Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

I welcome the opportunity to speak on the Fair Work (Registered Organisations) Amendment Bill 2012. It is telling that the announcement of this legislation came just 10 days after the Leader of the Opposition announced the coalition's better plan for accountability and transparency for registered organisations. The government incorrectly accuses the coalition of not presenting policy. Well, here we have an example of the government attempting to mimic coalition policy. But this legislation does not go far enough. It does not include the measures that the coalition believes are required for true accountability and transparency for registered organisations.

There are strict rules to ensure that companies and their directors act appropriately. The coalition believes that these same rules should apply to registered organisations and to their officers. Only then can members of registered organisations be assured that their money is being used prudently. While this bill increases the penalties for officers of registered organisations, it does not go far enough. I shall now spend some time outlining some of the differences between the reporting obligations of companies and registered organisations, as well as some of the differences between directors of companies and officers of registered organisations.

The obligations on company directors are enforced by a number of regulatory bodies including the Australian Securities and Investment Commission and, where applicable, the Australian Prudential Regulatory Authority, the Australian Stock Exchange and the Australian Competition and Consumer Commission. Australians are confident in the ability of these organisations to regulate companies and their directors. The obligations on registered organisations and their officers are enforced only by Fair Work Australia. I do not have enough time to compare all of the obligations upon company directors with all of the obligations upon officers of registered organisations; however, I will take the time to outline some of the significant variations.

Section 180 of the Corporations Act requires that a director of a corporation must exercise their powers and discharge their duties with a degree of care and diligence. There is a similar provision in section 285 of the Fair Work (Registered Organisations) Act. The penalty for a breach by a company director is up to $200,000, while the provisions for an officer of a registered organisation currently apply a penalty of $2,200. The amendments contained within this bill, if passed, will increase the penalty for officers of registered organisations to $6,600, which is still a small fraction of the penalty applied to a company director.

Section 181 of the Corporations Act compels directors to exercise their powers and discharge their duties in good faith, in the best interests of the corporation and for a proper purpose. This is reflected in the Fair Work (Registered Organisations) Act in section 286. Again, the penalty for a breach by a company director is up to $200,000, while the penalty for an officer of a registered organisation according to this bill will be $6,600.

Section 182 of the Corporations Act has the provision that a director or officer of a company must not improperly use their position to gain an advantage for themselves or someone else, or to cause detriment to the corporation, while section 287 of the Fair Work (Registered Organisations) Act contains a similar provision. The penalty for directors of companies is—you guessed it—$200,000, while the penalty as amended by this legislation for a registered organisation is a princely $6,600. A provision that a company director or an officer of a registered organisation must not use information received in their position to gain an advantage for themselves or someone else or to cause detriment to another is in both the Corporations Act at section 183, and the Fair Work (Registered Organisations) Act at section 288. But again, we see the penalty for directors is $200,000, and the penalty in this bill as amended in relation to officers of a registered organisation is $6,600.

I trust that members are seeing a pattern developing here that, even under the provisions that this bill introduces, the penalties for directors of companies remain vastly higher than the penalties that would be imposed on an officer of a registered organisation. This pattern continues, with section 184 of the Corporations Act providing a criminal offence for directors that are reckless or intentionally dishonest and fail to exercise their powers or discharge their duties in good faith in the best interests of the corporation or for proper purpose. There is no corresponding provision in the Fair Work (Registered Organisations) Act and this bill does not introduce any. Under this bill, there are still no provisions creating criminal offences for officials of registered organisations. We have listened intently to the soap opera that has prevailed with regard to the HSU and the member for Dobell, and I stand here in stunned amazement that there has not been greater motivation to impose tougher penalties in relation to registered organisations.

In introducing this bill, the minister said:

This represents a significant increase in penalties to reflect the seriousness with which this government, and registered organisations, take compliance with workplace relations law.

For once, I agree with the minister. It does reflect the seriousness with which the government takes the sorts of breaches that this legislation deals with—it does not take it very seriously at all! It is all for slapping members of registered organisations on the wrist, whilst it is quite happy to hang directors out to dry, or to take them to the gallows or to the guillotine. If you are a member of a registered organisation you can do the HSU thing and you can misappropriate funds and you know the penalties will be light. This legislation does very little to improve that. It is nothing more than a slightly harder slap on the wrist. If a former union boss took compliance with workplace regulation seriously, he would welcome the coalition amendments which have criminal provisions for officers that are recklessly or intentionally dishonest, and which increase civil penalties in line with those applicable to company directors.

Some might think that these disproportionate penalties are appropriate when considering the large packages that some executives are reported to earn; however, these penalties also apply to mum and dad directors who might have little left after paying their employees, not just to directors of listed companies. As recent media has reported, the officers of registered organisations can also be earning substantial incomes, often many multiples of the income of the members that pay their wages. Just as directors have a duty to act prudently for the benefit of shareholders, officers of registered organisations must act prudently in the interests of their members.

