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Tuesday, 26 June 2012
Page: 4532


Senator EDWARDS (South Australia) (18:12): I rise to speak on the Fair Work (Registered Organisations) Amendment Bill 2012. I concur thoroughly with Senator McKenzie's comments. I sit on the Scrutiny of Bills Committee, and we did have some concerns about the legislation. As Senator McKenzie rightly pointed out, that committee is yet to receive a response from Minister Shorten with regard to those concerns, but here we are, facing the guillotine.

This bill shows how unwilling Labor is to take on and rein in the arrogance and rampant mismanagement of its union underwriters. It shows that Labor is more interested in talk and spin than in true action and reform. The revelations involving the Health Services Union demonstrate that there is a need to ensure that the money paid by members to registered organisations is used for proper purposes. But, under Mr Shorten's plan, former union bosses are going to regulate union bosses. So the former keepers are now going to regulate the current keepers. How can you take Labor seriously when Greg Combet, now Minister Combet, was the head of the ACTU and Bill Shorten sat on the ACTU—

The ACTING DEPUTY PRESIDENT ( Senator Moore ): Senator Edwards, you almost got there—Minister Shorten.

Senator EDWARDS: Minister Shorten—he was not when he was with the ACTU—

The ACTING DEPUTY PRESIDENT: I know, but he is now!

Senator EDWARDS: and now Minister Shorten sat on the ACTU when the member for Dobell, Craig Thomson, also sat on the ACTU—far too many ACTUs all round!

We in the coalition support the need for greater accountability of registered organisations and those who run them. Yet the Labor Party has put forward these weak proposals when it is blindingly obvious that some union bosses will continue to waste members' funds. That is something that, in this day and age, we cannot sustain. The stark contrast between the lifestyles of union officials and their members must be acknowledged. The culture of entitlement for union officials must be brought to heel. We must enact measures that go much further than those contained in this bill. While we will not oppose this measure, we call on the government to support our commonsense amendments.

There is no avoiding it—I must turn my attention to the investigation into the Health Services Union. This shows why reform is needed to end the decades of union arrogance that seems to have crept in, certainly in this sector. Even those opposite cannot ignore the dramatic need for reform, and we would welcome support from the other side for our amendments. The coalition has maintained all along that the process that Fair Work Australia has undertaken on this investigation was severely lacking. Nonetheless, the final report that was produced was substantive and some 900 of its 1,200 pages dealt with the former secretary of the HSU.

The report is a tough read. It details the unauthorised alleged spending of its members' hard-earned money on specific federal election campaigns, on cash withdrawals, on travel, on expensive restaurant dining and on escort services. The report goes so far as to suggest that substantive parts of the member for Dobell's evidence provided to Fair Work Australia were 'false and misleading'. This statutory agency found that the now member for Dobell spent almost $6,000 of his then union members' funds on escort services—hardly the pursuit of members' interests that the health workers who had paid those levies thought their money would be put towards. I wonder how many union officials can really conceive of just how hard it would be and how long it would take their low-paid members to earn the money to subsidise this; I wonder just what the union hierarchy have to say to the hardworking members who fund their insular and seemingly detached lifestyles; and I wonder just how such lifestyles further the interests of these hardworking members, these hardworking people of Australia.

To add insult to injury, Mr Thomson took two months of paid leave from his duties as national secretary of the HSU to conduct an election campaign in October and November or 2007. Again, how can the members of this union have any confidence at all in their officials?

The report has detailed how a culture of disregard for its low-paid members has set in at the highest levels of the HSU. It shows how this was entrenched over many years. Perhaps the most distressing element is that the statutory regulator, Fair Work Australia, took nearly 3½ years to investigate these pressing matters. I remember well sitting in Senate estimates when the officers from Fair Work Australia were being asked the hard questions about why it was taking so long, and the body language, the discomfort, was apparent in the room.

When the report did surface recently, it failed to produce a brief of evidence that could be used by the Director of Public Prosecutions to conduct criminal prosecutions against Mr Thomson. We must ask why this is the case. For a government on the ropes and desperate to avoid airing its dirty laundry, this outcome would seem convenient. It seems successive Rudd-Gillard Labor governments have pulled out every trick in the book to obstruct this investigation from reaching fruition.

As Senator McKenzie outlined earlier, there are many aspects of this matter we still have not been able to scrutinise. But never mind the vulnerable workers whose money has been squandered; never mind that the public want to know the truth and see justice done. Under Labor's proposed bill, there is no explicit provision to allow Fair Work Australia to provide a brief of evidence to the Director of Public Prosecutions. This government now knows that the Prime Minister's own signature institution, Fair Work Australia, is so tainted that it is using this bill to allow the total outsourcing of investigations to outside bodies. Just who will Fair Work Australia outsource its investigations to? Will it be only to those who the general manager favours? And why would certain organisations be favoured over others? To be blunt, this will be a partisan political choice by the general manager which minimises the risk to the union movement. So much for a competent statutory body that is accountable and able to be scrutinised by the parliament.

