be doing and what it could be doing is partly the reason we have been talking about this bill today. We are talking about genuine reform, looking at how we can improve, at least procedurally, matters that deal with industrial relations. This government has not been able to come to grips with substance, but I can say that it has, in part, been able to deal with process. That is why I think matters of corporate governance should weigh heavy. This government seems to be able to fill the breach when it talks about process, but when it talks about substance it falls considerably short.

The Workplace Relations Amendment (Registration and Accountability of Organisations) Bill 2002 is one of those bills where the work done by Mr Bevis, Mr McClelland and, I suspect, by the department rather than Mr Abbott has collectively provided a way of consolidating these amendments into the Workplace Relations Act and has provided improved registration and accountability of organisations. But it took process to achieve that. This government seems to fail significantly when it moves away from process and talks about substance. All this government can do then, as it has clearly demonstrated over the years, is stick to ideology. Its ideology seems to be, `Let's attack unions. Let's try to break down the workplace relations system. Let's try to junk it.'

When talking about some industrial relations issues—and I think I can talk about this with some knowledge—the system is a two-way street. In talking about the accountability of unions and their registration, they gave up their ability to act with any degree of freedom; it was swapped for the ability to be governed by, or be at least accountable under, the Workplace Relations Act. As such, it provided the outcome, which was an orderly system of industrial relations. This government needs to be reminded that that was the outcome. It was a bargain that was struck many years ago, at the turn of the century, when unions were capable of being registered and capable of submitting to an accountability regime. It was provided for in the 1904 federal act, which has followed through to this day.

Ostensibly, this bill consolidates a lot of those provisions and amends some of them in a technical way and provides a schedule to the Workplace Relations Act. It is worth pointing out that that was a trade-off which ensured that unions were accountable and the system of industrial relations would be orderly and provide benefits to both unions and their members and ultimately improve wages and conditions in the workplace. Bargaining would ensure improved productivity for employers as well.

The system we have now, which is predicated on an enterprise bargaining system, ensures that. This government fails to recognise that that bargain has continued; it was a good bargain and it has stood us in good stead. This government has continued to attack unions and attack the system of industrial relations because it does not like them. It seems it has sponsored the employers to do it. Employers have echoed this mantra that they do not want a third party involved in the bargain, and they claim that unions are a third party. Unions are an integral part of the bargain process—they always have been.

Employers have not lived up to their side of the bargain either. When you look at the corporate governance that they have effected in Australia, it is poor. The corporate governance of those companies is shocking, to say the least, when you compare it with the ability of unions to be held accountable, to be democratically controlled and to meet the expectation of their members.

A press release states that, in a speech given by Mr McClelland to the ACT Industrial Relations Society—a very good society—he pointed out that only 46 per cent of non-union agreements provided for employee consultation compared with 77 per cent of union agreements. We find that 20 per cent of non-union agreements provided for employee representation compared with 81 per cent of union agreements. In summary, he said:

In short, under the non-union agreements advocated by the Howard Government, employees are much less likely to be consulted about important decisions affecting a business.

At worst, lack of consultation through an effectively functioning collective bargaining system is a recipe for ongoing industrial strife.

The employers have not lived up to their side of the bargain. They have not sponsored consultative approach to industrial relations; they have left themselves open to a system of industrial strife rather than a system of industrial harmony.

I want to highlight a couple of matters in the bill. A number of these go to an issue that has been reflected in clause 147: `Model rules for conduct of elections'. And I suspect the Liberal Party in Queensland might like to pick that up as well to see if they can add a bit of corporate governance to their system of electing members to parliament—we await the results of one election to see who will be the next senator from Queensland. What I really wanted to talk about was that the issue of model rules themselves has been around the industrial traps as far back as I can remember. It was a matter that was raised by the certifying barrister in Queensland in relation to the rules of industrial organisations back in the early 1990s. I can say that it will be an improvement to the system if they get it right.

In Queensland, the model rules were proposed and, as I recall, they were was raised during the Hanger inquiry into industrial relations in about 1989. That is from memory, so I am open to correction on that. That matter fell by the wayside after a while, but it has been reinvigorated in the Queensland system. At least the model rules for the conduct of elections are much, it seems, in the same form. But the difference here seems to be that this provides for the issue of guidelines setting out model rules for the conduct of organisations' elections. If they can get this matter right and if they can turn their minds to ensuring that there are model rules available, then it is a shorthand way of ensuring that organisations can pick up those rules, have them in their rule book and ensure that they comply with the relevant legislation. That is a good idea and it seems that it was probably pinched from Queensland anyway, so I am not going to grant the benefit to the drafters of this legislation; it was one that they picked up.

It seems that Queensland might have promoted it first and that this federal government has followed suit. In support of this particular provision I can say that it has had a long history. It was considered in Queensland and I would certainly draw it to the Senate's attention as a good improvement to the system. It does allow the system to sometimes short-circuit the long process of coming up with rules and spending money on drafting rules, given that model rules have already been prepared. So I would recommend this particular clause, one that this government should at least do some more work on to ensure that it works. (Time expired)