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Joint Standing Committee on Electoral Matters
16/07/2012
Australian Electoral Commission analysis of the Fair Work Australia report into the Health Services Union

EDGMAN, Mr Brad, Director, Funding and Disclosure Section—Compliance, Australian Electoral Commission

KILLESTEYN, Mr Ed, Electoral Commissioner, Australian Electoral Commission

PIRANI, Mr Paul, Chief Legal Officer, Australian Electoral Commission

[13:46]

CHAIR: Welcome. We have your supplementary submission which responds to some matters that I raised in a letter of 11 July. I thank you again for the assistance that you are giving the committee in relation to that. Is there anything that you want to comment on arising out of some of the evidence that you have heard? I want to get on the record some particular material. You have given us written submissions to date, but if there is anything that you think needs clarifying, arising from the discussions we have had or from the transcripts or submissions that you have seen, that would assist the committee in regard to the recommendations that we might make, particularly regarding this suite of recommendations, we would appreciate getting that on the record. We do not need to examine them word for word; some are self-evident.

Mr Killesteyn : Not really. We put the recommendations together fairly quickly, as you would appreciate. Obviously they were ideas that we were suggesting that the minister ultimately, and now committee, consider. As the hearing proceeds, we have had the opportunity to clarify a lot of those. For instance, one of the examples is in relation to the penalty provisions. We have offered, for your information, a model that applies, for example, in the United Kingdom. I think it is a useful model in the sense that it provides a graduated set of sanctions starting with relatively modest fines for fairly objective offences such as late lodgement and then progressively moves up towards more serious offences for misleading information, and then indeed finalised in relation to the investigation powers that we have been discussing in the last hearing.

That is a model that in the circumstances of the HSU case might have provided some additional ability for the AEC to encourage the lodgement of the returns from the HSU national office in a much more expeditious manner. As you would have seen in the chronology that we provided to you in the attachment to our first submission, there were some delays in there. We were in constant discussions and contact with the HSU national office. With some additional powers, for example, to issue a compliance notice to comply, that would have been a matter that we would have had some additional authority to demand the returns.

The penalty sanctions generally have not been changed since 1984. So I think invariably there is an argument that suggests—as you were just talking to Mr Nassios about—that perhaps the penalty provisions are in need of some modernisation and some lifting.

Mrs BRONWYN BISHOP: You still have not addressed the question that is the most serious, so far as I am concerned, and that is the finding that large amounts of money which were unauthorised payments by Mr Thomson during the reporting period, which have been either misappropriated, fraud or theft, are given a tick-off by you as having been disclosed by the HSU and therefore there is no problem. To me that is a gaping hole in the act. You still have not addressed the question of how that should be remedied. Giving you more powers is certainly not the answer, because you do not use the ones that you have got.

I ask you this very specific question: on what date did you decide—and who decided—that the national office of the HSU was not an associated entity? Who made the decision and on what date?

Mr Killesteyn : Mr Pirani will have that information. Could I just respond to the first part of the question. The difficulty I have with this question of whether the payments were authorised or unauthorised is that irrespective if the AEC concluded that there was a payment that was not authorised, we do not have any power to do anything about it. Our power is simply vested in the Electoral Act. At this point it is a finding of Fair Work Australia. The matter is going forward for civil proceedings. That is presumably going to be defended. At this point we have to take the payments as they have made and make an assessment as to whether they have been disclosed. That is the limit of the act.

Mrs BRONWYN BISHOP: Before we go back to my specific question, the purpose of the list of grab bags at the end of your eight-day appraisal of that very large report, not having had the BDO Kendalls report when you did the analysis—and now that I have got it I can see how essential it is to the report—you have at no stage identified this as a problem. That is my objection. 'Just give us more powers', you say, or 'Do something about the reporting limits'. None of that relates to this important issue which is fundamental and a great gaping hole in the act. And you did not identify it, and you still do not come forth with any suggestions as to how such an event should be dealt with.

Mr Killesteyn : With respect, Mrs Bishop, section 318 of the act provides the scope for dealing with payments that an organisation believes are not authorised. The facility was there all the time for the HSU national office to make a statement to the Australian Electoral Commission that they could not provide a complete return because they had concerns about particular payments. That is a facility that already exists.

Mrs BRONWYN BISHOP: That is something where you are blaming someone else again. I want to know what suggestions you are making to ensure that you do not give a tick to theft, misappropriation and fraud.

Mr Killesteyn : With respect, Mrs Bishop, the AEC has not given a tick to theft, misappropriation or fraud.

Mrs BRONWYN BISHOP: With respect, Mr Commissioner: yes, you have.

Mr Killesteyn : No, Mrs Bishop—

Mrs BRONWYN BISHOP: You said that all those moneys were disclosed in the HSU report. End of story—

Mr Killesteyn : And that's all we said.

Mrs BRONWYN BISHOP: You are not interested after that, and that is my objection.

Mr Killesteyn : My opening statement to this committee and indeed to the Senate estimates committee said that we made no assumption, no conclusion about the veracity of the payments whatsoever.

Mrs BRONWYN BISHOP: I am talking about your appraisal of the FWA Act and your grab bag at the end where you are supposed to identify shortcomings of the act. And you have done nothing.

CHAIR: Mrs Bishop, you have made this point on a number of occasions—

Mrs BRONWYN BISHOP: Absolutely. It obviously falls on deaf ears.

CHAIR: I don't think it needs to be continued. You have your view; there are other views. My summary of it, Mr Killesteyn, is: you have done everything in your act that you were required to do. You do not have the power to be a prosecutor in this case. You do not have prosecutorial power—and I note that there have been different governments in the last 20 years, none of which have given you that power—

Mrs BRONWYN BISHOP: I am referring, Mr Chairman, to the letter to you from the minister, which says, 'at the time I sought advice from the Electoral Commissioner on any issues concerning the operation of the Electoral Act which could be considered for possible remedy'. You did not identify—

CHAIR: I knew it was too good to last for the whole of the day, but I remind you that the duty of the chairman of the committee is to take care to ensure that all questions put to the witness are relevant to the committee's inquiry and that the information sought by questions is necessary for the purpose of that inquiry. That is in relation to one aspect.

Mrs BRONWYN BISHOP: That is exactly why I am quoting the letter.

CHAIR: But the other aspect is that if you want to be treated with respect then witnesses should be treated with respect. I think it is not edifying to have this to-ing and fro-ing. We will move on. Hopefully, Mr Pirani is now going to respond to the second part of the question.

