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Thursday, 21 June 2012
Page: 7456


Mr HUSIC (ChifleyGovernment Whip) (11:42): I am tired of prejudice being dressed up as policy. I am tired of seeing those opposite suddenly discovering concern for the low paid in this country, suddenly discovering concern for the governance of the unions of this country and coming in here professing that concern and dressing it up in a way that masks what is really beneath what they have always sought to do and will always continue to do. When it comes to corporate Australia those opposite always rail against red tape, but when it comes to unions they are the first to step forward with a plethora of regulations and a maze of different hoops that need to be jumped through for those unions to operate. Clearly, what is being proposed through this amendment is nothing more than those opposite making life difficult for the operation of unions in this country.

I put it this way: those opposite never meaningfully engage with the union movement and they never meaningfully engage with its members. They are only there to ensure that they can extract political advantage for their own benefit against unions and those who are members of unions. Whenever they occupy this side of the House and there are big policy issues at stake, those opposite—and I know this for a fact—do not meaningfully engage with unions, do not work with them on the process of policy development, do not seek to accommodate alternative views and do nothing other than engage in tick-a-box consultation. So, when they come forward and propose what sounds like a plausible policy, you then need to contrast it with reality.

When those opposite argue that the easiest thing to do in this case in relation to legislation before the House is just to mirror corporations law or the Corporations Act and basically ensure that the penalties and approaches that are used in that law be mirrored entirely for registered organisations, it flies against common sense and reality. I explained the simple reason: look at any measure of the wealth of those corporations—I am not talking generally; I am talking about the funds at hand and the breadth of those organisations—or even at the pay differential between those who are either directors or senior managers in those corporations and the management committees of unions, made up of shop floor delegates who are probably hundreds of times less remunerated and who have less control over the shape, form and direction of an organisation than someone who is a director or senior manager directing some of the biggest firms in this country, whose operations may be based either here or internationally. This compares the types of provisions that govern those individuals—directors or senior managers—and looks at the pay differentials that exist there and the responsibilities they have, and seeks to have the penalties and regime that apply to them then apply to workplace delegates who sit on management committees of unions. This is totally disproportionate and is prejudice masked by policy. This is more about those opposite trying to make it difficult for anyone to even contemplate sitting on the management committee of a union or an organisation that seeks to represent working Australians.

Worse still, those opposite do that not only to make life difficult for those on management committees but also to cut their own nose off to spite their face, because, if they apply that to registered organisations, there would then be a requirement to ensure that those same provisions are complied with by industry associations. Industry associations find it difficult, given the nature of their members' businesses and operations, to find people to step up and sit on those boards of management. These are industry associations, not employee ones. So, with this registered organisations proposal put forward by those opposite, they would then seek to make it even more difficult to get those people to step forward and sit on management committees for industry associations as well. They seek to make a political point—'We'll just harmonise the corporations provisions that apply to directors and apply those to registered organisations'—not thinking that industry associations are also affected by what is being proposed.

No-one doubts for a moment the need to ensure accountability and transparency, and I have certainly said this publicly. Unions should welcome accountability and champion transparency in their operations, not just because—and I have said this elsewhere—this makes, for example, for a stronger bond between members and those people that run their organisations, because they have the confidence that those organisations are being run and operated correctly, but also simply because this is the right thing to do. In particular, as a former union official I was always conscious of the fact that people were giving membership fees from their own salaries and wages and rightly expected that the management of a union would be run properly, with due regard to fees being properly expended. Certainly no-one should dispute that, and my view has always been—I have certainly argued this in recent times—that unions should embrace this and effectively beat regulation by doing this themselves and lifting their own standards.

I certainly think that the proposals that are being put forward in the government's legislation go a long way on a number of fronts. I was particularly heartened to see, for instance, the provisions requiring a greater level of education on the responsibilities—including the financial responsibilities—of those people that sit on management committees of unions, because, as I indicated earlier, a lot of these people are drawn from the shop floor and have not necessarily had to engage in these types of issues previously, ranging from the way in which balance sheets and accounts should be read through to, for instance, the responsibilities of organisations to the people that they employ within unions. There are a whole range of different responsibilities required and I think it is good that we have in place that education process—even the orientation process that we members get when we are first elected to this place—so that we are able to walk people through those responsibilities and ensure that those responsibilities are adhered to by those that run unions and industry associations and that the management of those organisations actually lifts as a result of that.

