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Monday, 25 June 2012
Page: 7693

Mr FRYDENBERG (Kooyong) (16:28): I start with an explanation: the Fair Work (Registered Organisations) Amendment Bill 2012 before the House and the amendments we will move are not anti union. It is not about shackling unions to the extent that it would affect their ability to effectively represent their members. I fully acknowledge that from the Harvester award of 1907 to the election of the first female president of the ACTU in 1995, the union movement has had, and it continues to have, a significant impact on Australia's way of life. While we may disagree with the union movement on their methods and their aims, the Liberal Party from Menzies to Howard has always recognised the role unions play and the right they have to play that role. In the words of John Howard: 'We're anti-union control. We're anti-union domination. We're anti the unions having a monopoly role in the workplace, but,' 'We are not anti-union'. But this bill and the amendments the coalition seek are about lifting the standards of transparency and accountability of registered organisations, of which unions are one. It is about ensuring we do not have a repeat of the scandals of the Health Services Union, where 70,000 of the lowest paid, hardest working employees from the HSU had more than $500,000 of their money misused—misused on expensive dinners, misused on holidays, misused on escorts, misused on political campaigns and political staffers, misused to the point that this money will never be seen again.

Not to mention that HSU East made millions of dollars of expenditure without necessary controls or competition. The Temby report has detailed that over four years $2.4 million was spent on the HSU credit card without sufficient guidelines and documentation, and a whopping $17 million of contracts were entered into without a proper tender process. As documented by the shadow minister for employment and workplace relations, Senator Abetz, there was: $5 million to Access Focus for what is believed to be consultancies and memorabilia; $4.9 million over three years to United Edge believed to be for IT services; and $3.4 million to Communigraphix over four years, believed to be for the union journal. And the list goes on, with the concerning revelation that some of the companies benefitting from these contracts were linked to Michael Williamson, the former President of the Australian Labor Party,

This is why we are here. This is why the coalition is taking the initiative in putting forward these amendments, to ensure that registered organisations such as unions are submitted to the same level of accountability and transparency as companies and their directors are under the Corporations Act. Under the current law, trade unions as registered organisations are subject to obligations under the Fair Work (Registered Organisations) Act 2009. These include: not using their position for personal gain, ensuring the appropriate use of members' money and acting at all times in the best interests of the members.

But the penalties for the breach of these obligations are either minor and insufficient. Under section 287 and 288 of the Fair Work Act, civil penalties for using information to the detriment of the organisation or for personal advantage could involve fines of only up to $2,200 for an individual, and no criminal provisions apply. In contrast, under section 184 of the Corporations Act, criminal offences could lead to a fine of up to $200,000 for an individual or imprisonment for up to five years. These are serious penalties for serious crimes and this is what the coalition is seeking to achieve by moving these amendments.

What is more, the coalition believes we can no longer leave it to Fair Work Australia to police and enforce these obligations. The HSU scandal has shone a light on the deficiencies of Fair Work Australia. To take more than three years to investigate the allegations around Craig Thomson and then produce a document which is not even in the required format for the Director of Public Prosecutions is completely unacceptable. It is unacceptable to the coalition and unacceptable to the Australian people. The institutional go-slow and the incompetency displayed seriously undermined any possibility of an expeditious, effective and professional handling of the HSU matter.

What we need now is a new body, which the coalition proposes calling the Registered Organisations Commission, which will police and enforce these new compliance obligations rather than leaving it to the general manager. This new commission will take responsibility for educating members of registered organisations about their rights and acting as a repository of complaints from its members. The coalition understands that one has to separate Fair Work Australia from its day-to-day role solving disputes and making agreements, from its watchdog role ensuring proper accountability and transparency. In the words of Peter Anderson, the Australian Chamber of Commerce and Industry head:

We need to separate some of these roles so that the arbitral side, the decision making side that affects employers and affects industry is quite distinct from the traditional role that scrutinises unions and employers organisations.

How right he is.

The problem with the government's bill is that it does not go far enough. Do not take my word for it: Labor's member for Barton and the former Attorney-General in the Rudd government, Robert McClelland, said as much in his speech to the parliament last week. And if you do not want to take his word for it, read the speech of the National Secretary of the Health Services Union, Kathy Jackson, to the HR Nicholls Society just a few weeks ago, where she made a similar point, saying:

... I believe that there is a very strong case for extending, to the full extent possible and applicable, the same governance, investigation and enforcement provisions that apply to other corporations, generally those registered under the Corporations Act, to unions.

You see, the government's bill is a timid reaction to the loud public outrage and it is an inadequate response to the coalition's lead on the issue. Just look at the details. Under the government's bill the rules are still weak, the penalties are still weak and Fair Work Australia is still left to police these registered organisations, despite its failed record. Under the government's bill there is no real attempt to apply the standards of the Corporations Act to those of registered organisations. Under the government's bill there is no specific permission for Fair Work Australia to prepare a brief of evidence. Under the government's bill there is no requirement for Fair Work Australia to report to the parliament and explain why an investigation has taken longer than a year. Under the government's bill that ere is no specific provision making it clear that Fair Work Australia can cooperate with police at the start, during and at the end of the investigation. These are all deficiencies in the government's legislation which will be rectified by the coalition's amendments.

We have to understand that, despite the falling membership of unions, representing as they do only around 13 per cent of the private sector workforce and around 18 per cent of the overall workforce, unions are still big businesses. Unions are big businesses and their financials reflect as much. In an important report released by the Institute of Public Affairs, entitled Australian trade unions: an alternate regulatory approach, Olivia Graham and the irrepressible John Lloyd gave us a snapshot of some these financials. For example, in 2010 the CFMEU's construction and general branch in the Victorian division held net assets worth $42 million, including $4.5 million worth of investment properties and $25 million worth of property, plant and equipment. In 2011 the Victorian branch of the Australian Nursing Federation held $21,768 million in net assets and earned just over $6 million in net revenue. These are just some of the individual state based divisions. When one accumulates the net assets of the total union movement, it is easy to understand how unions can put together tens of millions of dollars every election for their brothers in the Labor Party. Given these large numbers, it is absolutely critical that the standards of financial transparency and accountability within the union movement are lifted.

In conclusion, we cannot afford to have another repeat of the HSU scandal. The Australian public will not stand for it, union members will not stand for it and the coalition will not stand for it. The coalition's amendments put before the House are a step forward They will enhance transparency, they will strengthen accountability and they will ensure that unions, which are big businesses, are subject to the same analysis, the same accountability, the same standards and the same transparency as are corporations and their directors. I recommend the amendments to the House.