Mr Pirani : Mrs Bishop, the authorised officer made the decision on 16 October 2009 in relation to the status of the HSU National Office and part of that was a letter to me from Kathy Jackson dated 13 October 2009 where they went through provisions of the Fair Work (Registered Organisations) Act to deal with the status of the HSU National Office.

CHAIR: So the commission responded to her saying, 'You are not an associated entity.'

Mr Pirani : No. I had sent an email to Ms Jackson and requested further information from both her and from the lawyers Slater and Gordon.

Mrs BRONWYN BISHOP: Can we have a copy of that letter where you sought information from Ms Jackson?

Mr Pirani : There is a range of emails that went from me to Mr Fowlie. Mr Fowlie was the solicitor from Slater and Gordon who was acting on behalf—

Mrs BRONWYN BISHOP: I forgot. He was your de facto adviser.

Mr Pirani : of the Health Services Union National Office. I do have a copy here of the letter from Ms Jackson to me. It was the letter that also accompanied the three annual returns which set out the basis on which she put forward and their lawyers put forward -

Mrs BRONWYN BISHOP: I would also like a copy of your letter to her.

CHAIR: So she put forward that they were not an associated entity.

Mr Pirani : Just bear with me.

CHAIR: Correct me if I am wrong. I just want to clarify this. This is a letter from Kathy Jackson -

Mr Pirani : Kathy Jackson to me.

CHAIR: Asserting that they are not an associated entity.

Mr Pirani : That is correct.

CHAIR: Kathy Jackson.

Mrs BRONWYN BISHOP: And that is accepted by you?

Mr Pirani : Indeed.

Mrs BRONWYN BISHOP: Very convenient. So if anybody writes to you and says, 'We're not an associated entity and here is here are the reasons why', you just accept it.

Mr Pirani : As a lawyer I have looked through the provisions in the registered organisations act.

Mrs BRONWYN BISHOP: How does the registered organisations act affect the Electoral Act?

CHAIR: Hang on. Can we relax a little bit. I want to elicit some evidence here. I do not want a slanging match, because this is important. It is a big issue to you and I want to clarify it.

Mrs BRONWYN BISHOP: It is very important.

CHAIR: I want this in its proper perspective, Mr Pirani, if you could assist me, and I will ask the questions at this stage. In this letter -

Mrs BRONWYN BISHOP: Wait a minute. We are waiting for his letter to her.

CHAIR: Yes, I want to talk about that.

Mr Pirani : I will take it on notice.

Mrs BRONWYN BISHOP: Have you got people here who could find it for you?

Mr Pirani : No, I would have to go back—

CHAIR: Is this the letter of 14 May?

Mr Pirani : That is correct.

CHAIR: I think that is relevant. I just want to get this properly dealt with. This is what she says—and I want to take over the questions here.

Mrs BRONWYN BISHOP: Well, I would like a copy of it, please.

CHAIR: You will get a copy in due course.

Mrs BRONWYN BISHOP: Now. I don't want it afterwards.

CHAIR: Relax and you will get it. Right? Some of us actually know how to ask questions and elicit—and so do you too but at the moment you are not asking questions.

Mrs BRONWYN BISHOP: Yes, I am. I am after that letter.

CHAIR: You are making statements. In this letter of Kathy Jackson's she says as follows: 'In your letter of 14 May you indicated that you regarded the HSU as an associated entity. Respectfully, we take a different view.' And then they detail why they have that view.

Mrs BRONWYN BISHOP: That is what I can read.

CHAIR: I understand that. And the letter of 14 May is where you detail why you thought they were an associated entity, Mr Pirani?

Mr Pirani : That is correct.

CHAIR: Do you have a recollection—without the letter at the moment and obviously if we can get it we would like it because this is an issue that is important to members of the committee—as to initially why you took the view that the HSU was an associated entity?

Mr Pirani : Yes, I do.

CHAIR: Can you please elaborate that for the committee?

Mr Pirani : The reason why is that we had approached the Labor Party and the Labor Party had indicated that the HSU was an associated entity, without any further breakdown of which part of the HSU in fact had voting rights with the ALP.

CHAIR: So that was enough for you to form the view at that stage that the HSU was an associated entity?

Mr Pirani : Initially, yes. We had advice from the ALP national office—

Mrs BRONWYN BISHOP: Have you got a copy of that letter?

Mr Pirani : I have not got it with me.

Mrs BRONWYN BISHOP: Could we have that too, please?

Mr Pirani : It will be on the file. I will take it on notice, Mrs Bishop, to provide it. That letter was subsequently withdrawn. So there will be two letters.

CHAIR: So what was withdrawn?

Mr Pirani : The letter from the ALP.

Mrs BRONWYN BISHOP: What date was it withdrawn?

Mr Pirani : They were both in 2009. I do not have the letters with me but they would stay on the file.

CHAIR: When you say they were withdrawn, were they saying that the earlier information was incorrect?

Mrs BRONWYN BISHOP: The question is: was that withdrawn after that letter?

CHAIR: Okay, we will find that out.

Mr Pirani : Sorry, it was withdrawn before that letter, Mrs Bishop, but I will take it on notice and I will get the two letters.

CHAIR: Yes, if you could do that. I just want to try and get as much as we can on the record at the moment. If it is incorrect please correct it. I am trying to get the correct things.

Mr Pirani : Certainly.

Mr GRIFFIN: Mr Pirani, can you explain verbally what the difference between the two letters was though?

Mr Pirani : Yes. The first letter from the ALP national office was in response to a query from our party registration people about which union entities had voting rights with the ALP and therefore fell within paragraph (d), I think it is, and the definition of associated entity. Those two definitions—in fact they are in paragraph (d) and paragraph (e)—are about an entity on whose behalf another person is a financial member of a registered political party or an entity that has voting rights in a registered political party. So those were the two relevant parts of the definition that we had approached the ALP for advice on. There were two letters—

Mrs BRONWYN BISHOP: Which section again?

Mr Pirani : Sorry, section 287 and it is at subsection (1) and it is the definition of associated entity. So the main issue there, when dealing with the union, was whether it had actual voting rights in the ALP, to determine whether it was an associated entity. So there were two letters that we had from the ALP, one saying it was but then not defining which part of the HSU and then the second letter saying that it was not. But, as I said, we will take that on notice and I will get the letters.

CHAIR: Was that the defining part that changed your mind?

Mr Pirani : No.

CHAIR: Then you have this letter from Kathy Jackson.

Mr Pirani : Then we have a range of emails between myself and Ms Jackson and she refers to a letter which I do not appear to have, but I will go back to my office and find it on the file. We wrote to her saying, 'Well, it appears you are an associated entity. Where are associated entity returns?' I also did that to the lawyer, Ken Fowlie, and we got that response.

