Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

Let me start by saying that we have seen over the past few months a classic example of alleged horrendous misuse of some union members' funds by some union officials. It is a disgrace to this nation, not to say embarrassing for the union movement as a whole. Moreover, given the widely criticised role of Fair Work Australia in recent weeks, a better system or policy needs to be set up to investigate any possible regulatory breaches by the unions, while enforcing regulations and any new powers to bring criminal prosecutions directly to the courts.

In his address to the 2012 ACTU Congress on union governance the ACTU Secretary, Dave Oliver, said:

We have a significant responsibility to our members to ensure and make double sure that members’ money is only used for purposes to advance our members’ interests.

I believe Dave Oliver's comments to be sincere and that the union movement want to put as much distance as possible between themselves and the sordid affairs of the misappropriation of members' funds. This motion allows that to happen by expecting the same level of accountability for union officials as expected of company directors under the Corporations Act, which is enforced by the relevant regulatory bodies. Here we have it: even a secretary of the one of the biggest union movements in Australia recognises change is needed to ensure better accountability and transparency for our union leaders. Furthermore, in his opening address the 2012 congress, Mr Oliver said that unions 'have a significant responsibility to our members to ensure and make double sure that members’ money is only used for purposes to advance our members’ interests'.

We have seen shameful actions by union officials time and time again and it is well due that we as federal members do something about it. I can no longer sit back and watch the tireless efforts and hard-earned dollars of mums and dads and men and women—some of whom are in my electorate—who pay their money to these unions allegedly be misappropriated. I am talking about the money that is earned by some of the lowest paid workers in Australia, by people who face an incredible struggle every day just to put food on the table and pay their bills, people who, for the sake of their job security, pay union fees because they believe or are led to believe that union officials represent the interests of their members. Failure to implement this motion would be a grave action of injustice towards the Australian people—towards their integrity and their dignity—because it speaks directly to ensuring that the rights of the Australian people are put first. The union movement in Australia, as I understand it, was constructed to work as a collective group with the aim of bettering workplace conditions. Yet we have seen time and time again, particularly in recent times in relation to the HSU, the misuse of members' funds to the denigration, reputation and personal gain of union leaders. Something has to change and it is time to make that happen.

The regulatory approach of company directors outlined in the Australian Securities and Investment Commission states that company directors are expected to comply with the law. It is backed by the requirement laid out in the Corporations Act 2001. So I ask: if it is good enough for company directors, why is it not good enough for the union officials as well? Well, it is. In fact, it is the intention of union officials such as Oliver and Howes who are calling for this motion. They are calling for this motion because they know that it offers them a level of protection. They want to be measured by the same levels of integrity that are imposed by the Corporations Act. They want to distance their respective organisations from the allegations of poor governance resulting in 156 alleged contraventions which were identified in the recent Fair Work Australia report. It is these findings that afflict a stench over the whole union movement.

The act also states that they are to comply with statutory due care and diligence, that a reasonable person would exercise their power and discharge duties in good faith in the best interests of the company for proper purpose and not improperly using their position to gain advantage for themselves or someone else or to cause detriment to the company and not improperly use information, and to disclose to other directors any material personal interest. ASIC Chairman Jeff Lucy AM highlighted the importance of these aforementioned points in an address to the 2006 Australian Institute of Company Directors. The address of Mr Lucy also looked at the experiences of companies whose directors were charged with criminal neglect of their duty and their companies obviously went broke.

I am slightly surprised that the task of implementing this motion has not been tackled earlier by my colleagues in this place. I truly believe that the aim of protecting the interests of the Australian people—for me the people of right—through implementing this motion is imperative to safeguarding their rights and future. It is with great honour that I put forward the motion. I say this for two reasons because it concerns the lives of innocent working people that I represent as the federal member for Wright. Their welfare is paramount to my role as the federal member, and tougher supervision of unions in this matter is, I believe, an effective way to stay on top of our game. In a common sense approach in saying this I asked the question: who are the union officials? They are, as I mentioned earlier, representatives of some of the lowest paid workers in this nation. In a recent opinion column published in the SundayTelegraph on 20 May 2012, Australian Workers Union National Secretary Paul Howes said:

Being a union official should make you less likely to steal money from workers, but that's not always the case.

It is a sad situation for the entire nation when even union officials admit that other union officials would possibly steal funds from their members. There is no excuse for accepting this type of criminal behaviour. I wholeheartedly endorse this statement when it goes on to say that:

The new compliance structures will work to restore our members' trust in their unions.

What a powerful statement to come from a union official. It is absolutely imperative that this motion work to restore confidence of the Australian people.

