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Tuesday, 3 December 2013
Page: 1381


Mr BUCHHOLZ (WrightGovernment Whip) (12:48): I rise to speak on the Fair Work (Registered Organisations) Amendment Bill 2013. This is a good day. In the 43rd Parliament I brought before the House a private member's motion circulated in my name to achieve this very thing. Unfortunately, I was unsuccessful in getting the then Labor government's support for the bill. So this is a good day.

I want to pick up on a couple of points made by the opening speaker. He indicated that this bill is a political witch-hunt designed to kill off unions. It is not. The sincerity of this bill goes to the very heart of trying to improve union governance. No-one in this nation would be able to put their hand on their heart and say without any doubt whatsoever that every union is 100 per cent squeaky clean. There is too much bad press surrounding unions. You only need to look at the membership of unions over the last 25 years or 30 years. It has been a downward trajectory. Are people refusing to join unions because they believe they are corrupt? No. I am not suggesting that. Are they choosing not to join unions because it is no longer mandatory? Possibly. Mostly I believe they are choosing not to because they do not perceive that they get a benefit from being part of that association. If people are members of unions, I am interested to know how many of those union memberships are voluntary and how many are compulsory.

This bill does not intend to be a witch-hunt to kill off unions. I took comfort from the fact that the opposition indicated that they have no tolerance for bad behaviour—but, unfortunately, it is present. The bad behaviour of some unions is intolerable. I join with the opposition in suggesting that it needs to be tidied up. This bill goes towards doing that. The restructure of the Fair Work registered organisations in this bill seeks to predominantly shift us away from having one rule for the union mates and another rule for the business sector. The opposition spoke about the recent number of changes being as high as they have ever been. That is a correct statement. The regulations that were rushed through last year are as high as they have ever been but still fall way short of the penalties we inflict on the corporate sector and business sector. No-one yet in this debate has been able to argue the reasons for having two grades of penalty. The same crime should do the same time. No-one from the Labor ranks or from the union ranks has been able to come to this place and demonstrate why there should be inequity between the treatment of a union boss who commits a crime and a member of a business who commits the same crime.

Those opposite spoke about not having long to work on this bill; they say it has been rammed through. I will give you a little bit of history: the complaints they make go back beyond the Corporations Act. They should have raised those complaints in 2012, before they rushed the bill through parliament. Labor says this bill is expedited; their bill, introduced by Bill Shorten, was referred to a Senate committee for just five days. When that bill came before the parliament last time the Senate had only five days with it. The Senate Education and Employment Legislation Committee, which reported last night, made a number of recommendations to tidy up this bill. It is Shorten's rush job that has led to the problem that MPs in this place are complaining about. It is a bit rich to be saying that we have rushed this through.

Many of the amendments in this bill were drafted in response to the recent Health Services Union scandal, which involved nearly $1 million of members' funds—that is an awful amount of money—by its former president and a former member of this House. Members of the HSU were left asking how that gross breach of trust could have happened; members of other unions were asking whether or not it could happen to their organisation. The coalition believes that this bill will provide certainty of high standards, first-class governance, a robust compliance regime and increased accountability. Increased accountability is not a new benchmark; it is the same accountability that we ask the corporate sector to abide by.

The bill also seeks to improve the oversight of registered organisations. The bill aims to establish a dedicated independent watchdog, known as the Registered Organisations Commission. The commission will monitor and regulate registered organisations and will have enhanced investigation and information-gathering powers from those that currently apply. The commission will have similar investigation and information-gathering powers to the Australian Securities and Investments Commission, which is a good thing. The commission will have the power to commence legal proceedings and refer possible criminal offences to the Director of Public Prosecutions and law enforcement agencies. This comes in response to the HSU debacle, with Fair Work Australia investigations into the HSU and legal proceedings taking far too long. They are still going. In addition, appropriate sanctions against efforts to hinder or mislead investigations are included in this bill to ensure that action on any complaint made about a registered organisation must comply with the requirements of the investigation.