CHAIR: When they challenged—

Mr Pirani : When they sent us the forms that had been completed and explained why they were of the view they were not an associated entity.

CHAIR: In plain English can you tell us what was the key factor in your mind in then conceding that they were not an associated entity?

Mr Pirani : Two key factors: firstly, that the HSU national office did not have voting rights in the ALP separate from other branches of the HSU and, secondly, that under the Fair Work (Registered Organisations) Act—in particular section 245—their national office is deemed to be separate from the other parts of the party. When we put those two factors together we accepted that they were not an associated entity.

CHAIR: Is there anything that has come to your attention since that would change your mind or are you still of that view?

Mr Pirani : Based on the information we have there has been no change.

CHAIR: I will ask Alan Griffin if he has got any questions and then I will go to Mrs Bishop.

Mr GRIFFIN: Yes, just on the two letters. So essentially the second letter was in response to a further query or clarification or it basically was instigated by the ALP itself?

Mr Pirani : I would have to take that on notice. It may well have been that one of my executive level 2 officers had approached them about that given that I had had a discussion with Ken Fowlie, who had indicated that maybe they were not an associated entity. So I am not sure whether we actually—

Mr GRIFFIN: Okay, there must have been a misunderstanding at that stage, because in the context of them having separate voting rights and being separately affiliated to the Labor Party this is not the case. It is not the way our affiliation system works.

Senator RYAN: I could not quite hear you then. Could you restate what you said.

Mr GRIFFIN: What I am saying, mate, is that there must have been some misunderstanding, because if the basis of associated entity status is being affiliated then our affiliation is done through state branches.

Senator RYAN: Are there any national branches, for lack of a better way of putting it, of trade unions that you deem to be associated? My understanding is exactly the same as Alan's.

Mrs BRONWYN BISHOP: And mine.

Mr Pirani : We are not aware of any, but we would have to take that on notice.

CHAIR: You can take it on notice.

Senator RYAN: So your view of the law as it stands at the moment is that a state branch of ABC Union that is affiliated to the ALP is an associated entity by virtue of paragraph 287?

Mr Pirani : If it has voting rights.

Senator RYAN: Let us assume that. Further, the national office or group to which the six state associations are all federated and which does not have voting rights, because that is done on a state basis—no organisation, as I understand it, has national conference voting rights—would not be an associated entity.

Mr Pirani : I cannot see anything within paragraph 287 that would make it an associated entity, unless it falls within one of the other paragraphs.

Senator RYAN: You mentioned your reading of the Fair Work (Registered Organisations) Act a second ago.

Mr Pirani : Yes.

Senator RYAN: Has that bill changed your view of the operation of this provision of the act?

Mr Pirani : The act? I have read the Fair Work (Registered Organisations) Act and all it confirmed was that under industrial law the national office of a union has separate legal status from each of the registered branches.

Senator RYAN: Under 287(1)(b), one of the tests is 'an entity that operates wholly or to a significant extent for the benefit of one or more registered political parties'. To your knowledge, has any trade union been deemed to be an associated entity under provision b?

Mr Pirani : I am not aware of any.

Senator RYAN: The state branches are all associated entities of this ABC Union. They pay affiliation fees to and have voting rights in the ALP. They all pay a substantial proportion of their revenue to a national office, which might run a particularly political campaign, such as Your Rights at Work or something similar. Your view of the law at the moment is that that organisation would not in any way be drawn into the associated entity acts unless it had voting rights or ticked another one of these boxes.

Mr Pirani : Exactly right.

Senator RYAN: Do you have a list of organisations that you have decreed to be operating to a significant extent under provision b? Do you list them by—

Mr Pirani : There is no power for us to decree. It is worked out on a case by case basis, depending on what their activities are. The key word there is the word 'operates'.

Mrs BRONWYN BISHOP: Tell me the name of one that you have decided is an associated entity for the purposes of your act?

Mr Pirani : A union body? There are none.

Mrs BRONWYN BISHOP: Just one; any type of organisation.

Mr Edgman : John Curtin House.

Mr Killesteyn : I understand your point.

CHAIR: John Curtin House is not a union.

Mrs BRONWYN BISHOP: That is why I asked that question.

Senator RYAN: They said that no unions had been so decreed.

Mrs BRONWYN BISHOP: No unions: that is amazing. No unions audited, either.

Mr Killesteyn : The provisions under 287(1)(b) have a fairly high benchmark. This is one of the reasons we put forward the idea to the committee is to consider moving to a third-party registration scheme. That would mean so that you would not get into these subjective assessments of whether an organisation is an associated entity or not.

Mr GRIFFIN: If we take that approach, you would bring in more organisations, not only industrial ones but also others.

Mr Killesteyn : Absolutely. We have acknowledged that one of the issues when you move to a third-party registration scheme is the increase in the number of people who are caught by that net. Another is the increase in resources that the organisation would need to understand and comply with the obligations that would arise. Another is the increase in the resources that would need to be made available to the AEC to monitor that larger group.

Mr GRIFFIN: And your point is that if organisations involve themselves in the political process they ought to be accountable.

Mr Killesteyn : We are suggesting that this would be a more objective way of dealing with this issue, because there will be organisations that get involved in political debate who are not caught by the current provisions.

Senator RYAN: But there is a very big difference between the current associated entity test, which talks about political parties, and a third-party registration regime that is broad enough to capture political entity, isn't there? They are two very different concepts, aren't they?

Mr Pirani : We acknowledge that.

Mr Killesteyn : They are different concepts, but we are suggesting that the concept of 'associated entity' is not working as well as—

Senator RYAN: To further the point put by Mr Griffin, the intent of this is to disclose the activities of political parties and the groups that are in orbit around them, for lack of a better way of putting it. A third-party regime such as that in Canada captures groups that are in no way operating to a significant or other extent for the benefit of one or more registered political parties.

Mr GRIFFIN: Or maybe doing so in a manner which is a little less transparent.

Senator RYAN: Groups that are getting involved in the political process, to use your phrase.

Mr Killesteyn : That is true; we acknowledge that.

Senator RYAN: Under 287(1)(a)—and excuse me if this question has been asked before—it says that 'associated entity' means 'an entity that is controlled by one or more registered political parties'. Do I take that as corporate control, in the sense of there being a formal relationship between the organisations?

Mrs BRONWYN BISHOP: Yes.

