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Monday, 7 November 2016
Page: 2001

Senator FIERRAVANTI-WELLS (New South WalesMinister for International Development and the Pacific) (17:12): I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—


Since 2013, the Coalition has sought repeatedly to honour the commitment it made to the Australian people to legislate to improve the governance and accountability of registered organisations -- unions and employer organisations.

Sadly, this legislation was blocked by the previous Parliament time and time again, and consequently was one of the reasons for July's double-dissolution election.

We fought the double-dissolution election on our industrial relations commitments - and won. Following our re-election we are therefore again seeking to honour our commitment to the Australian people by re-introducing the Fair Work (Registered Organisations) Amendment Bill.

The case for reform is clear and compelling. Is there anyone who honestly believes the current governance provisions are doing the job? This Parliament cannot ignore the reams of financial impropriety and gross breach of trust demonstrated by office holders of the Health Services Union, including former ALP National President, Michael Williamson, and former ALP Member of Parliament, Craig Thomson.

Since then the evidence heard by the Royal Commission into Trade Union Governance and Corruption has made it abundantly clear that the Health Services Union officials' behaviour was not an isolated instance.

The final report of the Royal Commission outlines many appalling examples of misconduct in unions, together with many employers with which they deal.

What we find are grave failures of governance and a lack of accountability and transparency within Australia's workplaces and - in some cases - a deep-seated culture of lawlessness among union officials. The final report outlines allegations of bribery, extortion, and payments being made in exchange for cutting workers' entitlements.

In a number of these cases, the misconduct occurred while the Royal Commission was ongoing. We saw cases of serious misconduct, such as the shameless misuse of members' funds by the NSW branch of the National Union of Workers, happening as recently as 2015 - at a time when the Registered Organisations bill had twice been rejected by the Senate.

While the previous Parliament was endlessly deliberating passage of this important legislation, NUW officials saw fit to spend more than $100,000 of members' hard earned money on holidays, toys, dating service subscriptions and even a tattoo.

No one, including those opposite, can deny that there is a serious problem that needs to be urgently addressed. This conduct will continue unless something is done to stop it.

It is the interests of union members that are at stake -- the interests of ordinary working men and women of Australia who have been so let down by so many officials of the union movement.

The government sincerely hopes that, following the double-dissolution election and in light of the findings of the Heydon Royal Commission, members and senators in this new Parliament will be convinced of the need for this legislation.

The Fair Work (Registered Organisations) Amendment Bill 2014 is introduced in the same form as the bills which were voted down repeatedly by the previous Parliament in 2015.

The bill contains measures designed to improve the standard of governance of registered organisations and deter wrongdoing. In short, these include:

a robust regulator with appropriate powers and resources;

BULLET a strong regulatory regime with enhanced financial accountability provisions; and

BULLET meaningful sanctions that can be applied when wrongdoing is revealed.

To improve oversight of registered organisations, the Bill will establish the Registered Organisations Commission, a dedicated watchdog with enhanced powers to monitor and regulate registered organisations.

Members of registered organisations - and the broader community - have a right to expect that any wrongdoing is identified quickly and dealt with swiftly.

This Bill will strengthen existing financial transparency obligations of registered organisations and officers and align them with obligations that currently apply to companies and company directors.

Some registered organisations control revenue and assets worth many millions of dollars. These are businesses controlling significant amounts of money and should be regulated appropriately.

Registered organisations will need to disclose remuneration paid to their top five officers in the head office and any branches. Officers will be required to disclose their material personal interests to the committee of management.

Officers will not be able to make decisions on matters where they have a disclosed interest - addressing obscene situations like the two former Transport Workers' Union heads who signed off on using members' funds to buy themselves two luxury Ford F350 utes, at more than $150,000 each.

These same officials then saw fit to vote in a generous new redundancy policy, which led to a payout of nearly half a million dollars for one of the officials less than six months later.

Remember we are talking about the membership money of hard working Australians. This Bill seeks to give those union members a fair deal.

These measures, however, will have little impact if the penalties for wrongdoing are not high enough to act as a deterrent.

The current penalties do not fit the gravity of the offences. For this reason the Bill introduces higher civil penalties and a range of criminal penalties for organisations and officials who are found by courts to have done the wrong thing.

These penalties are consistent with those faced by companies and directors who break the law. There should be no difference between the penalties imposed when a company director misuses shareholders' funds and when a registered organisation official misuses members' money.

Criminal penalties are being introduced for reckless or intentionally dishonest breaches of officers' duties. Broadly, these offences relate to officers and employees of registered organisations who fail to exercise their powers or discharge duties in good faith and for a proper purpose. They also apply where an officer uses his or her position - or information obtained while an officer - to improperly gain advantage for themselves or someone else.

Criminal sanctions will also apply where an officer does not comply with the commission's new investigation powers. These sanctions align with the penalties that apply to non-compliance with an ASIC investigation and will ensure that officers of registered organisations take their obligations seriously.

Some registered organisations have expressed concern that the new penalties will discourage people from taking on official responsibilities. If that is the case, it is a sad reflection on those organisations but, quite frankly, I do not believe it.

It is very simple: no wrongdoing, no penalty. The only people who have anything to fear are those who do the wrong thing.

Those officers who operate within the law - and I believe this is the majority of officers - have nothing to fear. Rather, they should be comforted in knowing that unlawful behaviour will be dealt with, thus ensuring ongoing members' confidence in registered organisations as a whole.

The government acknowledges that registered organisations play an important role in the affairs of workplace relations in this nation and the broader economy.

Registered organisations are given special privileges under the Fair Work scheme. Additionally, just like charities and our cultural and sporting associations they are income tax exempt. With these privileges come countervailing responsibilities.

Every year, hundreds of thousands of Australian workers pay hard-earned wages as union dues; similarly, Australian businesses - both small and large - pay membership fees to employer organisations.

Workers and businesses invest a great deal of trust in the organisations that represent their interests. They are entitled to expect that these registered organisations operate to the highest standards. This Bill ensures that they will do so.


The government has an unambiguous mandate from the Australian people to ensure that registered organisations act in a transparent and accountable manner.

It is clear that the corrupt and illegal conduct of many union officials will continue unless there is immediate and effective parliamentary intervention, meaningful reform and strong leadership.

It is our hope that this new Parliament will understand the urgent need to act and honour the judgment of the Australian people. We have made it very clear that we stand for a clean, honest and strong union movement. Our commitment to reform is absolutely unwavering.

I call on all other Senators to support honest union members and honest union officials by supporting this Bill.

I commend this Bill to the Senate.

Debate adjourned.