Karen McNamara (Dobell, Liberal Party) Share this | Hansard source

This government is committed to improving the fair work laws so we can build a more stable, fair and prosperous future for Australian workers, businesses and the economy. The measures in the Fair Work (Registered Organisations) Amendment Bill are a key election commitment and deliver our pre-election policy for better accountability and transparency of registered organisations. There is no doubting the public's support for these measures, particularly in light of recent findings following the Fair Work investigation into the Health Services Union and the current royal commission into registered organisations. This government is determined to improve protection for members of registered organisations through the implementation of a comprehensive plan to enhance the government's accountability of registered organisations. Never again should the hardworking members of an organisation such as the HSU experience misappropriation of their funds towards an individual's personal gain. This is why we are reintroducing the Fair Work (Registered Organisations) Amendment Bill.

When Labor and the Greens combined to vote down this legislation, they demonstrated a refusal to support greater accountability and transparency for registered organisations. They have voted against improved protection for union members and have given the green light to further exploitation of honest union members by dishonest union officials. They have also voted against a clearer and simpler reporting framework that would assist both unions and employer associations to comply. While members opposite champion themselves as the defenders of Australian workers, they will be judged by their actions, not their rhetoric. The shadow minister for employment and workplace relations, the member for Gorton, said during his contribution to the original debate in the House:

… the opposition has no tolerance for corruption—none whatsoever—whether it be by union officials or officers of employer bodies. We support tough penalties for those who break the law. We support appropriate regulation for registered organisations, including a properly empowered regulator and consequences for those who do not follow the rules.

Yet the member for Gorton opposed this legislation and went as far as moving an amendment to deny a second reading on the grounds that the House would be ill advised to continue, having regard to the adverse impact of the creation of the Registered Organisations Commission on registered organisations, including unions and employer and employee groups.

There should be absolutely no question about the importance of this legislation. Until this parliament acts and supports this legislation, Australia will be denied a sufficiently robust system to tackle corruption within registered organisations. It is no longer tenable to argue that the present system is adequate to deal with or discourage the sort of behaviour brought to light by the investigation into the HSU. By rejecting this legislation the unholy Labor-Green alliance has given the green light to more of the same behaviour as demonstrated by the HSU, Craig Thomson and Michael Williamson.

This bill replicates the Fair Work (Registered Organisations) Amendment Bill 2013, which was rejected by the Senate on 14 May 2014. However, the previous government's amendments to the Fair Work (Registered Organisations) Amendment Act 2012 demonstrated that there was a need to increase financial accountability of registered organisations, strengthen investigative powers and increase penalties. But these changes were not adequate. In a submission to the Senate Standing Committee on Education, Employment and Workplace Relations inquiry into the registered organisations amendment legislation, the Australian Mines and Metals Association advised in reference to the former Labor government:

… the changes the government has proposed are not tough enough to deliver the accountability that the members of those organisations are seeking

The Institute of Public Affairs commented:

Further measures should be taken to strengthen the financial management and regulation of registered organisations, commensurate with their considerable financial resources.

This government agrees that the Labor government's amendments did not go far enough. This is why this bill strengthens reporting and disclosure obligations to align more closely with the Corporations Act, moves obligations from the rules of registered organisations to the face of the legislation, and provides the new Registered Organisations Commission greater scope to ensure that officers are complying with their obligations and greater powers to investigate when a member makes a complaint about a registered organisation. It is this government's view that registered organisations should be as accountable to their members as company directors are to their shareholders. Like companies, many registered organisations control assets worth millions of dollars, and we have seen members from the other side access these funds to aid their election campaigns. We want to see that these assets are administered properly and used to benefit members.

According to the Australian Bureau of Statistics, in August 2012 1.8 million people were members of trade unions. As of 17 October 2013, there were 112 registered organisations listed with the Fair Work Commission. The majority of these registered organisations are not-for-profit and operate to serve the interests of their members. Some have additional arms or subsidiaries to the organisation that are not related to their status as a registered organisation, such as a for-profit training arm.

For the purpose of this debate, it is important that we acknowledge the financial strength of these registered organisations and demonstrate the level of responsibility assigned to their office bearers. Forty-five per cent of employer organisations and 73 per cent of employee organisations have net assets valued at over $2 million. These assets, and the functions of Registered Organisations, are to protect their members' interests by representing members in industrial matters and campaigning on policies that affect them, such as taxation, workplace relations and broader government policies. Naturally, in order to achieve their aims, registered organisations require funds to cover their direct operating costs, such as advertising and legal matters. These funds are obtained from membership fees, donations and other investments. Therefore, the trust placed in the officials of these registered organisations is high, and the membership deserves appropriate protections and recourse when their funds are misused.