Senator RYAN: Or could I take it, for example, that if all the members executive of a particular foundation set up to raise money and a number of other things have for a substantial period of time been prominent members of one particular party then that is an associated entity? This organisation has no formal appointment process along those lines, so I am not arguing that there is a constitutional or legal link. In your view, does provision (1)(a) allow to you classify that as an associated entity or does 'controlled by one or more registered political parties' require a formal level of control?

Mr Killesteyn : My view is that it would require a formal level of control. Otherwise, you are asking us to lift the corporate veil, and I do not think that this provision is designed to do that.

Senator RYAN: Okay. Thank you.

Mrs BRONWYN BISHOP: I found that rather generic discussion interesting. But my concern is about the particular circumstances of the HSU and the HSU national office. The idea that you can hive off a bit of the union when that bit is still utterly controlled by the union and say that it is not an associated entity is to me a nonsense. The fact of the matter is that you have a situation here in which you have written to the ALP to see whether the HSU and its national office are associated entities. You operated on that basis until 14 May 2009, when you wrote and asked them. The people you asked were the union's lawyers. You gave up confidence in your own analysis. You received a letter from the ALP saying that it is an associated entity. That suddenly got pulled? Isn't that amazing? Then there was a letter from Kathy Jackson, written in legalese, arguing that it is not an associated entity.

CHAIR: She is on the other side of this particular case.

Mrs BRONWYN BISHOP: Therefore, you say that you cannot use your powers under provision 316, which is your compliance audit provision and which you have used—and I counted them about—about 250 times since 2007. You only bothered to look at HSU East after it all became an absolute scandal. Other than that, not one union has been compliance audited. It is significant that you got this letter and changed your mind in October 2009. That meant that you did not use your powers under 316(2A). The point is—

Mr GRIFFIN: I was wondering when we were going to get to the point.

Mrs BRONWYN BISHOP: that at any time you could have gone in under that power as you believed that it was an associated entity. The Labor Party were saying that it was an associated entity. The scandal is rising higher. You always told us that you could not use your powers under 318. And yet you at no time used this power. Why not?

CHAIR: The significant point needs to be made that the signatory of this letter from the HSU is Ms Kathy Jackson, who is not an ally of Mr Thomson.

Mrs BRONWYN BISHOP: That does not matter.

CHAIR: There is no conspiracy here. When the information is put in front of the commission, they make the correct assessment. Kathy Jackson signed the letter saying that they are not an associated entity on the advice of her solicitors. She is not on the side of Mr Thomson.

Senator RYAN: She is on the side of her union, though.

Mrs BRONWYN BISHOP: I am not interested in that. The fact of the matter—

CHAIR: The point is that you are presenting a conspiracy theory.

Mrs BRONWYN BISHOP: There is no conspiracy. The fact of the matter is that once again the Australian Electoral Commissioner did not use his powers.

CHAIR: He only acts on the information he is give, Bronwyn.

Mrs BRONWYN BISHOP: Until that date in 2009, he believed that they were an associated entity.

CHAIR: Because he was given the wrong information.

Mrs BRONWYN BISHOP: That does not matter.

CHAIR: He was told by the ALP that they had voting rights.

Mrs BRONWYN BISHOP: I am sorry, but I do not believe that he was wrong; he was right that time. The fact of the matter is that he did not act when he had the power to do so.

CHAIR: You are wrong when you are right and you are right when you are wrong.

Mrs BRONWYN BISHOP: You had all this time. You undertook all these other compliance audits.

CHAIR: Can you ask a question? You have been very good today.

Mrs BRONWYN BISHOP: And you have been appalling. Why didn't you use those powers under 316(2A), when you used them on the Liberal Party, the Labor Party, the Cormack Foundation and John Curtin House? Why didn't you undertake a compliance audit of the HSU national office prior to that date?

Mr Pirani : The first issue that we had was that we were trying to get the returns. We wanted the relevant returns published so that people could see what moneys had been involved in the campaign. Our first task was to get the returns. The returns came with that letter from Ms Jackson on 13 October 2009, so we had the returns. The issue then was whether there was any information behind those returns that raised the concerns of an authorised officer and led them to believe that we needed to go in to examine whether there had been compliance with the reporting obligations.

Mrs BRONWYN BISHOP: Mr Pirani, you sat on your hands for two years. You obviously have a policy in the AEC of not investigating unions. Why have none been done?

CHAIR: You need to restrict yourself to asking questions. If you want to make comments, do it in your minority report. Mr Pirani or Mr Killesteyn—

Mrs BRONWYN BISHOP: I have asked the question: why were no unions compliance audited under section 316(2A)?

Mr Killesteyn : The particular provisions in relation to associated entities that brought unions into the mix were passed in 2006. At that time, the number of associated entities increased from some 75 to well over 200. The AEC was not given any additional resources at that time. Since then—and indeed before then—we have applied a risk assessment process in relation to determining which organisations should be subject to a compliance audit. In the case of unions, the main monitoring body, if you like, of registered organisations is Fair Work Australia. They primarily get their resources from financial contributions from their members. As I understand the Fair Work Act, there is a much lower reporting threshold of $1,000 for donations. Our approach has been to primarily focus on those organisations that have financial activities outside of member contributions.

Mrs BRONWYN BISHOP: I do not believe what I am hearing. That is pathetic. I asked for the list of compliance audits that had been done post 2007. There are 250 of them on this list and not one union. You talk about risk assessment.

Mr Killesteyn : And I have just given you an explanation.

Mrs BRONWYN BISHOP: For two years you had an opportunity to go and have a look at the HSU national office. You did not do it.

Mr Killesteyn : The HSU national office, in our assessment, is not an associated entity.

Mrs BRONWYN BISHOP: You decided that after 2009 and changed your mind.

Mr Killesteyn : But we did not have a return until 2009.

Mrs BRONWYN BISHOP: That should not have stopped you going in to find out why, for heaven's sake. For two years you sat on your hands. You could have gone in there and found out why it had submitted no returns.

CHAIR: I am finding some of these comments not only over the top but a misunderstanding of the commission's powers. It is not fair on them.

Mrs BRONWYN BISHOP: No.

CHAIR: If you have a question, put it in a civil way. This discussion and interaction has not been very productive.

Mrs BRONWYN BISHOP: It has been very productive.

CHAIR: No, it has not been.

Mrs BRONWYN BISHOP: It has been extraordinarily productive, because it shows that the AEC, with all the powers that it has at its disposal, has not used its powers. It did not undertake any compliance reviews of trade unions between 2007 and 2012, except of the HSU when the pressure was put on them. And yet they can find time to go and look at—

CHAIR: I am really confused. You have this—

Mrs BRONWYN BISHOP: You had a look at the Eros Foundation. You found time to go and have a look at the Lady Wilson Bequest.

