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Thursday, 21 June 2012
Page: 7471


Mr FLETCHER (Bradfield) (12:48): I am very pleased to rise to speak on the Fair Work (Registered Organisations) Amendment Bill 2012. It is a matter of public record that we have seen extraordinary scandals, regrettably, in governance in the union movement in recent years. We have seen very disturbing reports of a culture in which corrupt union officials systematically rip off their low-paid members, extracting huge amounts of money for their personal benefit. The names Craig Thomson and Michael Williamson will remain infamous as people who have dealt with their members in a highly irresponsible and very disappointing fashion.

This culture in which union officials take advantage of low-paid and, in many cases, poorly educated members does not stop, regrettably, with the Health Services Union. We have seen plenty of other examples of this kind of conduct reported recently. For example, the Australian newspaper recently reported on a case involving the Meatworkers Union and its affiliated superannuation fund. Mr Wally Curran, an 80-year-old self-described communist, a strong man of the Meatworkers Union and also, until very recently, a trustee director of the Meat Industry Employees Superannuation Fund, is reported to have received payments associated with the fact that the superannuation fund invested $30 million in a highly risky investment in a construction company called Austcorp, which later collapsed. So it seems, unfortunately, that the conduct that we have seen in the case of the Health Services Union is by no means unique to that union. It is clear beyond any reasonable doubt that there is a pressing need for substantial reform of the governance of unions and registered organisations under the Fair Work (Registered Organisations) Act.

The bill before the House this afternoon purports to deliver the program of substantial reform which is so clearly needed if low-paid, vulnerable members of unions are to avoid being taken advantage of by the very officials who are supposedly there to advance their interests. There is a clear need for that major reform, and the government is claiming that the bill before the House this afternoon delivers that major reform. The bill before the House this afternoon does not deliver the major reform which is claimed. This bill is nothing but a minor piece of window-dressing produced by the minister and the government in a desperate attempt to try and divert and distract media and public scrutiny from the sorry state of governance in the union movement.

As other speakers have made clear, the coalition does not oppose the measures in this bill. As far as they go, they are of some value. But what is clear is that the measures in this bill do not go nearly far enough to deal with the fundamental, wide-ranging, serious problems of governance in the union movement which have come to light publicly in recent years. In the brief time available to me, I want to highlight just three points. The first is that we have seen, regrettably, scandal and mismanagement in union governance in recent times—scandal matched only by the scandal of the incompetent, leisurely response on the part of the supposed regulator, Fair Work Australia. The second point I want to make is that this bill is nothing more than window-dressing and, on any analysis, many of the provisions are minor, technical in nature and, to a surprising degree, quite ineffectual. The third obvious point to make is that the coalition has a better—more substantive, better thought out, more wide-ranging, more comprehensive and more effective—plan to deliver the reform of governance that is so sorely needed in the union sector if low-paid, vulnerable members of unions are to stop being ripped off by the very union officials who are supposedly there to advance their interests.

Let me turn to the proposition that we have seen not one but two scandals of governance in recent years. The first scandal of course is the extraordinary conduct which appears to have become normal behaviour at very senior levels of the Health Services Union for many, many years, according to a comprehensive—late but comprehensive, ultimately—investigation by Fair Work Australia. Let me just remind the House of a mere handful of the comprehensive list of deeply disturbing findings made by Fair Work Australia in its 1,100-page report. We are told, for example, of the use by Craig Thomson, then the National Secretary of the Health Services Union, of his union MasterCard to purchase $418 worth of escort services from Tiffany's in Surry Hills during his stay in Sydney for the ALP conference on 11 June 2005. We are told of his use of the card to purchase $660 worth of escort services from the Staff Calls escort agency, also in Surry Hills, on 26 August 2006.

These are findings by Fair Work Australia, not allegations. We constantly hear the word 'allegation' thrown around by members on the opposite side of the House, but I remind the House that these are findings by a statutory agency following a comprehensive investigation. That statutory agency has found that Mr Thomson, then the secretary of a union registered under the Fair Work (Registered Organisations) Act, spent nearly $6,000 on the services of escorts, using his union credit card. There is no possible basis on which that expenditure can be considered to be in the interests of the low-paid and vulnerable members of that union. There is no possible basis on which Mr Thomson could have persuaded himself that it was in the interests of the Health Services Union to do that.

Nor is there any possible basis on which Mr Thomson could have persuaded himself that it was in the interests of the union for him to take two months off in October and November 2007—fully paid, not on annual leave—so that he could campaign in Dobell to become the Labor Party's member for Dobell. There is no possible basis on which Mr Thomson could have persuaded himself that that was in the interests of the members of the Health Services Union. How could he possibly have persuaded himself of that?