We have, as members of parliament, a duty to work constructively to increase the levels of transparency and accountability of unions to their members. Furthermore, Health Services Union secretary Kathy Jackson has also come out in support of making unions subject to the Corporations Act. In her speech to the HR Nicholls Society on 12 June she said, 'Union leaders have urged for tougher regulations of companies to protect investors, but union members need to do more to protect.' Finally, in an opinion column in the Australian Financial Review last week, Ms Jackson said:

Reform brought in by a Coalition government and resisted by many unionists actually served for the better governance of unions.

There is some fine work done in this nation by unions and there are some fine people who contribute to unions, but there is a stench at the moment around the governance of specific union membership and where the contributions of mums and dads to unions end up.

Here we have two senior union officials—Oliver and Howes—both calling for more accountability and transparency. They support accountability and transparency being brought into line with the Corporations Act. If it is good enough for company directors, why is it not good enough for these organisations? In support of my motion, I ask for the government's support in establishing, for the sake of union members right across the nation, the same level of protection that is offered to those who contribute to banks—or anyone whose peak body falls under the regulatory auspices of the Corporations Act.

Stephen Jones (Throsby, Australian Labor Party) Share this | Link to this | Hansard source

I support the proposition advanced by the member for Wright that unions play an important role in this country. I support the proposition advanced by the member for Wright that, when working men and women in Australia pay their contributions voluntarily, as they do, to an association known as a trade union, those funds be used for the purposes for which they are contributed—that is, to advance their interests. These are interests like advancing wages and conditions, and legislation and other regulations that are often the subject of debate in this place. It is to ensure that they get the best deal from legislation and from government and the best deal when it comes to their wages and conditions. I support that proposition. In fact, it would be pretty hard to argue against it although, from time to time, I have heard members stand up in this place, particularly members of the coalition, and argue against those propositions. But it would be very difficult for right minded—no pun intended; a reasonably minded person—to advance that proposition.

Further, I support the proposition that a union official should be accountable to the members they are elected to serve. I say this with some authority on the matter, having spent some six years of my life as an elected representative of the trade union movement and it is something I am very proud to have done. I can honestly say that for six years of my life I went to work every day attempting to do something to advance the living conditions of the working men and women I represented. I am also very pleased to say that, in an overwhelming number of instances, I left that union—and those men and women—in a better state that when I found it. I do not say this because I think I am some exception; I say this because I think that the overwhelming number of men and women whose calling it is to represent union members in this country go to work with that aspiration. They attempt to do that.

I know I represent the views of the men and women on this side of the House when I say, and it was not said by the member for Wright, that the allegations that have been made in relation to the misuse of members' moneys by branches or parts of the Health Services Union of Australia, if found to be true, are nothing short of deplorable. They stand to be condemned by every union member in this country and those who hold and share the values of the union movement. If those allegations are proved to be true, then they stand to be condemned. In so much as the motion goes to the heart of those issues it is very difficult, and I would say that every right-thinking person in this country and in this place should support them.

But that is not really what this is about. This is about the coalition party having another go at the union movement in an attempt to use this place, this chamber, as an opportunity to rake the muck and make allegations against unions and unionists in this country. We know this because, in his address on the motion before the House, the member for Wright advanced that on the basis that it was in the interests of low-paid workers. The member for Wright is an honest man; I know him to be a man who approaches his job with integrity. But if he really had a concern for the plight of low-paid workers in this country, he would leave this chamber immediately and go to his leader's office and to the office of the opposition spokesperson on workplace relations and say: 'This year should we the last year that we have opposed a wage increase through the awards system for the lowest-paid workers in this country. I know that we have done it every year since Federation, but this year should be the last year that we do it.' I know the member for Wright to be an honest man with integrity and he believes in the things that he is advancing. If he wants to do something for the low-paid workers in this country he should make that march into his leader's office and say: 'This should be the last year that we do this. We cannot on the one hand advance a motion in support of low-paid workers in this country and on the other hand oppose wage increases going to the lowest-paid workers in this country.'

The second thing the member for Wright should do is move from this chamber to the nearest phone at his disposal and call the Premier of New South Wales. He should say, 'Dear Premier, I am concerned about the plight of working people in New South Wales and, for that reason, I ask you to withdraw the laws that you are ramming through the New South Wales parliament which are an attack on workers compensation in New South Wales.' That is the second thing that he can do.

I do not believe that that is going to happen and, even if the member for Wright does make that journey and that phone call, I do not think we are going to see that about-face. From that, and upon that evidence, we are entitled to form the conclusion that this is nothing short of a ruse. They are crocodile tears.