This legislation sends all the wrong signals. The penalties in this legislation are a token gesture implemented by a government that is being dragged kicking and screaming to the reform process. It is nothing more than a token gesture. This legislation sends the message loud and clear that the government is not serious about dealing with the sort of unscrupulous behaviour that Fair Work Australia found was taking place at the Health Services Union. Labor is saying that it is a minor matter to defraud members and to act in a way that is contrary to the interests of members. The member for Chifley has said that union officials get paid less than company directors so the penalties should be less. This argument is absolute nonsense. These organisations control vast amounts of funds. They control in many cases the future of the members that they represent. The employees of registered organisations have the ability to inflict widespread harm on those for whose money they are effectively the custodians. Penalties should reflect the potential magnitude of the damage caused by a union officer's illegal action, not the size of their salary. The bottom line is that the fabled 'majority of union officers' who do the right thing by their members have absolutely nothing to fear from the significantly increased penalties proposed by the coalition because, if they do the right thing, if they act in the interests of their members, they will not be paying a penalty.

There are a range of matters not addressed by this bill. The coalition is concerned that former union bosses are regulating the current union bosses. That is an interesting situation—a very cosy situation. This concern is not limited to just the coalition, as constituents have also expressed their concern about the ability of Fair Work Australia to regulate unions. This bill does not address this concern. The coalition's plan for better transparency and accountability of registered organisations would have a registered organisations commission take over the roles of ensuring registered organisations do the right thing by their members and being answerable to parliament. This would address the real concern about Fair Work Australia's ability to do this job.

We have recently seen that there is a certain amount of confusion about Fair Work Australia's ability to cooperate with police and other agencies. The bill, while expanding police cooperation powers, does not make it expressly clear that Fair Work Australia can cooperate with police. I would have thought that cooperation with police forces would be an absolutely binding obligation on Fair Work Australia, not something that requires clarification at this point in time. Given the track record of Fair Work Australia, it is important that it be absolutely clear that Fair Work Australia can cooperate with police. It is also important that Fair Work Australia be able to provide a brief of evidence to the DPP. Again, given the previous problems with this, it is important to give express powers to allow that to happen.

The coalition have been asking a number of questions. How can you take Labor seriously when the Minister for Climate Change and Energy Efficiency was the head of the ACTU and when the minister responsible for this bill, the Minister for Financial Services and Superannuation, sat on the ACTU when the member for Dobell also sat on the ACTU? A cosy little clique, indeed. How can you take Labor seriously when this happened right under Labor's nose while the member for Dobell was a member of parliament and Michael Williamson was the President of the Labor Party? How can you take Labor seriously on ensuring union bosses follow the rules when they have turned the Australian Building and Construction Commissioner into a toothless tiger? And how can you take Labor seriously when they still rely on the tainted vote of the member for Dobell?

This is a bill designed by a former union boss to regulate union bosses and it will be enforced by former union bosses. It is a weak bill that does not go far enough. Union members, many of whom are in low-paying positions, pay their dues every week in the hope that their union will represent their interests. They should not have to put up with union fat cats using their money for long lunches, outrageous salaries and purposes unrelated to union business. Only the coalition has a plan to properly regulate unions. I call on the government to take some real action to improve union accountability.

We have seen in relation to the HSU the most egregious waste of the funds of union members—union members who work hard and go without to contribute their union dues. These are not members being paid the sorts of salaries that union officials are getting paid. They are everyday hardworking Australians who have seen their money squandered and who have real concerns about the future of the union.

The Australian Labor Party and the union movement do not need a complex review or a detailed examination of why union membership is declining. They need look no further than the mirror to see why they have a problem. They have a problem because the unions of today have lost sight of the goal for which they were established, and that was to look after the interests of the members. When you look at this legislation that has come out of the Australian Labor Party, the puppet of the union membership, you can see that the union movement is not concerned about accountability and having an organisation that works in the best interests of the members. The union movement is interested in perpetuating the personal benefits it can bestow on itself, quite clearly. Otherwise, we would have good penalties and some real teeth in this legislation: it would put sufficient sanctions in place to ensure officials appointed to union positions, who have under their charge large amounts of union funds, act in the interests of the thousands of members right around the country. It would have penalties that would be a serious deterrent, not mere slaps on the wrist as in this legislation.

This bill encapsulates so much of what is wrong with the modern Labor Party: a failure to really deal with the union movement to ensure that it is acting in the best interests not only of the members themselves but of the Australian people generally. We need to have much stronger sanctions. The coalition in government will right this problem if our amendments are not passed in this place now. Upon coming to government we will ensure that union members are as accountable as company directors. We will ensure that legislation will be in place to give union members the assurance that their money is being spent wisely, which the Australian Labor Party is not giving them. No wonder Australian workers are deserting the Labor Party. They are deserting the Labor Party because they know that the Labor Party are looking after themselves, not looking after their interests.

