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Monday, 25 June 2012
Page: 7689

Mr HARTSUYKER (Cowper) (16:14): I welcome the opportunity to speak on the Fair Work (Registered Organisations) Amendment Bill 2012. It is telling that the announcement of this legislation came just 10 days after the Leader of the Opposition announced the coalition's better plan for accountability and transparency for registered organisations. The government incorrectly accuses the coalition of not presenting policy. Well, here we have an example of the government attempting to mimic coalition policy. But this legislation does not go far enough. It does not include the measures that the coalition believes are required for true accountability and transparency for registered organisations.

There are strict rules to ensure that companies and their directors act appropriately. The coalition believes that these same rules should apply to registered organisations and to their officers. Only then can members of registered organisations be assured that their money is being used prudently. While this bill increases the penalties for officers of registered organisations, it does not go far enough. I shall now spend some time outlining some of the differences between the reporting obligations of companies and registered organisations, as well as some of the differences between directors of companies and officers of registered organisations.

The obligations on company directors are enforced by a number of regulatory bodies including the Australian Securities and Investment Commission and, where applicable, the Australian Prudential Regulatory Authority, the Australian Stock Exchange and the Australian Competition and Consumer Commission. Australians are confident in the ability of these organisations to regulate companies and their directors. The obligations on registered organisations and their officers are enforced only by Fair Work Australia. I do not have enough time to compare all of the obligations upon company directors with all of the obligations upon officers of registered organisations; however, I will take the time to outline some of the significant variations.

Section 180 of the Corporations Act requires that a director of a corporation must exercise their powers and discharge their duties with a degree of care and diligence. There is a similar provision in section 285 of the Fair Work (Registered Organisations) Act. The penalty for a breach by a company director is up to $200,000, while the provisions for an officer of a registered organisation currently apply a penalty of $2,200. The amendments contained within this bill, if passed, will increase the penalty for officers of registered organisations to $6,600, which is still a small fraction of the penalty applied to a company director.

Section 181 of the Corporations Act compels directors to exercise their powers and discharge their duties in good faith, in the best interests of the corporation and for a proper purpose. This is reflected in the Fair Work (Registered Organisations) Act in section 286. Again, the penalty for a breach by a company director is up to $200,000, while the penalty for an officer of a registered organisation according to this bill will be $6,600.

Section 182 of the Corporations Act has the provision that a director or officer of a company must not improperly use their position to gain an advantage for themselves or someone else, or to cause detriment to the corporation, while section 287 of the Fair Work (Registered Organisations) Act contains a similar provision. The penalty for directors of companies is—you guessed it—$200,000, while the penalty as amended by this legislation for a registered organisation is a princely $6,600. A provision that a company director or an officer of a registered organisation must not use information received in their position to gain an advantage for themselves or someone else or to cause detriment to another is in both the Corporations Act at section 183, and the Fair Work (Registered Organisations) Act at section 288. But again, we see the penalty for directors is $200,000, and the penalty in this bill as amended in relation to officers of a registered organisation is $6,600.

I trust that members are seeing a pattern developing here that, even under the provisions that this bill introduces, the penalties for directors of companies remain vastly higher than the penalties that would be imposed on an officer of a registered organisation. This pattern continues, with section 184 of the Corporations Act providing a criminal offence for directors that are reckless or intentionally dishonest and fail to exercise their powers or discharge their duties in good faith in the best interests of the corporation or for proper purpose. There is no corresponding provision in the Fair Work (Registered Organisations) Act and this bill does not introduce any. Under this bill, there are still no provisions creating criminal offences for officials of registered organisations. We have listened intently to the soap opera that has prevailed with regard to the HSU and the member for Dobell, and I stand here in stunned amazement that there has not been greater motivation to impose tougher penalties in relation to registered organisations.

In introducing this bill, the minister said:

This represents a significant increase in penalties to reflect the seriousness with which this government, and registered organisations, take compliance with workplace relations law.

For once, I agree with the minister. It does reflect the seriousness with which the government takes the sorts of breaches that this legislation deals with—it does not take it very seriously at all! It is all for slapping members of registered organisations on the wrist, whilst it is quite happy to hang directors out to dry, or to take them to the gallows or to the guillotine. If you are a member of a registered organisation you can do the HSU thing and you can misappropriate funds and you know the penalties will be light. This legislation does very little to improve that. It is nothing more than a slightly harder slap on the wrist. If a former union boss took compliance with workplace regulation seriously, he would welcome the coalition amendments which have criminal provisions for officers that are recklessly or intentionally dishonest, and which increase civil penalties in line with those applicable to company directors.

Some might think that these disproportionate penalties are appropriate when considering the large packages that some executives are reported to earn; however, these penalties also apply to mum and dad directors who might have little left after paying their employees, not just to directors of listed companies. As recent media has reported, the officers of registered organisations can also be earning substantial incomes, often many multiples of the income of the members that pay their wages. Just as directors have a duty to act prudently for the benefit of shareholders, officers of registered organisations must act prudently in the interests of their members.