CHAIR: I will quote this. You seem to have a new regulatory fervour and want regulators to go in even when they are not required to go in. Let the commission answer.

Mrs BRONWYN BISHOP: I am sorry; they are required to go in.

CHAIR: The reason I am losing patience is that I am sick and tired of listening to this at every hearing with the commission. You have made your point. It is unedifying.

Mrs BRONWYN BISHOP: Maybe for you, but not for others.

CHAIR: Just ask your question. It is unedifying. Until you have the numbers—

Mr GRIFFIN: I find it appalling, frankly—I really do.

CHAIR: The commission are answering your questions.

Mrs BRONWYN BISHOP: Which union are you in, Alan?

CHAIR: If you have no questions, I will close the hearing.

Mr GRIFFIN: My union?

Mrs BRONWYN BISHOP: Yes, what is your union?

Mr GRIFFIN: The Australian Services Union.

Mrs BRONWYN BISHOP: You haven't been compliance audited, either.

CHAIR: So what?

Mr GRIFFIN: I do not know, because I do not play an active role in the union. I haven't for 20-plus years.

Mrs BRONWYN BISHOP: They are not on the list. What union are you in, Daryl?

CHAIR: I am in one union.

Mrs BRONWYN BISHOP: Which one?

CHAIR: It is called the New South Wales Public Service Association, it is based on the New South Wales Professional Officers Association. I was in it when I was a lawyer.

Mrs BRONWYN BISHOP: They have not been looked at either.

CHAIR: You have to have a basis. You would not know what reasonable suspicion was.

Mrs BRONWYN BISHOP: Really? I read about it in the newspaper and then I found that the journalist writing the stories went and worked for your minister.

CHAIR: I do not think that you are helping your cause. I did not realise that you were so big on regulators going in like cowboys everywhere. Is that the new Liberal Party policy?

Mrs BRONWYN BISHOP: The point that I am making is that the AEC's appraisal of the Fair Work Act—eight days of appraisal—includes a grab bag wish list of 17 items at the back.

CHAIR: And you should demolish that if you do not agree with.

Mrs BRONWYN BISHOP: They are asking for more power. And yet where there are great gaping holes in the act and where there is provision for them to use their powers they refuse to use them. Now they are suddenly saying, 'Give us more power.' I would not give them anything.

Mr GRIFFIN: I have some questions when we get past the diatribes.

CHAIR: I call Mr Killesteyn first. Then we will go to you.

Mr Killesteyn : The only comment that I would make is that my understanding of the objective of the scheme is disclosure.

CHAIR: That is correct.

Mr Killesteyn : It is not about using coercive powers; it is about disclosure. If you look at the history of this matter, the AEC was prosecuting the case against the HSU national office without necessarily using its coercive powers while achieving disclosure.

Mrs BRONWYN BISHOP: You did not.

Mr Killesteyn : The three returns were disclosed.

Mrs BRONWYN BISHOP: Yes. It went from nil in the case of HSU East.

Mr Killesteyn : You are now talking about HSU East.

Mrs BRONWYN BISHOP: You bet. It is the same organisation.

CHAIR: No, they are different.

Mrs BRONWYN BISHOP: Technical entities. They are reporting bodies under the registered organisations act.

CHAIR: We all know about technicalities. I do not mind you prosecuting your case. What I object to is your belligerence and your gratuitous statements, which diminish this committee. I have allowed you the greatest latitude, as long as you want in most instances and more than any other member of the committee. The ALP has given you our time. All I ask for is civility and courtesy. There is no benefit in your performance today.

Mrs BRONWYN BISHOP: I am sorry, but what we are seeing is that the AEC has powers that it does not use and then has the hide to ask for more.

CHAIR: You have made your point. We will move on.

Mr GRIFFIN: I have a couple of questions to make sure that I have the context right. I apologise if I am going over some of the stuff that you have already put on the record, but it is a bit difficult to follow from a distance. Just so we are clear, the provision to extend associated entity status to cover unions came into effect in around 2006. There were circumstances beyond that in terms of returns being received. There was a holdup, as I take it, from the HSU point of view for a couple of years and you were chasing their returns.

Mr Pirani : The amendments that you referred to were made in 2006, so you are correct. In relation to the returns from the HSU national office, I have previously given evidence that when the newspaper reports first came out in April 2009 the AEC at that stage was not aware that the HSU national office had a separate reporting obligation from the rest of the union. It was only after I had the telephone conversation with Michael Williamson in May 2009 that we regarded that there was a separate reporting obligation that had not been met. We approached Kathy Jackson in May 2009 and continued those discussions over subsequent months to find out whether they had the BDO Kendalls report and whether the Industrial Registrar investigation had been finalised—that subsequently became the investigation by the general manager of Fair Work Australia. We encouraged them to get disclosure returns to us as soon as possible.

Mr GRIFFIN: And those returns were received on 13 October 2009?

Mr Pirani : That is correct.

Mr GRIFFIN: Then there is the question of their status, which involved letters from the ALP and Ms Jackson. Can you give me the dates of those again?

Mr Pirani : Sorry?

Mr GRIFFIN: In my understanding, the issue of their associated entity status related to two letters from the ALP and one letter from Ms Jackson—correct?

Mr Pirani : That is correct.

Mr GRIFFIN: Can you give me the dates of those again?

Mr Pirani : The letter from Ms Jackson was on 13 October.

CHAIR: 2009?

Mr Pirani : 2009. The letters from the ALP I do not have, but my understanding is that they were also in 2009 but before that date.

Mr GRIFFIN: So, in terms of the national office's situation, you took action in chasing information from the organisation as soon as you were aware of the reports in the media, which were in around March or April.

Mr Pirani : Yes. The first article was in April 2009.

Mr GRIFFIN: So the entire period we are talking about here is from April 2009 to October 2009. The commission was in repeated contact with the HSUA to seek information as well as endeavouring to establish their status, and we are talking about a period of less than six months.

Mr Pirani : That is correct.

Mr GRIFFIN: That is the first point.

Mr Killesteyn : I will just add that the full chronology of our actions in relation to HSU National Office is outlined in the second annexure of our first submission to the committee.

Mr GRIFFIN: The other point I was going to make, Ed, is that your review of the Fair Work Australia report has a series of recommendations, and a lot of those recommendations you have raised previously. Is that right?

Mr Killesteyn : That is correct. I can add some supplementary material, if you like, which identifies where we made those recommendations in the past.