Importantly, this bill introduces higher penalties for beaches of civil penalty provisions, some criminal penalties and stricter reporting and disclosure obligations that compare with those under the Corporations Act 2001. This bill increases penalties for a wide range of civil offences in order to create a real deterrence for wrongdoing by registered organisations and their officers. Serious breaches of an officer's duty, such as where an officer uses their position to obtain benefit for themselves or someone else, are criminal offences. The maximum penalty for these offences is $340,000 or five years imprisonment, or both. The civil penalties for serious contraventions will be $204,000 for an individual or $1,020,000 for a body corporate. Currently maximum penalties for serious offences are only $10,200 for individuals. These offences relate to officers and employees of registered organisations who fail to discharge duties in good faith and for a proper purpose. Criminal sanctions will also apply where an officer does not comply with the commissioner's new investigative powers.

A strong message needs to be sent to discourage wrongdoing by officers and to rebuild the confidence of members and the community. Stronger requirements for registered organisations and stronger penalties will only successfully combat corruption with a tough cop on the beat. This bill establishes the Registered Organisations Commission headed by the Registered Organisations Commissioner. The Registered Organisations Commission will be established within the Office of the Fair Work Ombudsman. Importantly, the commissioner will have independence in the exercise of their functions and powers to direct the staff of the commission. Significantly, the activities of the commission will be subject to the same oversight by the Commonwealth Ombudsman as Commonwealth agencies. This will ensure the appropriate level of transparency and public accountability.

Whilst members opposite oppose these measures, members of the government have not forgotten why these measures are absolutely necessary. The limitations of the Fair Work Ombudsman were exposed through the investigation into the HSU. Members opposite defended the Fair Work Ombudsman, but it took far too long between the allegations first being raised and the eventual findings by the justice system—in total five years. It is clear that the investigations into the HSU by the Fair Work Commission took too long and questioned the Fair Work Commission's capacity to be an effective regulator of registered organisations.

The Registered Organisations Commission will ensure that allegations of wrongdoing are investigated quickly and efficiently. Its sole focus will be on rules relating to the accountability and transparency of registered organisations. Importantly this bill ensures a strong interaction between the Registered Organisations Commission and the Fair Work Commission. Transitional arrangements are included in the bill to ensure any ongoing matters being dealt with by the Fair Work Commission relating to registered organisations can be dealt with by the newly established Registered Organisations Commission. It is absolutely essential that the Registered Organisations Commissioner be able to share information with law enforcement agencies if they reasonably believe it is to appropriate to do so in the course of conducting their role.

This is in direct response to the recent investigation into the HSU, which exposed shortcomings when dealing with possible breaches of criminal laws. My electorate of Dobell, more than any other electorate, has witnessed firsthand the stench of this corruption within the trade union movement. The charges and allegations against the former Labor-turned-independent member for Dobell, Craig Thomson, along with ALP national president, Michael Williamson, exposed the vulnerability of the current registered organisation arrangements. So serious were the allegations stemming from the systemic rorting in the HSU, the breaches were investigated by both the Fair Work Commission and the Victorian Police.

The Fair Work Commission investigation into the HSU identified a total of 181 contraventions of the Registered Organisations Act and HSU rules by union officials and others. The claim against Mr Thomson included 37 alleged breaches of general duties imposed on officers of registered organisations and a further 25 alleged breaches of HSU rules. In addition to these findings, Mr Thomson was arrested in relation to more than 150 fraud related criminal charges, including allegations that his 2007 federal election campaign was partly funded by union money without authorisation. The magistrate found Mr Thomson guilty of using credit cards issued to him in his role as national secretary of the HSU between 2002 and 2007. Mr Thomson was found guilty of stealing HSU funds and obtaining a financial advantage by deception when he used the HSU credit card to pay for escort services, cigarettes, firewood, travel expenses for his previous wife and withdrawing nearly $10,000 in cash from ATMs.

The hard-working, honest members of registered organisations, such as the HSU, deserve better treatment from the people elected to represent their interests. They also deserve government support to stand by their side, and not by the side of dishonest union officials. If it was not for Mr Thomson and Mr Williams' high-profile involvement in the Australian Labor Party, one wonders if the truth of the matter would ever have been exposed. This government is of the firm belief that corruption and poor governance within Australia's trade union movement should be identified and stopped. This government's determination to stand up for honest union members is exemplified through the establishment of the Royal Commission into Trade Union Governance and Corruption. It is clear that the Australian people have become increasingly concerned about a range of revelations and allegations involving officials of industrial organisations benefiting from certain funds, which have been set up for purposes that are often unknown. In the words of former Prime Minister Julia Gillard:

It's common practice, indeed every union has what it refers to as a re-election fund, slush fund …

The royal commission will ensure that wrongdoing in the union movement is exposed and those responsible for illegal actions are held to account.

This government is serious about protecting workers and tackling a culture riddled with allegations of corruption, dodgy deals and secret funds. The time has come for this legislation to be supported; the rorts, the rackets and the rip-offs must end. Members of registered organisations must have their interests protected, and the community must have faith in our institutions. The only people who have anything to fear by these amendments are those who do the wrong thing. Members of registered organisations and the community have everything to gain. It is time for members opposite to stand with the government to ensure honest workers are not ripped off by dishonest union bosses. I commend this legislation to the House and I call on members opposite to do likewise.

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