This whole sordid HSU episode calls into question the competence of Fair Work Australia. How can Australians have any confidence in this statutory body after it has made such a mess? And just why is Fair Work Australia, an organisation so sympathetic to the union movement, not making a better effort to cooperate with police? It just does not pass the front bar test—you could not win that argument in the front bar. If it smells like a pony, it probably is a pony. Under this bill, Fair Work Australia still cannot provide a brief of evidence, and police cooperation still is not bedded down.

This bill, while expanding police cooperation powers, does not make it expressly clear that Fair Work Australia can cooperate with police. Given the track record of FWA, it is important that that be made absolutely clear. Surely the Australian public have a right to expect that taxpayer funded agencies have a duty to fully cooperate with requests from the police. There is also no express provision to allow FWA to provide a brief of evidence to the DPP. Given previous problems, it is important to give express powers to allow for this to happen. Now I turn to the question of disclosure. A comparison of the requirements for registered organisations under this bill against current requirements for corporations is stark and revealing. Under section 300A of the Corporations Act, a positive obligation is imposed on listed companies to make disclosure of the remuneration of their five highest paid executives. In contrast, Labor's bill uses section 148A to propose a far weaker and far less onerous approach for registered organisations. To add to this, Labor proposes that, if even these weaker measures are a bit too much for the unions, they can use section 148D to apply for an exemption from the General Manager of Fair Work Australia—the very same body which has been stacked with former union officials. So former union heavyweights are supposed to be regulating their former colleagues. Such blatant conflicts are the reason this bill is being rushed through before any more recommendations can come out of KPMG's review of the conduct of Fair Work Australia's investigation into the HSU. The Australian public must rue the day the Labor Party used its power to dismantle the Office of the Australian Building and Construction Commissioner and replace it with this toothless tiger.

What then is to be done? The coalition will clean up Labor's mess through a serious of measures to amend the laws to ensure that registered organisations and their officials have to play by the same rules as companies and their directors. I will now briefly outline some of the ways in which, under a coalition government, low-paid workers will not have to suffer the same embarrassing indignity as did the members of the HSU at the hands of their union officials.

We in the coalition believe that registered organisations should be both transparent and accountable to their members in the same way as companies and directors are required to be accountable and transparent to their shareholders. The coalition's plan would ensure that those running registered organisations, such as unions, would have to follow the same rules and regulations that govern the behaviour of companies and their directors. One key amendment will seek to bring across section 184 of the Corporations Act into the Registered Organisations Act. This would make it a criminal offence for bosses of registered organisations to act other than in good faith—that is, it would be a criminal offence were they to use their position dishonestly or recklessly.

While the obligations in the Corporations Act 2001 and the Fair Work (Registered Organisations) Act 2009 are broadly similar, the differences between them in fact are very important. For company officials, using information to advantage yourself or someone else or to cause detriment to the organisation gives rise to a potential criminal offence under section 184 of the Corporations Act 2001. Criminal offences attract the penalty of a fine of up to $200,000 for an individual and/or up to five years imprisonment. In stark contrast, the penalties for comparable offences by officials of a registered organisation, such as a union, are almost nonexistent. Similar obligations under sections 287 and 288 of the Fair Work (Registered Organisations) Act 2009 for using information for personal advantage or to the detriment of the organisation are limited to a civil penalty of up to $2,200 for an individual. There are no criminal penalty provisions.

The coalition's plan will make sure that registered organisations' members, such as small businesses and workers, can be confident that their hard-earned money is being used for the right purposes. Why then does the Labor Party oppose this? For what possible reason? Once again, instead of pursuing good politics and good policy, the government is ignoring a quite legitimate amendment out of, I suspect, bloody-mindedness.

Hindsight is a painful thing, but, if such requirements had been in place for the Health Services Union, some of their officials would have been subject to significant financial penalties and potential imprisonment, just as happens with companies and their directors. There is nothing like the threat of financial penalty or imprisonment to modify the way people behave in the workplace, ensuring that the interests of members or shareholders are protected. Members in this House from all sides of politics should be looking to provide those protections. If everybody is doing the right thing, why not take on these amendments? Why not embrace them so that we can indeed enhance the workplace in the year 2012 rather than miss the opportunity? Under the coalition's plan, the level of reporting and the penalties for non­compliance would be a serious deterrent to the sorts of outrageous conduct we saw in the lavish lifestyle of the union officials of the HSU.

The coalition would also establish a new regulator, named the Registered Organisations Commission. This would have powers broadly in line with those provided to the Australian Securities and Investments Commission. This is necessary to ensure that the regulation of this sector is effective—and conducted with a sense of urgency that was so lacking in the Prime Minister's own Fair Work Australia. This regulatory authority would be required to cooperate fully with law enforcement agencies when it is in the public interest to do so, thus removing the influence of the Labor Party in obstructing and obfuscating serious investigation into cases such as that of the HSU.

This independent Registered Organisa­tions Commission would not only enforce and police the reporting and compliance obligations but would also provide information to members of registered organisations about their rights and act as the body to receive complaints from those members. Furthermore, it would educate registered organisations about new obligations that apply to them and absorb the role of registered organisations enforcer and investigator currently held by the General Manager of Fair Work Australia.

The coalition is encouraged by the recent pragmatic moves made by the Queensland government to amend the existing electoral laws so that unions would no longer be able to give money to political parties—

Sitting suspended from 18:30 to 19:30