I think these are good things that are contained in this legislation. I heard the member for Farrer suggest that, with the use of outside organisations for forensic accounting or other purposes, this is a move that would be bereft of accountability. In actual fact, I think that Fair Work Australia getting additional outside skills to infuse into the base of skills within Fair Work is a smart thing so that it can keep up to date with movements in broader industry and the broader economy the way other businesses and organisations are supposed to run, taking into account what may or may not be happening in the international space. Having those skills brought into Fair Work Australia and improving its operations is a good thing. Those opposite seek to pick the worst element of this and suggest that this will fail to improve accountability within Fair Work, as if the accountability mechanisms as they presently exist are not enough—for instance, having the head of Fair Work Australia appear before estimates committees to account for decisions made through that process. And that is just one off the top of my head. Not only that, they have to account for that in their own annual reporting, which is submitted to the parliament and is open for scrutiny for any of us here in the House of Representatives.

On top of that there are the improvements that are being proposed in here for registered organisations to ensure that they detail in their annual reports the types of financial issues that should be put squarely in an annual report to ensure that there is not a suggestion of a conflict of interest. These are good reforms put into this legislation. This is good work—for example, requiring remuneration and board fees to be disclosed to members, or that transactions with related parties, including family members, and transactions where an officer has a material personal interest be disclosed to members. Again, this is as a result of the legislation we are currently debating.

I have mentioned the financial accountability training and I also point to the other aspect of this legislation that I am particularly pleased to see: that organisations develop policies on financial accountability and management. A lot of organisations already have this but there would be others that might not. Again, it is worth bearing in mind that organisations such as unions vary in size. There are well-established organisations and unions—you might have the AMWU, the AWU or my former union, the CEPU—but there are other smaller organisations as well that do not have the membership base and the income that flows from that membership base and therefore the ability and the strength to engage outside assistance to help shape their policies and procedures. More often than not those smaller unions are fighting a daily battle to keep up with workload and to ensure that the representation they seek to provide is of a high quality. That is not an excuse but a reflection of reality. I think that this bill, in the way that it puts the onus on ensuring that these policies and procedures are in place, is a good thing and it will strengthen the operation of unions and industry associations.

As I said, these changes would apply at the federal level to federally registered trade unions and to federally registered employer organisations. By their breadth they are significant reforms. These have been done—and this is important to point out—in a very open way. The consultation itself has been conducted with industry associations and unions across the board. It has been done openly with peak employer bodies like the Business Council of Australia, ACCI—the Australian Chamber of Commerce and Industry—Master Builders Australia, Ai Group, the National Farmers Federation and the ACTU, all through the National Workplace Relations Consultative Council. This was a good approach, done openly and involving all groups; and again I make the point that those opposite cannot simply negotiate and consult one side of the equation and leave the others out. They cannot just talk to employers and fail to take into account employee concerns as well. We have tried to ensure that the breadth of consultation covers all views to try to balance those out. As the communique issued by the National Workplace Relations Consultative Council back on 25 May read:

… the changes proposed by the Minister will significantly improve the financial reporting framework, governance and accountability for registered organisations …

It is certainly good to see that this has been received well by those affected.

Finally, it is important to point out that as much as there have been movements to improve the operations of unions and industry associations by some of the measures I outlined earlier, where these are not observed or complied with the penalty regime is significantly increased. In fact, it is increased threefold for breaches of the Fair Work (Registered Organisations) Act by up to $6,600 for an individual for each contravention and $33,000 for organisations. It is certainly worth noting that when the member for Warringah was minister for industrial relations he saw fit to put penalties at only $2,200 and $11,000 respectively. So it is important to note that these penalties have been ramped up significantly.

We have also sought to ensure that these are done commensurate with the size of the organisations themselves. As I said earlier, there is no point in simply reaching for the types of penalties that are levied towards directors and senior managers of major corporations in this country, and just believing that it is appropriate to sheet those over to unions and industry associations, because the impact of that is significant and it is completely disproportionate to the size. I certainly commend this bill to the House and would have major problems supporting the amendments proposed by those opposite.