Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Monday, 4 December 2017
Page: 9452

Senator WILLIAMS (New South WalesNationals Whip in the Senate) (12:08): I would like to contribute to this debate on a change in the management of industry super funds from—as Senator Brockman just said—a 50:50 ratio of union officials and management to one-third union officials, one-third management and one-third independent. I have some real concerns about some of the management of these industry super funds—real concerns. I'm glad to see they will be included in the terms of reference for the royal commission. I noted Senator Whish-Wilson on TV on the weekend saying, 'This is terrible, including the industry super funds in the royal commission.' But when Senator Whish-Wilson put forward—I think it was last May—the commission of inquiry bill, which actually passed the Senate here on the voices, one of his terms of reference was donations made by financial services entities to political parties. It was actually in that commission of inquiry that I gave Senator Whish-Wilson a commitment that I would support it; it was conditional on that. It is amazing—I can't hold this photo up; that would be a prop.

But let's go back to 2007. I refer to AustralianSuper. Here is a photo of the inaugural AustralianSuper trustee board—I will give it to Senator Payne to have a look at when I've finished with it. The following directors are representatives of AustralianSuper: there's a bloke up the back, Greg Combet. Here's a bloke in the front, his name is Mr Bill Shorten. Alongside him is a fellow I know pretty well, Senator Doug Cameron. They were the inaugural directors of AustralianSuper.

It's amazing: in 2007 AustralianSuper made a donation. How much, you ask? $27,500. Senator Payne, I wonder where the donation went? It actually went to the Australian Workers' Union. It was listed by AWU on the AEC declarations as a donation. And shortly after—you're not going to believe what I'm going to say, Mr Acting Deputy President Leyonhjelm—the Australian Workers' Union made a donation of $25,000, to who? Mr Bill Shorten's election campaign. Isn't that amazing? To someone who is a director of AustralianSuper. Or is it just coincidental that $27,500 is donated from AustralianSuper to the Australian Workers' Union and, shortly afterwards, $25,000 goes to Mr Shorten's election campaign? You wonder why we're a little cynical about the management of these industry super funds. It was listed on the website of the AEC declarations as a donation. For how long? For 10 years—from 2007 until 2017, when this particular donation was highlighted in the media. Then it was changed: 10 years later it was changed to being listed as 'other receipt'. I think that is quite strange, and some questions need to be answered.

Let's look at industry super funds. There is one union that benefits more than any other from cash flows courtesy of the retirement savings of hardworking Australians. That prize goes to none other than—you'd have heard of them, Mr Acting Deputy President—the CFMEU. According to AEC disclosures over the 10 years to 2015-16, the CFMEU was the beneficiary of payments from no less than four industry super funds—Cbus, First Super, BUSSQ and Mine Wealth and Wellbeing—worth more than, listen to this figure, $12 million. We are about to see that this is just the tip of the iceberg.

The bulk of this $12 million comes from just one fund: the industry fund representing timber workers, good hardworking Australian workers. It's called First Super. The CFMEU has fessed up to the payment of more than $830,000 from First Super in 2006-07; almost $850,000 in 2007-08; almost $890,000 in 2008-09; and this almost doubles in 2009-10 to nearly $1.6 million, followed by three consistent years of over $1.6 million a year in the 2010-11, 2011-12 and 2012-13 financial years. That is more than $9 million from one super fund going to the CFMEU in just seven years. 'Why is it so?' Professor Sumner Miller would ask.