Mr GRIFFIN: That would be useful. As a shadow minister in this area, I had my problems with, as you would recall, the previous commissioner—a man I hold in great respect, but not so much when he was commissioner. But, to be fair to the commission, the power and authority you have is derived from the legislation. That legislation, although it has been amended over time, has substantially been in place under governments of both political persuasions. The point I am making about it, in line with Mrs Bishop's earlier comments—it is my turn for a diatribe—is that I think we can get a bit carried away with the conspiracy theories on some of this stuff.

Mrs BRONWYN BISHOP: There is no conspiracy, just an abrogation of duty.

CHAIR: Yes, there is an abrogation—by the politicians.

Mr GRIFFIN: The point is that that duty relates to the question of legislation you are actually implementing and responsible for, and governments of both persuasions have responsibilities for that.

Mrs BRONWYN BISHOP: A simple abrogation of duty.

Mr GRIFFIN: In fact, in recent times, your government has had more responsibility than ours because you were in government for a damn sight longer.

Mrs BRONWYN BISHOP: I have no idea of the significance of that—

CHAIR: I think it would assist the public record, so we can report accurately, to know when you first put these recommendations to the Electoral Matters Committee. That will disclose whether there was any inaction from the former government or our government.

Senator RYAN: The reviews listed as having been completed since 2007 were not reviews undertaken with any particular cause, were they—they were just the compliance reviews you undertake?

Mr Killesteyn : That is correct.

Senator RYAN: Do you have a set of written criteria on who gets a compliance review?

Mr Edgman : We do have a set of criteria that we use to try and identify the frequency of coverage and in what particular financial year we might do a particular party or entity.

Senator RYAN: To be honest, I am wondering about that fact that there are a lot of associated entities here, including some smaller ones, but, going to Mrs Bishop's point, there are not many trade unions—there are actually none. I do not want to be proven incorrect by saying there are none and missing one.

Mrs BRONWYN BISHOP: There is just the HSU East.

Senator RYAN: Given the quantum of money involved with trade unions, as opposed to the Blue and White Committee of Victoria, which I have never even heard of, is there a reason why there are no associated entity compliance audits of trade unions on that list?

Mr Edgman : The reason that you will find a lot of smaller associated entities on that list is that our approach is primarily to look at political parties rather than associated entities.

Senator RYAN: There are a lot of associated entities there, though.

Mr Edgman : What happens is that when we choose the political parties, we fold in the associated entities with those parties, for the reason that quite often with the smaller associated entities their finances are linked in with the party's. There are movements of money between them. They can have money on deposit between each other, debts with each other. We do it because, if we looked only at the party, we could not see the other flows and the debts incurred. If we have done the party and we have done the associated entities once in three years—because we work on a three-year cycle—and if we come out believing that everything seems to be fine with the associated entities, we have it within our discretion next time we do the party not to do all the associated entities again.

Senator RYAN: This is a list comprising four to five years of work. Given the sheer quantum of money involved in trade unions and the role they play as associated entities on one side of politics, and given that there has been a compliance issue with at least one—I do not know if there are any more—don't you think that looking at this list and seeing the Dunkley Blue Ribbon Club and the North West 200 Club, which would both contribute an order of magnitude less than some of the larger trade unions in my home state of Victoria, it looks slightly odd to people with an interest in compliance that there is not a single trade union on this list? They are the largest funders. They are larger than most corporate donors. Most of these associated entities here would contribute zeroes less than a single large trade union. Don't you think this is a flaw in the judgment you have exercised as to which associated entities you audit?

Mr Killesteyn : I think it is a fair question but, as I explained before, you have for the unions another monitoring body, Fair Work Australia—

Senator RYAN: With all due respect, we have heard before and we have heard from Mr Nassios that that is a completely different regime. That is a regime for a different purpose. You have made your role clear on a number of occasions. I find this list quite extraordinary given the discussions that have happened here before. At no point since the change of government in 2007 has the AEC seen fit to undertake a compliance audit of groups that contributed six figures, in some cases seven, over that period to one side of politics solely—and another if you want to count the Greens. Yet you have made sure that a hell of a lot of small associated entities that contribute to my side of politics have been reviewed. I have no problem with audits being undertaken, but do you think it passes the sniff test of fairness that groups that have paid hundreds of thousands of dollars—millions in some cases—have not even had a touch-up, a question asked by you guys?

CHAIR: Let him answer the question.

Mr Killesteyn : You are not suggesting that there is bias, are you?

Senator RYAN: No, I am asking you to explain—

Mr Killesteyn : Then what are you suggesting?

Senator RYAN: I am asking you to explain why on this list there are myriad groups, including small ones made up of volunteers, that contribute maybe in the order of tens of thousands of dollars in a good year, yet the AEC has not seen fit to undertake a compliance audit of groups that are, firstly, members of the political party that happens to be in government, that have voting rights and that donate much larger sums of money. It is not up to me to make an accusation. I think, given the weighting of this list, that it is a very legitimate question to ask why no trade union has had a compliance review undertaken. If the answer is that it is Fair Work Australia's job, then fine—give us that answer. But I don't think you will find a good portion of the parliament accepting it.

Mr Killesteyn : No. What I am suggesting is that the amendments that were made in 2006 which brought in the unions raised our workload quite considerably—threefold. So the practice that we have had in the basic approach to determining who would be subject to a compliance audit has continued since that time. The other point I would make is that the complexity of the financial arrangements of the unions, where they are primarily reliant on member contributions, is different from the complexity of financial transactions from other organisations, where there is a greater risk in terms of being able to track—

Senator RYAN: Hang on. A number of these organisations you have audited are not members in an industrial sense, but they are members where they might pay an annual membership fee. You are essentially saying that since the parliament passed these changes in 2006 your workload has increased, but you have not reflected those changes in reprioritising your workload. If you are interested in disclosure—and I take it on face value that you are, and I am not trying to imply anything otherwise—

Mr Killesteyn : Thank you.

Senator RYAN: We have had a different philosophy on a few things. To say that groups that are putting hundreds of thousands of dollars into one side of politics—

Mrs BRONWYN BISHOP: Millions.

Senator RYAN: Millions—hundreds of thousands a year. You have looked up some groups that I know do about $10,000 over an election cycle. In fact, should not the sheer quantum of the money attract your attention, not only that they have voting rights? None of these groups in the Liberal Party have voting rights at our conferences, yet you have not seen fit to look at the groups that pay several hundred thousand dollars in affiliation fees to fund campaigns and send shareholders, effectively, to members of the Labor Party.

CHAIR: The inference is that unions have been left alone and that there is no disclosure occurring. That is the inference.

