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Monday, 25 June 2012
Page: 7709


Mr SHORTEN (MaribyrnongMinister for Financial Services and Superannuation and Minister for Employment and Workplace Relations) (17:39): When I introduced this bill I confirmed that this government believes in a free and independent trade union movement. We believe in the advocacy of employer organisations on behalf of their members. We believe in the accountability of these registered organisations to their members.

I thank the representatives of employer organisations who, unlike those opposite, have seen fit to support our bill in its entirety. I thank the trade unions who have worked with the government as well to develop this legislation through the National Workplace Relations Consultative Council. Together we have achieved a rare feat in the workplace relations space—consensus. This consensus on the key elements of the bill was achieved without compromising the core principles underpinning the government's policy position. These principles are: respect for the role played by trade unions and employer organisations in our society and our workplace relations system; respect for the members who are entitled to expect that their interests remain the primary motivating factor for these organisations; and strong compliance with the rules of organisations as well as the Fair Work (Registered Organisations) Act for improved rule structures, better investigation powers and procedures with Fair Work Australia for a tripling of penalties for breaches.

I would also thank those members of this place who have spoken in favour of this bill, including those on the cross benches. Unlike others in this debate who have sought to smear and malign the trade union movement with innuendo and false charge, I have been and this government have been consistent in their approach to recent events involving compliance with the Fair Work (Registered Organisations) Act. We have consistently stated our view, but the Fair Work investigations must be allowed to conclude without political interference. Fair Work Australia is an institution independent of the executive. We do not resile from the fact that the reports by the delegate of the general manager of Fair Work Australia into the HSU Victoria No. 1 branch and the HSU national office contain serious and disturbing material, which we have said in fairness to the members should be tested in the courts. We have also made it clear that the members of trade unions and employer organisations are entitled to expect that their membership fees will be used for their benefit.

Whilst we were doing this, I have to report to the House that those opposite have tied themselves in knots repeatedly contradicting themselves in an identifying spectacle of politicking. They have on one hand accused the government of political interference with Fair Work Australia, but then on the other hand have called upon us to intervene. They have accused, at different times, Fair Work Australia of being part of a political conspiracy, of administrative incompetence and debacle, and of delaying the release of the report for political ends. But then, when they read the report, they praised it as thorough, respected and methodical, and relied upon the content as unquestionable fact even though it had not been subject to cross-examination. They fell over themselves raising pseudo quasi-legal arguments to criticise the actions of the general manager. They then refused to acknowledge the basic tenet of our legal system and our democracy that allegations of actions contrary to law can and should be tested and determined within our court system.

Let me quote to you examples uttered by none other than the Leader of the Opposition. On 31 January this year at the National Press Club the Leader of the Opposition said the following about Fair Work Australia's investigation:

I just make the point that as things stand, this looks like an institutional go-slow to help the government.

That was a convenient message at the end of January, but later after the report had been released on 23 May the Leader of the Opposition described the same investigation as:

… a very long and very thorough and very meticulous and, I think, highly professional investigation.

So, there you have it. On 31 January the report is 'an institutional go-slow' and on 23 May it is amazing stuff. It is a convenient message he takes whenever it suits him in order to undermine unions and the interests of working people.

We in the government, however, have remained consistent throughout; the coalition has not. It is as simple as that in this debate about reform of registered organisations laws. This is the difference between us and those opposite when it comes to workplace relations. We make things happen, we get things done and we act in the interests of those we represent. We do not do and say things for the sake of being negative to obtain power. Most importantly, we do not keep our industrial relations policies a secret. We do not encourage the Australian voters to play hide-and-seek with our industrial relations policies. Those opposite work on the basis that the public will never find out what the coalition think until the actual election is conducted and over, just like they did in 2004. We have seen this time and time again with the opposition. They will not debate workplace relations, the full panorama of all the issues which affect all the Australian people that go to work every day. Of course, the Australian people do deserve better.

On 26 April this year, I took the difficult decision to intervene in proceedings before the Federal Court to apply for the appointment of an administrator to the East Branch of the Health Services Union. That branch covers workers in the health services sector in New South Wales, Victoria and the ACT. In explaining that decision, I said:

“I am particularly concerned that the interests of HSU members across Victoria, New South Wales and the ACT are not being properly served by the current dysfunction within the HSU East Branch.”

“My intervention is to ensure the broader public interest in working Australians having effective and accountable union representation is not undermined.”

I also said at the time that the decision:

… was taken to provide for the HSU to function into the future …

meeting the expectations and in the interests of HSU members;

sustainably and in a proper and democratic way; and

in accordance with its statutory obligations, including those set out in the Fair Work (Registered Organisations) Act.