Most importantly, the bill introduces financial and operational reporting disclosure requirements. Many organisations control financial assets worth millions of dollars and hold significant assets. They are effectively dealing with cash flows and investments similar to those of large businesses. The proposed financial and operational reporting requirements are aligned with those outlined in the Corporations Law to strengthen existing financial reporting disclosure and transparency obligations. It is entirely appropriate to expect a high standard of financial reporting from registered organisations, given the trust that members place in their unions and associated employees that funds diverted from membership fees will be used to represent members' interests rather than for alternative motives. It is clearly inconsistent with the community's expectations for such organisations to be able to operate at a lower standard than those that apply to corporations and other comparable bodies.

Under the proposed reporting and disclosure changes, registered organisations will need to disclose remuneration paid to their top five officers. That is a good thing. Officers will be required to disclose to all members their material and personal interests as well as any conflicts of interest. This measure is being put forward to prevent individuals from benefiting from their role in the organisation. Members deserve to know who is in control of their money and whether conflicts exist.

All of the proposed changes I have mentioned will have little or no effect if the penalties for wrongdoing are not high enough. I believe that, at the moment, they are not high enough. That is why we are looking to bring in some type of centralised penalty regime. Currently, registered organisations and their officers do not face the same consequences for wrongdoing as company directors do. For this reason, we propose significantly higher civil penalties and a range of criminal penalties for those registered organisations and officials who do the wrong thing. These penalties are in line with those facing companies and directors. Under the act, civil penalties apply to officers and employees of registered organisations who fail to exercise their powers or discharge their duties in good faith and for a proper purpose. Some organisations have expressed the opinion that these penalties are much too harsh and will deter employees from taking up official responsibilities. We disagree that it will be a disadvantage. The only people who will have anything to fear from taking up office will be those who break the law. There is no argument that the penalties will deter employees from taking up office. A rigorous structure and process will be in place for investigations and prosecutions of alleged wrongdoing. Officers who are operating within the law, which is the overwhelming majority of them, will have no reason to fear taking up official office. The overwhelming number of officers who are already doing the right thing should be comforted in knowing that unlawful behaviour will be dealt with, thus ensuring members' ongoing confidence in registered organisations. The coalition government believes that there should be no difference between the penalties levied against a company director who misuses shareholders funds and a registered organisation boss who misuses membership funds.

We heard from some speakers earlier that support from all this bill has come from a wide and varied range of sources. In 2012, prominent union boss Paul Howes, of the AWU, said:

I actually believe there is a higher responsibility for us as guardians of workers' money to protect that money and to act diligently and honestly ... The reality is I do not have any issue with increasing the level of requirements and penalties …

That was said around the time the HSU scandal was at its height. He was trying to bring some credibility to the union movement by saying that he did not have a problem with what the coalition was trying to bring about.

Kathy Jackson also made some comments around the same time, which were published in an article in the Australian Financial Review. She said:

Reform brought in by a Coalition government and resisted by many unionists actually served for the better governance of unions.

As I start to wind up, I go back to my opening comments, which are of the same ilk as Kathy Jackson’s comments. This legislation seeks to return confidence and credibility to the union movement. It is not a political witch­hunt designed to kill off unions—it is not. It is about trying to raise the bar and to return credibility to the union movement. For too long the union movement has been susceptible to criticism because the bar has been set too low.

I understand why members on the other side need to come to this place and defend the position that there must not be transparency, because a lot of their political career relies on an association with the union. To see this, one only needs to look at when I put up my private member’s motion and who spoke against it. There was the member for Throsby. Let us have a look at his dossier: National Secretary, Community and Public Sector Union. The member for Chifley spoke against it. He was the National President and Divisional Secretary, Communications Division, Communications, Electrical and Plumbing Union. Every single person who spoke against the introduction of my private member’s motion had some relationship to a union—every single one of them. So they come in here to do the union’s bidding. I suggest that through this process we will see more members come into this place who are reliant on the unions in some way or the other—but if only they could see the good that we are trying to achieve through this bill! The good of this bill is about trying to return transparency, honesty and integrity, because there is a place on the Australian landscape for the union movement.

Long should the union movement prosper here in Australia, but it should do it within the same confines as those we ask of our business sector. There should not be one rule for them and a different one for others. If someone conducts a crime or misappropriates millions of dollars of funds, the penalty for someone doing it in the corporate sector must be the same as someone in the union. Unions will flourish and prosper—that might a bridge too far for the introduction of this bill!—but it is a good bill. It does speak to the return of credibility to the union movement. I support this bill.