Senator RYAN: No, that is not right. Point of order, Chair: I said I took for granted that what they—

CHAIR: What I am interested in is this. The inference that I draw is that unions are disclosing, that non-disclosure is not occurring from the union sector—

Mrs BRONWYN BISHOP: It is not a question of disclosure; it is about compliance rules.

CHAIR: That is the whole point.

Mrs BRONWYN BISHOP: No, it is not.

CHAIR: I am trying to draw from this that there is no evidence that suggests that the unions in the main are not complying.

Mrs BRONWYN BISHOP: Yes, there is.

Senator RYAN: I am saying that what is being done by Fair Work Australia is being done for a completely different purpose.

Mr GRIFFIN: Nonetheless it still performs a role in disclosure and transparency.

Senator RYAN: Hang on, we want to know about audits. An audit is a very different process too. It ensures that what has been put in the public domain is in fact an accurate representation of the activities of those groups. Mr Commissioner, do you think that this list—and, as I said, it comes as a genuine surprise to me—actually serves to build faith in the compliance audit regime undertaken by the AEC, or do you accept that if some of us have such a violent problem with it, and we are talking about very significant organisations and significant sums of money, that you might want to reprioritise your workload to better reflect those money flows?

Mr Killesteyn : I think it is a fair point. I am not disagreeing at all that there is an important role in making assessment around risk, but it is also in relation to the resources that we have available to us.

Senator RYAN: But risk is a big number too.

Mr Killesteyn : Let me finish.

CHAIR: Let him answer the question.

Mr Killesteyn : If I look at the resources that are covered, say, to do one union, I would probably use the whole of the compliance team that we have and not have anything available for any other compliance audit for any other organisation—bearing in mind that when the act was changed in 2006 there were no additional resources provided to the HSU. So we make these assessments on the basis of providing as best coverage as we possibly can.

Senator RYAN: But if that union gives a million over an election cycle and you can otherwise go after 10 organisations that have contribute $20,000 each, that is surely something to take into account?

Mr Killesteyn : Fair point.

Senator RYAN: But it is not something reflected in the work so far over five years, at all.

Mrs BRONWYN BISHOP: Has the Auditor-General done a project audit of you recently?

Mr Killesteyn : The last audit of the ANAO was in relation to the state of the electoral roll.

Mrs BRONWYN BISHOP: So it was just a compliance audit?

Mr GRIFFIN: That is not the point.

Mr Killesteyn : I guess it was an efficiency audit.

Mrs BRONWYN BISHOP: So you have never had a project audit?

Mr Killesteyn : It depends what you mean by project audit.

Mrs BRONWYN BISHOP: The Auditor-General knows what he means by project audit.

Mr Killesteyn : The ANAO did do an audit of our compliance function.

Mrs BRONWYN BISHOP: When?

Mr Killesteyn : My apologies, I withdraw that. That was an internal audit of our compliance function done by our then auditors, Walter Turnbull.

Mrs BRONWYN BISHOP: Private auditors were used.

Mr Killesteyn : Like most other agencies who employ auditors.

Mrs BRONWYN BISHOP: No, no, no, no, no, no.

Mr Killesteyn : Yes, Mrs Bishop.

Mrs BRONWYN BISHOP: No, I fought valiantly to keep the Auditor-General have the right to do—

CHAIR: We know you are not going to send Mr Killesteyn a Christmas card, so let's move on.

Mr GRIFFIN: The auditing priorities of the ANAO are determined by the ANAO in consultation with the Public Accounts and Audit Committee in consultation with the other committees of the parliament.

Mrs BRONWYN BISHOP: Sorry, Alan, they have the right to audit any government agency—

Mr GRIFFIN: That is right, but it is their right to determine that, Bronwyn.

Mrs BRONWYN BISHOP: with the exception of GBEs, which was recommended by the joint standing committee on public accounts—

Mr GRIFFIN: I know; I was on it at the time, as I recall.

Mrs BRONWYN BISHOP: and overturned by deal by the government with Mr Oakeshott. I want to go back to what you send out for a disclosure compliance review. This is what you say:

I am writing to advise you that the Australian Electoral Commission will conduct a compliance review of the disclosure return lodged. The AEC conducts reviews of political parties and associated entities periodically to assess compliance with the funding and disclosure provisions of the Commonwealth Electoral Act. Section 316(2A) of the act permits authorised officers to require an agent or officer of a political party to produce, in the manner specified, documents and evidence for the purposes of finding out whether the disclosure obligations under the act have been complied with.

You forgot to add in there: 'associated entities', but when I look at the list it is not surprising. Mr Edgman, did you ever do a compliance audit of a trade union prior to 2006?

Mr Edgman : My understanding is that there were no trade unions that qualified as associated entities prior to the amendments to the act in 2006, so the answer would be no.

Mrs BRONWYN BISHOP: All the provisions about disclosure and all those sorts of things—trade unions have got through scot-free.

Mr Edgman : Their disclosure obligations would have been as donors, where they make donations to political parties, or as third parties. I think back in those days it would have been of electoral expenditure, and they were not covered by the compliance review provisions.

Mrs BRONWYN BISHOP: Now we come to the provision of gifts, and to the question of Ms Stevens and her wages and expenditure after 13 April 2007 until the election in 2007. On my estimates, of disaggregating expenditure, $31,000 of that was in salary alone and has not been disclosed by the donee anywhere. The donor, the HSU, said it had given this money, but nowhere is it disclosed by the donee. That is a serious problem.

Mr Pirani : The HSU national office has included that expenditure in its third-party political expenditure return, it is noted in the Fair Work Australia report that they have done it, therefore they did not regard it as a donation.

Mrs BRONWYN BISHOP: To the contrary, it is clearly a donation or a gift within the meaning of the act.

Mr Pirani : All I can say is that the current three returns that were lodged by Ms Kathy Jackson said that they included that expenditure in relation to Ms Criselee Stevens and Mr Matthew Burke as third-party political expenditure under section 314AEB.

Mrs BRONWYN BISHOP: Yes, but I am saying to you that the fact that the union says it is third party political expenditure does not make it not a gift or a donation.

Mr GRIFFIN: But the bottom line is that it was disclosed.

Mrs BRONWYN BISHOP: It has to be disclosed by the donee. That is what has not been done and that is where the AEC gave it a tick. Looking at the evidence that has come before us, I can see that the additional appraisal you have given us is quite frankly not worth the paper it is written on—

CHAIR: Any more questions rather than comments?

Mrs BRONWYN BISHOP: and that a grab bag call for extra powers when you do not use what you have is an insult to this committee.