However, a curious thing happens in the three years from 2013-14. The CFMEU claims it has received not one cent from First Super. According to the Australian Electoral Commission, which records these transactions, the numbers aren't out for 2016-17, but it will be interesting to see if the same thing happens again. According to First Super's financial statement for the year ending 30 June 2016, eight coordinators were employed by the CFMEU and supplied on contract to First Super. The total payments for that year were $1.762 million and $1.72 million for the previous year to 30 June 2015. In the latest financial statement of the fund, the CFMEU received over $1.5 million to employ just six full-time and two part-time coordinators. How's that for good pay! I will repeat it: the CFMEU received over $1.5 million to employ just six full-time and two part-time coordinators—so it works out at about $200,000-plus for each of the full-time workers and, of course, less for the part-time workers. These payments are not disclosed in the CFMEU financial statements, despite the CFMEU and First Super being related entities. Further, as noted above, there are no payments from First Super to the CFMEU disclosed to the AEC for these years, perhaps in breach of the AEC rules. This equates to an average salary of just over $220,000 per coordinator.

First Super is spending the retirement savings of hardworking people in the timber and furniture industry, many of whom are on annual salaries of around $40,000. They'd love to get the $250,000 or so a year they'd get if they were with the CFMEU. They are fighting every day just to keep their jobs—and fighting off the Greens, of course—and they are getting dudded by their own super fund, which is paying CFMEU operatives on average $220,000 a year. These are $40,000-a-year timber workers. What are those operatives doing to earn more than five times the average salary of a timber worker?

Who is running this mob? It's Mr Michael O'Connor, a man well known to the shadow industrial relations minister. The CFMEU in Australia is Australia's most militant union. The union or its representatives have been respondents in at least 40 separate matters before the court, facing a total of 1,779 suspected contraventions. Over $10 million in penalties has been awarded against the CFMEU by courts across the country—more than $10 million in fines. Coincidentally, this is about the same amount of money that the CFMEU has pocketed from the retirement savings of the members of First Super. The CFMEU's history of thuggery and abuse on work sites around the country is well documented, but the fact that this union is the beneficiary of the retirement savings of ordinary timber workers is something that this parliament needs to fix.

So what is wrong with having independent directors on the board? I'll tell you why it's being opposed—and probably by the Greens as well. Look up the history. Google 'CFMEU donations to the Greens'. I can't believe that the CFMEU would donate to the Greens. It's the Construction, Forestry, Mining and Energy Union. What do the Greens despise? They despise construction; they hate forestry and cutting down trees; they vehemently oppose mining; and, when it comes to energy, it has to be the expensive renewables. Why does the CFMEU donate to the Greens? I just can't fathom that.

This legislation will bring about a bit of fairness by ensuring that a third of the board of directors is actually independent—not linked to the employers, not linked to the workers and not linked to the unions. Millions of dollars pours into the Labor Party coffers from the union movement to help them with their election campaigns. And, as we know, when it comes election campaigns, it's no money, no mission. It's as simple as that. But those opposite have a full flow of money, and I'm very suspicious that a lot is coming out of the retirement savings of ordinary, hardworking Australians—and that is wrong. I repeat what Senator Whish-Wilson had in his terms of reference for his commission of inquiry. It says at part 4: 'Donations made by financial services entities'—such as industry super—'to political parties'. That was in the Banking and Financial Services Commission of Inquiry Bill 2017, which passed this parliament in, I think, May this year. So I'm very pleased to see that that will be drawn into the royal commission.

I'm glad that we are having a royal commission. In my opinion, we should have had it years ago. In 2013, the Senate Economics Legislation Committee, chaired by Mark Bishop, a Labor senator—a pretty decent bloke and a good bloke to work with—recommended a royal commission. But what did Mr Shorten do when he was part of the government? Nothing. What did Mr Bowen do? Nothing. If we had had it earlier we may have headed off the alleged catastrophes that AUSTRAC have now brought into the public arena.

So I would ask that those sitting on the crossbenches seriously consider what this legislation does. It brings in fairness. What is wrong with having a third of the directors on the board of an industry super fund being independent—and perhaps having even more financial and business experience to invest the money wisely? Nothing whatsoever. That is why we need crossbench support here. We need the crossbenchers to shape up and say, 'If there are 12 on the board of the directors, we'll have four from an industry super fund, four from the employers and four totally independent.' There's nothing wrong with that whatsoever. So I urge the crossbenchers to consider that and support this legislation.