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Monday, 18 March 2013
Page: 2428


Ms LEY (Farrer) (20:51): I welcome the opportunity to speak today in the debate on the Fair Work (Registered Organisations) Amendment (Towards Transparency) Bill 2013. Those listening to the broadcast this evening and to the contributions by the member for Greenway and the member for Throsby would have no idea what this bill was about. They would have listened to a nasty series of personal attacks. That is fair enough—people make personal attacks in this place, but the personal attacks do not relate to the substance of what we are discussing here tonight, which is quite moderate and sensible. If I can just try to capture the absolute essence of what the bill moved by the Leader of the Opposition really means, it is about amending the Fair Work (Registered Organisations) Act to improve the standards of governance for registered organisations and insert new higher penalties to act as a genuine deterrent to organisational malfeasance.

We on this side have mentioned malfeasance several times; I do not think those opposite have. Malfeasance means acting with malicious intent. What this bill seeks to do is address organisations who by their actions demonstrate that malicious intent, and it does so by way of three major initiatives: (1) to ensure that financial reports are lodged on time and in compliance with the relevant provisions of the act by clarifying the circumstances where a report is not compliant, and by increasing the penalties; (2) to deter malfeasance by creating new penalties for organisations, their officers and employees who do not act in good faith or who use their position to directly or indirectly create a financial gain for themselves; and (3) to deter noncompliance with court orders by creating new penalties for organisations who do not comply with the order of a court. Those three provisions are quite moderate, they are quite modest and anybody who is listening would probably think, 'Well, that probably happens anyway'—and it does. It happens under the Corporations Act. So this is unremarkable in that it seeks to bring registered organisations, and of course that includes unions, in line with the Corporations Act.

At the very heart of this motion is an attempt to ensure that the hundreds of thousands of members of trade unions and employer groups can rest safe in the knowledge that their hard-earned dollars are being spent in a manner that directly benefits them. These workers have the right to know exactly how their dollars are being spent. This bill will seek to ensure that organisations lodge their financial reports on time, and that those reports are compliant with the requirements of the act—just what we all do every year with our tax returns. Failure to do so will see increased penalties for noncompliance. The penalties for noncompliance are now about $6,000; under the Corporations Act they are above $200,000—and that actually makes you change your behaviour. A penalty of $6,000 does not do that. With appropriate financial disclosure mechanisms in place, including ensuring timely reporting by unions and employer organisations, members will have that assurance that those responsible for managing the union are doing so—and are under scrutiny.

This is about ensuring a level playing field. We want to be certain that union members and members of employer organisations know that the framework under which their union operates is rigorous, has integrity and does the right thing by them. They want to know that their money cannot be misappropriated to fund private school fees for the management's children or to buy a new sports car for the partner of the union official. Regrettably, there have been far too many instances where those controlling the purse strings have used the funds at their disposal with gay abandon. Examples that spring to mind include the purchase by the Electrical Trades Union of a $1.25 million property in Oyster Bay for one of their officials; the purchase of a family vehicle by an official with the Communications, Electrical and Plumbing Union; and the frequently cited blatant misuse of funds from the Health Services Union—funding escorts, the purchase of a warehouse for the son of an official, and inflated wages that could be deemed excessive by all accounts. This blatant and widespread rorting of funds gives proof as to why this action must be taken swiftly. Under this private member's bill, penalties will apply where a registered organisation, its officers or its employees do not act in good faith, or where a direct or indirect financial gain is derived to the detriment of the organisation.

We seek to provide union members with an assurance that their management will be subject to the same level of scrutiny as directors and boards of companies, instead of the current situation where union bosses are able to avert much of the oversight that applies to those running other organisations. By bringing the penalties for trade unions and employer groups in line with the penalty regime specified in the Corporations Act 2001, we are seeking to establish a more accountable, just system. In April last year, we announced the coalition's plan for better transparency and accountability of registered organisations in response to the report delivered by Fair Work Australia, which highlighted the misuse of union member funds, specifically citing the case of the Health Services Union in Victoria where there were clear, significant breaches with the misuse of funds for their union officials' gain. Members of the HSU Victorian branch were shocked—as they should have been—that the union officials they trusted to act in their best interests had abused this trust, financing their own lavish lifestyles while many of those they represented struggled on a minimum wage. The member for Greenway, in part of her hysterical contribution, talked about the O'Farrell government in New South Wales doing something terrible with industrial relations to train drivers and bus drivers. Well, I reckon the train drivers and bus drivers in New South Wales would like to know that the money that they put into their union every year is not misused by the organisers of that union.

The breaches that we have seen indicate there is a real need to improve the existing law and ensure that such misuse of funds cannot happen again. Our policy outlines our commitment to better align the rules for registered organisations and their officers with the laws that apply to companies and their directors. We recognise that many of these organisations have responsibility for tens of millions of dollars of assets. For example, the CFMEU Victoria has net assets of $42 million, with $7.3 million a year derived from their matured investments. The NSW branch of United Voice has net assets of $24½ million, with $9.8 million in membership fees each year.

This bill also seeks to enhance the standards of governance by raising the bar to one that would actually pass the public expectations test. We are standing up for union members, advocating on behalf of many low-paid workers, many of whom struggle to pay their union dues. Ironically, this Labor government seems entirely deaf to those concerned. If those opposite are truly serious about doing what is in the best interests of the hundreds of thousands of union members, then they really should heed our call to pass this legislation. We would ask the crossbenchers to very carefully consider the arguments that we make. But I suspect the focus of the government is on rewarding and protecting the union officials who ensure their preselections and who finance their campaigns, and in that case we can see the ALP rejecting our calls for greater transparency and serious deterrence measures for breaches of the law which would bring those measures in line with the measures in place for corporations. If this is the case—that those opposite will oppose this private member's bill—then it will once again prove that the ALP is condoning the widespread misuse of 70,000 HSU members' funds and ensuring that such practices may continue.

I make no overall criticism of unions or the union movement. I have been a member of three unions; I have been a member of the AWU in the shearing sheds, I have been a member of the air traffic controllers union when I was an air traffic controller, and I have been a member of the public service union when I was a public servant. In each case I paid my union dues and I looked to the union officials to manage my money wisely. I am not saying I always saw enormous results, particularly working in the shearing sheds, but I acknowledge the work the AWU did in the good old days in the formation of conditions in the shearing industry. I know what it is like to work at a shed with no power, no running water and no flushing toilets for three weeks, and I respect the union movement that improved those conditions. But my goodness, that is a long way from the union movement we are seeing today—a long, long way. There were some noble origins of the union movement in Australia. If you go bush you understand those origins. You see them, you see the good people, and you see the way the names of those good people have been dragged through the mud with the actions of the HSU.

The government has a chance to make some modest moves in the direction of ensuring that transparency and accountability—and they are the two key words. We are not talking about regulation, we are not talking about compliance, we are not talking about burdensome red tape; we are simply talking about saying, 'This group of organisations needs to come in line with the law as it stands for corporations in the honest management of its money.' I commend the bill to the House.