CHAIR: Any more questions?

Senator RYAN: Can I ask a couple of more general questions about things suggested by the AEC in the first appendix, which were referred to the committee? They are very broad, and I am reading them in the context of previous discussions we have had about third-party disclosure and what I might call a more regulatory approach—capturing more. Have you considered a stricter liability approach where, rather than having a lot more workload, both for the AEC and for people involved in the political process, as a way to encourage compliance we substantially increase penalties—fines and other penalties, depending on what the offence is—and reduce the level of interaction with those who are caught in the net? For example, a third-party disclosure regime like Canada's captures potentially thousands—tens of thousands—of people and organisations. Have you considered that? To be honest, it seems that this list reflects more the previous discussions we have had: that it is about more bureaucratic process and capturing more people in the work of the AEC.

Mr Killesteyn : We have not looked at any particular alternatives to that scheme in the way you put it, Senator Ryan. I think our approach is trying to take out some of the subjectivity of the current provisions, and that is why we believe that a third-party scheme has some merit. But the more you add thresholds, exemptions and other reasons to exclude people from a disclosure regime the more you are actually creating a bureaucracy about whether people really do qualify for the exemptions.

Senator RYAN: The question of whether we regulate political parties and bodies associated with them versus whether we try to regulate everyone involved in the political process is not one about exemption; it is actually underlying what sort of regime we want. It will not surprise you that my preference is not for the latter, because I see no reason to start regulating political activity. These do have an impact on speech and political activity.

Mrs BRONWYN BISHOP: Absolutely.

Senator RYAN: I know that the greater form-filling, administrative and bureaucratic involvement of people serves as a direct disincentive to involvement in the political process, because people are time poor and it is a great deal of work. I know that there is discussion about Canada or the UK, but what I was wondering is whether you could consider an alternative approach for when we come back to look at this, which is that we do not seek to regulate more people and we can get rid of some of the exemptions but we focus the regulation on political parties and associated entities—for example, that effective exemption for national offices of unions mentioned earlier, which would strike me as an obvious exemption that could be removed—and have a system where you just have much larger penalties. Large penalties potentially do amazing things to encourage compliance if you have strict liability associated with some of the activities of political parties.

Mr Killesteyn : We have suggested larger penalties. For instance, there is the basic objective that late lodgement at the moment is subject to prosecution. We are suggesting that there should be an administrative penalty that can be imposed by the AEC so it is much more timely and relevant as far as the noncompliance is concerned.

Senator RYAN: What sort of fine and what sort of penalties are we looking at here? What would you consider to be appropriate? We know a thousand bucks does not work.

CHAIR: If you want to take it on notice and come back—

Mr Killesteyn : The level of penalty would be something about which we would have to consult generally with the Australian Government Solicitor, but I accept your point that a couple of thousand dollars is not going to do it.

Senator RYAN: Just going back to the point we discussed earlier about the fact that your view is that national offices of trade unions that are not affiliated with the Labor Party are not associated entities, would you consider that to be an exemption that should be addressed to make disclosure more comprehensive?

Mr Killesteyn : If the intention is to grab them as being the equivalent of an associated entity then yes.

Senator RYAN: The reason I say that is that I would not want the state branches of ABC Union paying affiliation fees and then handballing a hell of a lot of other money to a national office to run campaigns. Here we have an incentive that changes behaviour purely to avoid a disclosure obligation. That presumably is bad regulation.

Mr Pirani : I am not arguing with you, Senator.

Mrs BRONWYN BISHOP: I just want to go to the letter from Slater and Gordon dated 23 May 2012.

Mr Pirani : I would need a copy of that.

Mrs BRONWYN BISHOP: I think we gave you a copy.

Mr Pirani : No, I gave my only copy up to the committee.

CHAIR: No, this is the Slater and Gordon one.

Mrs BRONWYN BISHOP: This is the Slater and Gordon letter that went on the record at the last hearing.

Mr Pirani : Sorry. I would like that as well, thank you.

Mrs BRONWYN BISHOP: This is relating to disclosure and adequacy of disclosure. It says:

The third party political expenditure and donor returns submitted by the HSU on 13 October 2009 were largely based upon the findings of the Slater & Gordon/BDO Kendalls Report, The report was prepared by the firms with a particular focus upon the credit card expenditure during the period. In addition to the credit card statements, officers of the HSU also provided a schedule of electronic payments from an HSU account with SGE credit union which they had particular concerns with … Payments not made by credit card that did not appear on that schedule were not captured by the investigation conducted by the firms and included in the final Slater & Gordon/BDO Kendalls Report. In preparing the …Schedule, officers of the union were limited to the statements for the SGE account.

In other words, you have argued again and again that Kathy Jackson, when she finally put in the returns—and I do find it somewhat unfair that we neglected to say that it was Mr Thomson who failed to put in the returns; she was cleaning up the mess—

CHAIR: Hang on. You are not going to verbal Mr Thomson.

Mrs BRONWYN BISHOP: Yes, I am.

Mr Pirani : The 2007-08 return, which was for the election period due on 18 November, 2008, which was when Ms Jackson was apparently the responsible—

Mrs BRONWYN BISHOP: And the 2006-07, 2007-08 returns were required by?

Mr Pirani : The 2006-07 return was due on 18 November 2007, just before the election on 24 November.

Mrs BRONWYN BISHOP: They are saying here that they relied on this report. Having just got this report and looking at it, there are so many questions that it raises that we are going to have to seriously settle the status of that report so we can use it.

CHAIR: We will consider that.

Mrs BRONWYN BISHOP: Because again and again, it is referred to as being integral to the findings of FWA and the findings in those reports. I ask a simple question when we go to HSU East, when it subsequently put in its first return as a new return, after a considerable period of time—I do not have the dates with me—showing $24 million. When the trade union put in a new return, did that not send signals to you that something was wrong here?

Mr Killesteyn : Mrs Bishop, I have already acknowledged before that that discrepancy should have been picked up. I think it was a failure on the part of the AEC and, as a consequence of that, we have now changed our systems so that, as the data is entered, where such large discrepancies are identified then they will be brought to the notice of our staff.

CHAIR: I thank you for your attendance here today. Obviously, we will consider whether we have further hearings in relation to material that we receive. If you have any supplementary material that you want to place before the committee, please feel free to do so. I know, Mr Pirani, you have been asked for certain documentation. If you can communicate with the secretariat, that would be great.

Resolved (on motion by Mrs B Bishop):

That this committee authorises publication, including publication on the parliamentary database, of the transcript of the evidence given before it at public hearing this day.

Committee adjourned at 14:52