Let me contrast that to the very real actions that have been taken by the minister for industrial relations to address the issues. We have taken steps and the minister has announced that we intend to introduce legislation into parliament before the end of the year which is specifically designed to increase the transparency and accountability of registered organisations, both employer and trade union registered organisations. For instance, it will require the full disclosure of remuneration and board fees to be made to all members.

I interrupt my line of thought here for a moment. When I was running my union—and I am sure that the member for Chifley had a similar approach—we had a very simple rule: if you are a representative of the union and you are sitting on a board, you take one salary and not two. If you are receiving remuneration as a result of your being a nominee on a board, whether that be a superannuation board or any other board, you donate those fees back to the union because that is the right thing to do—you take one salary, not two. I think it would be a good thing in this country if many of the employers and corporations took the same approach instead of featherbedding their own remuneration. I think that is the right principle. But the proposition that will be advanced by the government is that all board fees and remuneration should be disclosed to members, and I think that is the right thing to do. It will require transactions with related parties, including family members or companies related to family members, to be disclosed to members as well so that we cannot have registered organisations taking advantage of union funds to send contracts to family members or other related entities where that would not otherwise pass a due diligence test. It will require officers to undertake training in financial accountability that is related to their duties. It will require organisations to develop policies in relation to financial accountability and management. It will recognise the important role played by trade unions and employer organisations in our federal workplace relations system.

I support bona fide reform in this area. Members should have full control over the affairs of their union, including the remuneration paid by their union. It was interesting to note that, when the executive remuneration legislation was before this House earlier this year, those opposite took an entirely different approach. They said that the shareholders should not have tools at their disposal to control the remuneration of board members of publicly listed companies. They want to impose an obligation on union officials that in many instances they are not willing to impose on employers. The whole thing is a ruse. We need reform, and members on this side will support genuine reform.

Steven Ciobo (Moncrieff, Liberal Party) Share this | Link to this | Hansard source

I am pleased to support the excellent motion moved by the member for Wright. It is one that encapsulates the feelings of many Australians who are very angry at the form of the Australian union movement and in particular at the political arm of the union movement, the Australian Labor Party. The reality is that tens of thousands of ordinary working Australians who are making award wages have seen their money frittered away by hacks in the union movement who have squandered the hard earned money of those lowly paid Australians while members of the Labor Party averted their eyes.

This motion seeks to encapsulate the strong community sentiment that enough is enough. Australians are tired of the Australian Labor Party looking the other way while tens of thousands of dollars—and in some instances there are allegations of hundreds of thousands of dollars—of the money of low-paid Australian workers is spent at the behest of union leaders to support the things that union leaders want. This motion is a good starting point, but in reality what we need is a royal commission into the Australian union movement. The Australian union movement should be subjected to a royal commission so that we can get to the bottom of what is going on. A labour force of hundreds of thousands, if not millions, of people are seeing the money that they pay to the union movement—a million dollars in one union alone—misappropriated.

I noticed that Labor members opposite laughed. Labor's fundamental problem is that they think it is funny when potentially millions of dollars are misappropriated. When a member of parliament stands up and says, 'We will stand up for low-paid Australian workers', says that it is not good enough that their money is being misappropriated, it is not good enough that the Australian Labor Party turns the other way and it is not good enough that they fly blind in the face of the allegations, it concerns me that Labor Party members think that is funny. And why do they think it is funny? Here is the great con: the reason they think it is funny is that basically every single member of the Australian Labor Party is a former union hack who has bought their way into the Australian parliament. Workers pay their fees to the unions and that money helps pay for the campaign activities of Labor members. That is why people on our side turn their noses up at the sheer rank hypocrisy of Australian Labor Party members when it comes to the fees that are paid to low-paid Australian workers.

There should be a royal commission into exactly what is going on the trade union movement. But the extraordinary thing is that the allegations have been around for a long time. I have had allegations put to me by an unsuccessful tenderer for a public authority who lost out on a tender despite the fact that they were the cheapest tenderer. They investigated why they lost the contract. What went wrong? It was reported back that they had not made big enough contributions to the so-called training funds of a particular union. This is what concerns us. Allegations like that have been around—

Honourable Members:

Honourable members interjecting—

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

Order! I ask the member to resume his seat. I ask the honourable member to come back to the motion before the chair.

Steven Ciobo (Moncrieff, Liberal Party) Share this | Link to this | Hansard source

The motion before the chair, Mr Deputy Speaker Adams, deals with arrangements of oversight of union movements. Very serious allegations against union movements have been around for years. That is the reason there needs to be better transparency, that is the reason union officials should be held to exactly the same standards that apply to company directors and that is the reason we need a royal commission into the trade union movement. It is not right, it is not fair and it is not equitable for those workers who pay their money, day in and day out, expecting that their rights and their best interests will be upheld by people who are more interested in finding their way into this federal parliament or into a state Labor parliament. That is the reason we need to have better oversight.