Eight weeks later, the process of fixing this part of the Health Services Union is well underway. The Federal Court has already determined that there is sufficient dysfunction within this part of the Health Services Union and appointed an interim administrator to the HSU East Branch and HSU East, the New South Wales registered union. I thank the Hon. Michael Moore for agreeing to act in the position of administrator.

On 8 May I gave a press conference in response to the release of the report by the delegate of the General Manager of Fair Work Australia into the Health Services Union national office. During that press conference I made it clear that:

… the other unfortunate consequence is that this process has cast some doubts about the transparency and accountability of the broader trade union movement.

I believe that the problems which are reported in parts of the Health Services Union are not representative of the actions of the broader Trade Union Movement. I believe what we see here is the action of a few individuals, not the Trade Union Movement.

The government therefore committed to:

… taking wide ranging action to improve Fair Work Australia’s investigative processes … to enhance the accountability and transparency of registered organisations … strengthen associated penalties … and … introduce legislation to implement any recommendations from the KPMG Review into Fair Work Australia’s investigative capacities, once this review is completed.

Three weeks later, we delivered on these commitments and introduced the bill into this place—a bill that will improve financial training, transparency and disclosure by officials of registered organisations and by registered organisations to their members; improve the way that investigations into breaches of registered organisations provisions are conducted by the General Manager of Fair Work Australia; and introduce a threefold increase in civil penalties of the Fair Work (Registered Organisations) Act.

Registered organisations play a fundamental role in Australia's workplace system. Registered organisations play a fundamental role in the Australian democracy. These are organisations created and registered for the purposes of representing Australian employers and employees. They have particular recognition under Australian workplace relations law by virtue of their representative status, and it is because of that registration that they have particular statutory obligations in relation to their operation, conduct and disclosure.

Registered organisations are not regulated by the Corporations Act, and this is appropriate. Some in this debate—those sitting opposite, by and large—have argued that Corporations Act regulation should be applied to registered organisations. Others have argued that penalties should be increased 100-fold. Again we see the politics of simplicity and negativity clouding the opposition. They should know that there are many similarities between the regulation of corporations and the regulation of registered organisations. Officers of organisations, like those of corporations, are subject to serious duties and obligations. For example, they must exercise care and diligence; they must act with good faith; and they must not improperly use their position for personal advantage. Further, the financial regulation of entities is similar. They are required to undertake regular reporting of their financial accounts. Auditors are required to sign off their books in accordance with accounting standards. They are subject to regulatory oversight, and the general powers of Fair Work Australia and ASIC are in fact similar. In addition, this bill uses corporations law concepts like related-party transactions.

But we must also recognise that registered organisations and corporations are different creatures, both in practice and in law. The aims of the two entities are different. Corporations are designed to generate wealth and protect the financial interests of their shareholders. Organisations are established to represent the rights of their members, whether employers or employees, at work amongst other things. There has been a false debate here that, unless all unions are regulated exactly like corporations, somehow anything else is insufficient. Yet there are many different types of entities in this country that are regulated by different regulatory regimes that are more appropriately suited to what they do and how they do it: charity organisations, not-for-profit organisations, partnerships and unincorporated associations, for example.

This bill will improve the financial accountability and transparency of registered organisations. It will increase penalties for breaches threefold in line with those in the Fair Work Act. It will make sure that officials of organisations receive appropriate financial training. It will require the remuneration of highly paid officers, related-party transactions and material personal interests to be disclosed to the members. It will fix deficiencies in the current legislation—which was in fact introduced by the Leader of the Opposition, who was the relevant minister at the time—not least by now allowing Fair Work Australia to share relevant information with state law enforcement and regulatory agencies where it is appropriate to do so. This was one of the things which those opposite were pointing to when criticising the conduct of the Fair Work investigations into the HSU, and with this bill we are actually remedying the errors in drafting made by the Leader of the Opposition when he was minister for industrial relations.

This is extremely important legislation, not entered into lightly, which should be supported by all members of this place. I should also add—when we talk about people who are supporting this—that, whilst the opposition appear to be choosing the path of negativity, the Australian Industry Group, the Australian Chamber of Commerce and Industry are both supporting this, as are the ACTU. In fact, some employer organisations have criticised us for going too far, such as the Master Plumbers Association. This bill has the support of the Business Council of Australia. So the stakeholders—the people who operate day to day—are unanimous in supporting us, yet those opposite still persist with their old-fashioned remedy of union baiting.

We want to make sure, on behalf of all those people in Australian society who are genuinely interested in the ongoing viability of registered organisations, that the registered organisations regulation operates in a way which ensures that organisations are accountable to their members. I commend this bill to the House.

The DEPUTY SPEAKER ( Mr KJ Thomson ): The original question was that this bill be now read a second time. To this the honourable member for Farrer has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The immediate question is that the amendment be agreed to.

Question negatived.

Original question agreed to.

Bill read a second time.