This legislation sends all the wrong signals. The penalties in this legislation are a token gesture implemented by a government that is being dragged kicking and screaming to the reform process. It is nothing more than a token gesture. This legislation sends the message loud and clear that the government is not serious about dealing with the sort of unscrupulous behaviour that Fair Work Australia found was taking place at the Health Services Union. Labor is saying that it is a minor matter to defraud members and to act in a way that is contrary to the interests of members. The member for Chifley has said that union officials get paid less than company directors so the penalties should be less. This argument is absolute nonsense. These organisations control vast amounts of funds. They control in many cases the future of the members that they represent. The employees of registered organisations have the ability to inflict widespread harm on those for whose money they are effectively the custodians. Penalties should reflect the potential magnitude of the damage caused by a union officer's illegal action, not the size of their salary. The bottom line is that the fabled 'majority of union officers' who do the right thing by their members have absolutely nothing to fear from the significantly increased penalties proposed by the coalition because, if they do the right thing, if they act in the interests of their members, they will not be paying a penalty.

There are a range of matters not addressed by this bill. The coalition is concerned that former union bosses are regulating the current union bosses. That is an interesting situation—a very cosy situation. This concern is not limited to just the coalition, as constituents have also expressed their concern about the ability of Fair Work Australia to regulate unions. This bill does not address this concern. The coalition's plan for better transparency and accountability of registered organisations would have a registered organisations commission take over the roles of ensuring registered organisations do the right thing by their members and being answerable to parliament. This would address the real concern about Fair Work Australia's ability to do this job.

We have recently seen that there is a certain amount of confusion about Fair Work Australia's ability to cooperate with police and other agencies. The bill, while expanding police cooperation powers, does not make it expressly clear that Fair Work Australia can cooperate with police. I would have thought that cooperation with police forces would be an absolutely binding obligation on Fair Work Australia, not something that requires clarification at this point in time. Given the track record of Fair Work Australia, it is important that it be absolutely clear that Fair Work Australia can cooperate with police. It is also important that Fair Work Australia be able to provide a brief of evidence to the DPP. Again, given the previous problems with this, it is important to give express powers to allow that to happen.

The coalition have been asking a number of questions. How can you take Labor seriously when the Minister for Climate Change and Energy Efficiency was the head of the ACTU and when the minister responsible for this bill, the Minister for Financial Services and Superannuation, sat on the ACTU when the member for Dobell also sat on the ACTU? A cosy little clique, indeed. How can you take Labor seriously when this happened right under Labor's nose while the member for Dobell was a member of parliament and Michael Williamson was the President of the Labor Party? How can you take Labor seriously on ensuring union bosses follow the rules when they have turned the Australian Building and Construction Commissioner into a toothless tiger? And how can you take Labor seriously when they still rely on the tainted vote of the member for Dobell?

This is a bill designed by a former union boss to regulate union bosses and it will be enforced by former union bosses. It is a weak bill that does not go far enough. Union members, many of whom are in low-paying positions, pay their dues every week in the hope that their union will represent their interests. They should not have to put up with union fat cats using their money for long lunches, outrageous salaries and purposes unrelated to union business. Only the coalition has a plan to properly regulate unions. I call on the government to take some real action to improve union accountability.

We have seen in relation to the HSU the most egregious waste of the funds of union members—union members who work hard and go without to contribute their union dues. These are not members being paid the sorts of salaries that union officials are getting paid. They are everyday hardworking Australians who have seen their money squandered and who have real concerns about the future of the union.

The Australian Labor Party and the union movement do not need a complex review or a detailed examination of why union membership is declining. They need look no further than the mirror to see why they have a problem. They have a problem because the unions of today have lost sight of the goal for which they were established, and that was to look after the interests of the members. When you look at this legislation that has come out of the Australian Labor Party, the puppet of the union membership, you can see that the union movement is not concerned about accountability and having an organisation that works in the best interests of the members. The union movement is interested in perpetuating the personal benefits it can bestow on itself, quite clearly. Otherwise, we would have good penalties and some real teeth in this legislation: it would put sufficient sanctions in place to ensure officials appointed to union positions, who have under their charge large amounts of union funds, act in the interests of the thousands of members right around the country. It would have penalties that would be a serious deterrent, not mere slaps on the wrist as in this legislation.

This bill encapsulates so much of what is wrong with the modern Labor Party: a failure to really deal with the union movement to ensure that it is acting in the best interests not only of the members themselves but of the Australian people generally. We need to have much stronger sanctions. The coalition in government will right this problem if our amendments are not passed in this place now. Upon coming to government we will ensure that union members are as accountable as company directors. We will ensure that legislation will be in place to give union members the assurance that their money is being spent wisely, which the Australian Labor Party is not giving them. No wonder Australian workers are deserting the Labor Party. They are deserting the Labor Party because they know that the Labor Party are looking after themselves, not looking after their interests.