In summary, there should be a requirement that union officials exercise due care and diligence that a reasonable person is expected to undertake, to act in good faith in the best interests of the company and for proper purpose, and not improperly use their position to gain advantage for themselves or someone else or cause detriment to the company. That is what applies to company directors and it should apply to union officials as well.

Ed Husic (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

What stunning hypocrisy; what unbelievable behaviour! If anything, that last contribution really demonstrates what is beneath the veneer of this motion. Those opposite wring their hands at any sign of criticism of corporate Australia. They are out there upset and uptight at any point at which you criticise corporate Australia. They drag their own feet on reform that might not reach the approval of corporate Australia. You only need to look at how long it took to get trade practices reform through the gritted teeth of corporate Australia because those opposite would not do anything about it. But, whenever they get a chance to bag out unions or their members, they are there with a straight spine. They are there, first off, taking any chance they can to bag out unions and to ignore working Australians, unless of course they are able to be used as a media opportunity. The Liberal Party never meaningfully engage with the union movement. They never, ever engages with them. It is simply tick-a-box, stakeholder consultation where they are telling you what they are going to do and not really trying to involve the union movement on issues that affect their members. They will never seek the unions' ideas out and they will never work to sort out differences.

Let me contrast it this way. If we on this side of the House were to ever treat corporate Australia in the way that those opposite treat the union movement, they would be the first to feign outrage and to have a national wailing movement with confected outrage about the mistreatment of corporate Australia. How is it that those opposite can continually malign, bag out and criticise the union movement and never meaningfully engage with it or see them as people who have an inherent stake in the future of the economy, in the communities they operate in and in this country? Why do they never ever see them as a group that should be consulted and worked with? The Liberal Party are only ever there to bag them out or to see if they can score a political point out of them. The people who had the Work Choices cape are now telling us they are the greatest offenders of the low paid whereas, as the member for Throsby pointed out, they are never there supporting any submission to increase the salaries, the incomes or the wages of the lowest paid in our society.

To the matter at hand, I have spoken on the record encouraging unions to embrace accountability and to champion transparency, not just because it builds a greater affinity and a greater commitment to unions as a whole, but because it is simply the right thing to do. But, with respect, we do not need this resolution to do that, because as a government we are already acting. The government has already been clear, through the introduction of legislation in parliament which is specifically designed to increase transparency and accountability of registered organisations—not just unions, but also industry associations—that would require, for example, remuneration and board fees to be disclosed to members; require transactions with related parties, including family members, and transactions where an officer has a material personal interest, to be disclosed; require officers to undertake training in financial accountability; require organisations to develop policies in relation to accountability and management; and recognise the important role played by unions and employer organisations in our federal workplace relations system. These things are being introduced by us as a result, I emphasise, of widespread consultation not just with one group or one section of the community—industry associations—but also with unions. It has been open; it has been transparent. It has not been conducted behind closed doors; it has not been foisted on the parliament as an ambush. The legislation that was specifically designed to hurt one group in society, Work Choices, contrasts with what we are doing, which is talking with people and trying to introduce reform.

The other thing I have to say to those opposite is: just bear in mind the unintended consequences of what you are saying. There are a number of people who are affected by this—not just unions, but industry associations as well. I would be interested in getting from them a sense of where they are going to get people to go onto their boards of management if the opposition enforce the types of provisions they are trying to suggest should be enforced through what is being proposed here today.

Josh Frydenberg (Kooyong, Liberal Party) Share this | Link to this | Hansard source

It is with great pleasure that I rise to support my friend and colleague the member for Wright in the motion that he puts, as well as the member for Moncrieff, who seconded the motion. Today a leader of the Australian union movement could well be found admitting in private 'Now is the winter of our discontent.' Tarnished by the rolling scandals of the Health Services Union, plagued by factional warfare among its leadership and struggling to maintain a declining membership, which is now at only 12 per cent of the private sector workforce: these are the realities of the current union landscape.

