Bill Shorten (Maribyrnong, Australian Labor Party, Minister for Financial Services and Superannuation) Share this | Hansard source

For the sake of efficiency, I might deal with all of the amendments in my comments and then deal with them separately, seeing as the member for Farrer has spoken to all of them. At least, I will try to cover as much ground as I can in the five minutes.

In reference to the coalition amendments (1) through to (3), there are already requirements in the legislation for officers to act with care and diligence, to act in good faith, and not to use their position improperly or use information that they have obtained through acting as an officer of an organisation improperly. The Fair Work (Registered Organisations) Act already prohibits members' money being used to favour particular candidates in internal elections or campaigns, and our proposal does triple penalties for breaches of the registered organisations act.

So let us be clear: the government does not condone officers of registered organisations or officers of corporations, or anyone in a position of trust or fiduciary duty, acting inappropriately, misusing funds that they are entrusted to manage or taking benefits they are not entitled to. There is nothing in the registered organisations act that prevents criminal proceedings being initiated where funds are stolen or someone engages in fraud. The registered organisations act prioritises the conclusion of criminal proceedings before civil penalties are issued in relation to the same conduct—that is in sections 311 and 312. Indeed, the registered organisations act does not prevent criminal proceedings from being commenced even after civil penalties have been applied in relation to the same conduct.

The argument that has been proposed to base these amendments upon is that registered organisations are identical to corporations. They simply are not. Registered organisations are not regulated by the Corporations Act, and this is appropriate. At no time, even in the Howard years, did the coalition government or any of its ministers ever propose saying that registered organisations are identical to corporations—clearly, a change in policy now. Some in this debate have argued that the Corporations Act regulations should be applied to registered organisations. Others have argued that penalties should be increased 100-fold. We believe that this argument is too negative and too simplistic. We do believe that officers of organisations, like those in corporations, are subject to serious duties and obligations. They must exercise care and diligence. They must act in good faith. They must not improperly use their position. We recognise that the financial regulation of these entities is similar. They are required to undertake regular reporting of the financial accounts. Auditors are required to sign off their books in accordance with accounting standards. They are subject to regulatory oversight. And the general powers of Fair Work Australia are similar to those of ASIC. In addition, this bill uses Corporations Law concepts like related party transactions.

We must also recognise that registered organisations and corporations are different creatures, both in practice and in law. The aims of the two entities are different. It is a false debate to say that unions or employer associations are identical to corporations. That has never been in the jurisprudence of this nation, and the case has not been made to change that policy in that way. If you accept what the opposition says, that unions and employer associations should be treated identically to corporations, then why stop there? Do you argue that St Vincent de Paul, who hold significant financial interests, should have the same laws apply to them as apply to BHP Billiton? Should Telstra be regulated in the same way as the toy makers union? Should Coles have the same rules apply as an unincorporated partnership running a bookshop?

We do not believe that the case for these amendments has been made. We believe that the hazards which the opposition are concerned about are adequately catered for in the propositions that are being advanced.

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