The regulator, Fair Work Australia, found that on 14 separate occasions Mr Thomson used the union's money to pay for air tickets for his wife. How could that conduct possibly be considered to be in the best interests of the low-paid and vulnerable members of that union? The answer is obvious: it could not. It is clear from the Fair Work Australia report that there is a systematic governance scandal occurring in the Health Services Union.

But there is a second scandal, which is the scandal of the indolent, leisurely approach by the statutory regulator, Fair Work Australia, in investigating these very serious matters. It took some 3½ years before a report finally materialised. When the report finally did materialise, we were then told by the Commonwealth Director of Public Prosecutions that it was in an inadequate form for the Director of Public Prosecutions to be able to consider conducting criminal prosecutions against Mr Thomson, because, extraordinarily, Fair Work Australia, after all this time and all this effort, had failed to produce a brief of evidence.

It is very clear why this happened, to even the most casual observer. To anybody who has even the most passing acquaintance with the cosy relationship between senior union officials and the Rudd-Gillard Labor government, it is very clear why this happened. Fair Work Australia were on a go-slow because it did not suit the political interests of the Rudd-Gillard Labor government for this appalling scandal to become publicly known. They were prepared to put at risk the interests of the low-paid and vulnerable members of the Health Services Union. They were prepared to have that investigation go as slowly as possible to avoid political embarrassment.

The Minister for Employment and Workplace Relations was quoted as saying that he was appalled at the goings-on in the Health Services Union. Frankly, when I heard that, I could only summon to mind the scene in Casablanca where Captain Renault said, 'I'm shocked, shocked, to find that gambling is going on in here!' Later in that movie, we had the same corrupt policeman saying that he was going to 'round up the usual suspects'. That is about the nature of the exercise we got from Fair Work Australia and from the government. It has been about doing the bare minimum they can do to be seen to be tidying up a mess, but they really do not want to do it. They really do not want to tidy up this mess, because it does not suit their short-term political interests.

That brings me to the second point I wanted to highlight, that this bill is mere window-dressing. When you look at the substantive measures, they are empty and ineffectual to a very large extent. First of all, this bill leaves the discredited organisation Fair Work Australia in charge of investigations into registered organisations notwithstanding its demonstrated dismal performance in the case of the Health Services Union. Secondly, the bill sets extraordinarily low standards of performance for Fair Work Australia. For example, we are told that if the general manager of Fair Work Australia has notified a registered organisation of a contravention then the general manager must 'within 12 months' make inquiries as to whether the registered organisation is complying with rules that it previously contravened. 'Within 12 months'—what an extraordinary standard of urgency! Or I could refer the House to proposed section 335C in relation to the question of cooperation between Fair Work Australia and the police. We know that Fair Work Australia has performed dismally on this front, coming up with every possible excuse as to why it would just simply be inappropriate for them to cooperate with the police. What an appalling suggestion: for a statutory regulator to be engaged in cooperation with the police! We have had excuse after excuse and now we have a provision which apparently is going to solve that problem. But when you analyse that provision, proposed section 335C, you see it says the general manager 'may' disclose the information, being information in his or her possession, about the conduct of a registered organisation if the general manager reasonably believes that, amongst other things, it would facilitate a police investigation. You could drive a truck through the yawning gap in the elements of that provision. It leaves complete discretion in the hands of the general manager when there is absolutely no basis for confidence in the performance of the general manager and of Fair Work Australia given its indolent approach to investigating the Health Services Union scandal. There is absolutely no basis for confidence that the general manager is likely to bother to exercise that power.

Let us turn to the question of disclosure, because these reforms are trumpeted as delivering a magnificent new standard of disclosure for registered organisations. There is a very curious thing about the drafting of this bill, as I am sure you would have noticed, Mr Deputy Speaker, when you considered proposed section 148A. The disclosure regime is given effect to, not by saying that under the law of the Commonwealth registered organisations must disclose the following information but, instead, by saying 'registered organisations must include in their rules a requirement that information is disclosed'. That is a much weaker and much less binding and immediate approach. By contrast, section 300A of the Corporations Act imposes a positive obligation on listed companies to make disclosure of the remuneration of their five highest paid executives, and further details as to what must be disclosed are contained in the Corporations Regulations. That is a tough and binding approach—a very long way from the feather-light tap on the wrist which is proposed by these weak and ineffectual provisions. Indeed, if a registered organisation finds it all a bit too tough, it can always, under proposed section 148D, apply for an exemption from the general manager of Fair Work Australia—and how tough is that person likely to be? I think the answer to that question speaks for itself.

The third point I want to make very briefly is that the coalition has a much better plan. We will amend the laws to ensure that registered organisations and their officials have to play by the same rules as companies and their directors. We have a comprehensive set of measures which I commend to the House. We have seen a scandal of governance in the union movement and we have seen a scandal of indolence by the regulator, and this bill does very little more than window-dressing to improve the position.

Debate adjourned.