Yet, despite these seismic developments, many on the other side of the House continue to maintain, as if nothing has happened, that it is business as usual. They continue to roll up to the ACTU conferences chanting Soviet era songs and pledging their allegiance. But they are in denial, for the HSU scandal is something more than a passing event. It goes to the core of good governance and the standards of transparency and accountability that we expect from our organisations and our community leaders. It goes to the heart of what we consider to be criminal behaviour and subject to significant punishment. This is what the motion put forward by my friend and colleague the member for Wright is about. It is about saying that we expect the government to hold unions and their leaders to the same standards that we would expect of our companies and their directors. It is not enough for AWU secretary Paul Howes to simply say:

... the alleged actions of a small minority in a relatively small sector have stained the reputations of the majority ...

and to use that as an excuse for not supporting wide-scale reform. Nor is it sufficient for Jeff Lawrence to say "union members have a right to be confident that their money is being well spent" but then not put in place real changes that will prevent a repeat of what happened at the HSU. The opposition has a plan that the government should support, a plan to pass legislation that will see registered organisations subject to the same rules and the same penalties set out in the Corporations Act 2001. Currently trade unions, like employer groups, work as registered organisations with obligations under the Fair Work (Registered Organisations) Act 2009. Such obligations include not using their position for personal gain, ensuring the appropriate use of members' money and acting at all times in the best interests of the members. However, the penalties are not nearly as significant as those found in the Corporations Act. For example, under section 287 and 288 of the Fair Work Act, civil penalties for using information to the detriment of the organisation or for personal advantage could involve fines of up to only $2,200 for an individual, and no criminal provisions apply. In contrast, under section 184 of the Corporations Act, criminal offences could lead to a fine of up to $200,000 for an individual and/or imprisonment for up to five years. This is what now is required.

What is more, the coalition is not prepared to leave Julia Gillard's creation Fair Work Australia and its general manager to police to enforce or to investigate these new obligations on registered organisations. We need to separate the watchdog role of Fair Work Australia from its day-to-day role solving disputes and making agreements. This is why it took nearly three years or more for Fair Work to produce a report into the HSU, highlighting its institutional 'go slow' tactics as well as disconcerting levels of incompetence. Tony Abbott has said that in government we will establish a new body, the Registered Organisations Commission, which will enforce these new compliance organisations, educate members of registered organisations about their rights, and also act as a repository for complaints from its members.

This motion is not an attack on unions. In fact, there are many good people who are members of unions. They make a significant contribution to the betterment of our country. But what this is about is an attack on corruption and building levels of responsibility, accountability and transparency. With more than 150 findings by Fair Work against HSU, and 70,000 low-paid workers being short-changed by thousands of dollars wasted and misused something needs to be done. This motion goes some way towards that end.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

While I did not have a chance to hear all of the contribution from the previous speakers, I am sure it would have been considered. Nevertheless, I rise to oppose the member for Wright's motion. Whilst I have a lot of time for the member for Wright—I am sure I will see him down at the Senate rugby field tomorrow morning, where we might be on the same side or on opposing sides—nevertheless I do oppose his motion. I respect his intentions and respect that commitment of everybody in the House to accountability. However, I do reassure the member for Wright that in the last few months the Gillard Labor government has taken an unprecedented number of actions to improve the regulation of trade unions and employer organisations as well—something that I look forward to reading the transcript of his speech to see that he has mentioned.

Given the findings by Fair Work Australia in its reports regarding the HSU national office and the HSU No. 1 branch, the federal government has repeatedly stated on the public record that the conduct outlined in Fair Work Australia's reports is not acceptable at all. We believe, and I believe in my discussions with the union movement, that the problems with the HSU are not representative of the broader trade union movement at all. We recognise and understand that unions and employer associations play a critical role in facilitating the operation of the workplace relations system. I say that from my experience in the union movement both when I was a teacher—when I worked unpaid as a teacher as part of enterprise bargaining negotiations—and then as a member of the Queensland Independent Education Union as a union organiser, when I sat down and worked on behalf of my members.

I should say that I do not know the HSU very well. We do not have an HSU in Queensland. United Voice, the AWU and a few others would basically cover that calling that the HSU covers. But I can say that I do know the three unions that I am a member of: the Independent Education Union, which looks after private schools' union members; United Voice; and the ASU's clerical and administrative branch. I have had a lot to do with them, particularly the Independent Education Union, whose annual reports I see every year. A respectable auditor goes through their accounts with a fine toothcomb. Having had a union credit card, I can say that I seemed to spend every month laboriously going through to justify anything and everything that I put on that union credit card—which is the right thing and the appropriate thing to do. Obviously things did go a little bit astray in the HSU No. 1 branch, where they were able to put such things on the union credit card.

I take my role as a Labor representative very seriously, as I am sure the member for Wright will acknowledge, but I also took my role as a union representative very seriously and would not ever spend a union member's dollar unless it was in pursuit of the best interests of that union member. I took that role very, very seriously indeed, and most of the trade union members I have ever met are similarly inclined. They are passionate people trying to do the right thing by working members of Australia.

Obviously, we have had a long and free independent union movement. If we trace our days back to Barcaldine, the shearers' strike and the formation of the Labor Party out of the union movement, we can see that the union movement and the Labor Party have always had that strong connection. In fact, I have always seen the Labor Party as the political arm of the trade union movement. Members of trade unions, like members of employee organisations or other organisations must be respected and their interests must be respected. Obviously, they have every right to expect that their money is used only for the benefit of members. Financial transparency is a good thing. I have nothing to hide, nothing at all, and no problems with disclosure by registered organisations to their members. The bills introduced by the Gillard government will improve the way that investigations into breaches of registered organisations provisions are conducted by the general manager of Fair Work Australia. We have overseen the tripling of civil penalties where people have contravened the Fair Work (Registered Organisations) Act 2009, and I look forward to that further supervision continuing.

Paul Fletcher (Bradfield, Liberal Party) Share this | Link to this | Hansard source

I am very pleased to rise to speak on this extremely important motion, which goes to a central question: what is it that the leaders of unions in Australia are doing with their members' money? Is there a reason to be concerned or should we be satisfied that everything is fine and that there is no need for further action on this front? I am sorry to say that the evidence suggests that we need to be very concerned about the governance occurring in unions around Australia. There has been, quite properly, very detailed focus on what has been happening in the Health Services Union, but the problem appears to be significantly more widespread.

What is it that union leaders are doing with their members' money? The first thing they are evidently doing is paying themselves very generous salaries. Michael Williamson of the Health Services Union is reported to earn a salary of $330,000 a year. Mr Bernie Riordan was until recently the head of the Electrical Trades Union in New South Wales and, according to the Sunday Telegraph, last year he earned nearly $400,000 from a combination of his union job and directorships of three superannuation funds and businesses. Kathy Jackson has admitted to earning $270,000 in her role at the Health Services Union. This exchange occurred on 7.30 on 21 May:

CHRIS UHLMANN: Doesn't that seem a little excessive...

KATHY JACKSON: Yes, it does.

CHRIS UHLMANN: ... for someone who represents some. Poorest workers in Australia?

KATHY JACKSON: I agree with you but let's look at the history of this. As I said previously this was rammed through the council, by Michael Williamson and his people. We objected to it.

The role of union members and union officials in relation to their members in enriching themselves is seen not only in the basic salaries that union officials are earning but also in the way they have used the industrial arrangements to direct a stream of payments into superannuation funds which are associated with those unions. It appears that union officials regard those superannuation funds with which the union is associated as offering them nice little earners for positions on the boards of those superannuation funds. As I have already mentioned, both Michael Williamson and Bernie Riordan top up their union salaries with additional director's fees from the boards of the superannuation funds on which they sit and to which they were appointed by the unions of which they are officials. Let us remind ourselves what the current member for Dobell has had to say about the appointment of Kathy Jackson as a director of HESTA, one of the big industry superannuation funds. In the parliament recently he said:

She sat on the board of HESTA, collecting board fees for many years, rarely attending meetings. But when the union decided the board fee should go to the union, she left the board.

I do not know whether that precise allegation is correct, but it is an interesting insight into the mindset of one particular former union official, the current member for Dobell, who is himself a former union-appointed director of an industry superannuation fund.

Alternatively, we could look at the Meat Industry Employees Superannuation Fund, in which Mr Wally Curran, who was recently described in the Australian as 'a legendary unionist, former long-time secretary of the Meatworkers Union and a long-serving trustee director of the Meat Industry Employees Superannuation Fund', was a major figure. The Meat Industry Employees Superannuation Fund invested some $30 million in a property company called Austcorp before the company collapsed losing almost all of the $30 million.

These extravagant salaries and some of the other arrangements operate to put these union leaders in a very different class to the often poorly paid workers they represent. I note that Mr Kevin Morgan in a recent article in the Australian argues that this stems from the Hawke government's amalgamations of the union movement and that a new breed of careerist union officials has emerged. This is an important motion before the House. Union governance needs clear scrutiny and action.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak against this motion even though I have a lot of time for the member for Wright—unlike some of his other colleagues here tonight who have ranted and raved and made allegations they would never have the guts to make outside this place. They stand in here and make all these allegations about people, but clearly the simple facts show that those opposite have absolutely no idea how unions work and how they go. The previous speaker is a prime example. He wants to make an across-the-board claim about union officials living on larger-than-life salaries, but that is just painfully untrue. It is incorrect, and it is a slight on the hardworking people who are out there protecting workers whose wages and conditions this lot want to savage.

I note that because the first point of the member for Wright's motion reads:

… serious allegations have been made surrounding the misappropriation of union members funds by union leaders …

They have broad-brushed this to blame every single union official and every single union leader. You want to claim in this motion that every single one of them is rorting their union funds. That is wrong—dead wrong.

Mr Buchholz interjecting—

You should have got your motion and read it properly, because you have made the claim that every union is in there. The fact of the matter is that there are many unions. I am a member of the Transport Workers Union and very proud of it, and I know that those blokes do not earn anywhere near the money that is being claimed. They get out there and work hard and deliver results that are in the interests of their members on, say, freights, which this lot opposed. They do not believe that the people who drive trucks deserve a fair rate of pay for themselves and their families.

Union officials right across this country are out there every day, in some cases slaving away in factories. I am thinking of officials of the Textile, Clothing and Footwear Union, which operates in an industry where people are in low-paid work. These TCFU officials are not earning good money for being union officials, but they get out there and do the job because they care about people. They get out there and care about what happens to people and how they live, and they give them the opportunity to get a fair day's pay for a fair day's work. If you go through what has been said previously in this debate, you have to laugh at the member for Moncrieff, who either had had too many Red Bulls or, seriously, there are a couple of cogs missing in his gearbox. The claims that he made were just outrageous. He said everyone in the Labor Party is the result of the union movement. That is a lie, plain and simple. I have never been an official of a union. I have been in many unions and continue to support unions.

This motion says that all union officials have been misappropriating funds. Let us have a look on the other side of the fence. We have the Fair Work Australia thing going on at the moment that is looking into one union—an issue with one union. At the same time that this is happening, Lend Lease, an Australian company, has been fined $54 million for overbilling its clients for a decade in America. If we used the member for Wright's terminology, then all business owners are crooks. That is the stupidity of the way this has been put. We know that all businesspeople are not. I do not think you were a crook when you were running your business, were you? It is the same thing.

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

It is about transparency.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

The motion is about transparency, and you say they should be under the Corporations Act. But, if you actually know the difference between the Corporations Act and organisations like unions and the regulation of organisations, you would know they are not the same. You cannot treat everyone exactly the same.

George Christensen (Dawson, National Party) Share this | Link to this | Hansard source

Tell Paul Howes that.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

'Tell Paul Howes that,' says the member over there, yapping away. This is a bloke who thinks that this government is run by the left-wing feminazis—that is the credibility of his argument. The Corporations Act and what is involved in the regulation of organisations are two different things. That is very basic—I am pretty sure you would have learnt it in year 10 if you had gone through it. The registration of organisations and directors of corporations are not similar. They are similar in the sense that they have got to exercise care and due diligence, act with good faith and not improperly use their position for personal gain. But the differences in the entities are quite clear. Corporations are designed to generate wealth and protect financial interests for shareholders. Organisations like unions have rights under the Fair Work Act. And let us remember this is the Fair Work Act that your leader, Tony Abbott, put in place when he was industrial relations minister. So in its very first test it screwed up, and you want to blame us. The reality is you do not know how to make legislation, and that is the fault in it. (Time expired)

George Christensen (Dawson, National Party) Share this | Link to this | Hansard source

I rise to support the member for Wright's very sensible motion on union accountability and transparency. The motion obviously in point (a) refers to Fair Work Australia's report into the serious allegations that were levelled at the Health Services Union and in particular, it has to be said, with regard to the member for Dobell and his involvement in that union prior to what will no doubt be his short-lived parliamentary career. Fair Work actually found 181 contraventions of the Fair Work (Registered Organisations) Act 2009—181 times that that single union breached the act.

To understand the extent of corruption in the HSU, you have to look at some of the findings about what was going on there. We have a breach where an official, whom I have already named, used a MasterCard to make cash withdrawals in circumstances where the national executive had not authorised policies or procedures in relation to credit card usage or cash withdrawals. We have the national secretary using his position to gain an advantage for himself—namely, the use of a credit card to pay for hotel accommodation the night after he had resigned from the position. Finding 39 talks about the purchase of incidental goods, chocolate and cigarettes, on the credit card—nothing to do with the running of the union. Finding 56 talks about expenditure relating to flights, accommodation and meals on an overseas holiday—a personal trip—and cash withdrawals, again on the MasterCard, while on that holiday. We go on to finding 64, where the national secretary is found to have failed in exercising their powers and discharging their duties with the degree of care and diligence that a reasonable person would exercise in relation to a whole heap of different spending on entertainment purposes. Finding 117 is of a breach of rules with the expenditure of $4,826 with regard to the establishment of the Long Jetty campaign office. We go on to finding 118, finding 124, finding 125, finding 154, finding 155 and finding 156, all relating to the misappropriation of funds on a federal election campaign—union members' money. I will talk about the three conclusions that Fair Work came to regarding the misappropriation of money on escort agencies. This went on in a union here in Australia. Afterwards when the report hit the deck, all the minister had to say in response was:

The dysfunction in some parts of the Health Services Union has shown that the actions of a few individuals, if left unchecked, can jeopardise the effective functioning of a union in the best interests of its members.

I have got to say that, with a statement like that, I am guessing that the real estate at 21B Baker Street will not be on the market anytime soon. But what, in terms of action, did the minister say? He said that they were going to introduce legislation to improve the accountability and transparency of unions via financial disclosure obligations, higher penalties and proactive compliance education. But what he did not say is more to the point. He was asked by journalists at the press conference if he accepted the proposition that unions should be treated similarly to executives of major companies and he did not say yes to that. Instead he said unions should not be scapegoated for the actions of the few.

This week the government is bringing in legislation that they say is going to ensure transparency and accountability. But I am told that, in fact, it imposes on union officials penalties that are one-tenth of what is imposed on company directors for exactly the same thing. One tenth. So the pain and suffering of victims of a white-collar crime when it comes to unions, that is workers, is worth only one tenth of the pain and suffering of the victims of white-collar crimes in the business sector or shareholders. This is from the so-called party of the workers. The member for Wright is spot-on with this motion. I do not often agree with Paul Howes, but he has called for union accountability and transparency to be brought into line with the Corporations Act, despite what the previous member said, and we are calling on the government right now to implement a plan that will expect the same standards of union leaders as is expected of company directors.

Laura Smyth (La Trobe, Australian Labor Party) Share this | Link to this | Hansard source

(   I am pleased to be able to speak in this debate. Needless to say, and it has been said by many people, the circumstances surrounding the HSU are very difficult circumstances. They are very unfortunate circumstances, and they certainly are not ones that any of us in this place want to see repeated. It needs to be said that they are, however, circumstances that are isolated and that do not affect the vast majority of unions—which go about their business of representing their members in a very steadfast and diligent way. I commend them for it.

At the outset I should say that it has been noted during the course of the debate this evening that, to quote one of the opposition members, 'All those contributing to this debate are union hacks'. I am very proud to support unions, but I have to say that I was formerly a corporate lawyer and acted for corporations. I find it extraordinary that this motion seeks to blur the distinction between organisations representing workers—traditionally not-for-profit organisations acting for workers, coming from a very different background and tradition—and corporations, which have, at their heart, the sole interests of shareholders in making a profit for shareholders. So, to begin with, there is a very different set of philosophical underpinnings to the regulation of registered organisations and the regulation of corporations, and I know that very well.

That said, it is important to note that there are some elements of the arrangements relating to registered organisations which have commonality with arrangements relating to corporations, and appropriately so. For instance, the general duties of officers of registered organisations and directors of corporations are similar. They must each exercise care and due diligence, act with good faith and not use their position improperly for personal advantage. I think it is the case in respect of most corporations, as it is the case in respect of most unions, that this is widely observed and rarely experienced in the breach. In relation to financial regulation, for example, there is commonality in relation to the regular reporting of financial accounts and auditors signing off on the books of those organisations, as is the case in relation to companies, in accordance with accounting standards. Similarly, the investigatory powers of regulatory bodies relating to corporations and relating to registered organisations are similar. So there are areas in which there is commonality, but it is important to bear in mind in this debate that there are very clear distinctions between the philosophical underpinnings of unions, registered organisations and corporations.

With all of that said, in the short time remaining to me I should note that this government has been very clear in the response it has made to ensure that trade unions continue to be democratic, professional, accountable and member focused organisations. I know that the minister has introduced into parliament legislation specifically designed to increase the transparency and accountability of registered organisations—both trade unions and employer organisations—to their members. It includes, for instance, requiring remuneration and board fees to be appropriately disclosed to members and requiring transactions with related parties and transactions where an officer has a material personal interest to be disclosed to members.

So there are a range of steps being taken by this government to scrutinise appropriately the activities and the reporting arrangements for registered bodies. These changes, and a range of other changes, would apply to all federally registered trade unions and all federally registered employer organisations. They represent very significant reforms to the regulation of employer and employee organisations.

Unlike the Liberals' approach to policy—and we are yet to find out what their arrangements will be in relation to regulation applying to workers and regulation applying to employment arrangements overall—these reforms developed by the minister have been made in consultation with peak employer bodies and with the ACTU through the National Workplace Relations Consultative Council. So in the context of those reforms, and having regard to the very distinct differences between unions and corporations, as mentioned earlier, I think it is appropriate that we reflect on the arrangements which are being put in place by the minister and see this motion for what it is: an attack on workers.

Debate adjourned.