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

I start with an explanation: the Fair Work (Registered Organisations) Amendment Bill 2012 before the House and the amendments we will move are not anti union. It is not about shackling unions to the extent that it would affect their ability to effectively represent their members. I fully acknowledge that from the Harvester award of 1907 to the election of the first female president of the ACTU in 1995, the union movement has had, and it continues to have, a significant impact on Australia's way of life. While we may disagree with the union movement on their methods and their aims, the Liberal Party from Menzies to Howard has always recognised the role unions play and the right they have to play that role. In the words of John Howard: 'We're anti-union control. We're anti-union domination. We're anti the unions having a monopoly role in the workplace, but,' 'We are not anti-union'. But this bill and the amendments the coalition seek are about lifting the standards of transparency and accountability of registered organisations, of which unions are one. It is about ensuring we do not have a repeat of the scandals of the Health Services Union, where 70,000 of the lowest paid, hardest working employees from the HSU had more than $500,000 of their money misused—misused on expensive dinners, misused on holidays, misused on escorts, misused on political campaigns and political staffers, misused to the point that this money will never be seen again.

Not to mention that HSU East made millions of dollars of expenditure without necessary controls or competition. The Temby report has detailed that over four years $2.4 million was spent on the HSU credit card without sufficient guidelines and documentation, and a whopping $17 million of contracts were entered into without a proper tender process. As documented by the shadow minister for employment and workplace relations, Senator Abetz, there was: $5 million to Access Focus for what is believed to be consultancies and memorabilia; $4.9 million over three years to United Edge believed to be for IT services; and $3.4 million to Communigraphix over four years, believed to be for the union journal. And the list goes on, with the concerning revelation that some of the companies benefitting from these contracts were linked to Michael Williamson, the former President of the Australian Labor Party,

This is why we are here. This is why the coalition is taking the initiative in putting forward these amendments, to ensure that registered organisations such as unions are submitted to the same level of accountability and transparency as companies and their directors are under the Corporations Act. Under the current law, trade unions as registered organisations are subject to obligations under the Fair Work (Registered Organisations) Act 2009. These 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.

But the penalties for the breach of these obligations are either minor and insufficient. 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 only up to $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 or imprisonment for up to five years. These are serious penalties for serious crimes and this is what the coalition is seeking to achieve by moving these amendments.

What is more, the coalition believes we can no longer leave it to Fair Work Australia to police and enforce these obligations. The HSU scandal has shone a light on the deficiencies of Fair Work Australia. To take more than three years to investigate the allegations around Craig Thomson and then produce a document which is not even in the required format for the Director of Public Prosecutions is completely unacceptable. It is unacceptable to the coalition and unacceptable to the Australian people. The institutional go-slow and the incompetency displayed seriously undermined any possibility of an expeditious, effective and professional handling of the HSU matter.

What we need now is a new body, which the coalition proposes calling the Registered Organisations Commission, which will police and enforce these new compliance obligations rather than leaving it to the general manager. This new commission will take responsibility for educating members of registered organisations about their rights and acting as a repository of complaints from its members. The coalition understands that one has to separate Fair Work Australia from its day-to-day role solving disputes and making agreements, from its watchdog role ensuring proper accountability and transparency. In the words of Peter Anderson, the Australian Chamber of Commerce and Industry head:

We need to separate some of these roles so that the arbitral side, the decision making side that affects employers and affects industry is quite distinct from the traditional role that scrutinises unions and employers organisations.

How right he is.

The problem with the government's bill is that it does not go far enough. Do not take my word for it: Labor's member for Barton and the former Attorney-General in the Rudd government, Robert McClelland, said as much in his speech to the parliament last week. And if you do not want to take his word for it, read the speech of the National Secretary of the Health Services Union, Kathy Jackson, to the HR Nicholls Society just a few weeks ago, where she made a similar point, saying:

... I believe that there is a very strong case for extending, to the full extent possible and applicable, the same governance, investigation and enforcement provisions that apply to other corporations, generally those registered under the Corporations Act, to unions.

You see, the government's bill is a timid reaction to the loud public outrage and it is an inadequate response to the coalition's lead on the issue. Just look at the details. Under the government's bill the rules are still weak, the penalties are still weak and Fair Work Australia is still left to police these registered organisations, despite its failed record. Under the government's bill there is no real attempt to apply the standards of the Corporations Act to those of registered organisations. Under the government's bill there is no specific permission for Fair Work Australia to prepare a brief of evidence. Under the government's bill there is no requirement for Fair Work Australia to report to the parliament and explain why an investigation has taken longer than a year. Under the government's bill that ere is no specific provision making it clear that Fair Work Australia can cooperate with police at the start, during and at the end of the investigation. These are all deficiencies in the government's legislation which will be rectified by the coalition's amendments.

We have to understand that, despite the falling membership of unions, representing as they do only around 13 per cent of the private sector workforce and around 18 per cent of the overall workforce, unions are still big businesses. Unions are big businesses and their financials reflect as much. In an important report released by the Institute of Public Affairs, entitled Australian trade unions: an alternate regulatory approach, Olivia Graham and the irrepressible John Lloyd gave us a snapshot of some these financials. For example, in 2010 the CFMEU's construction and general branch in the Victorian division held net assets worth $42 million, including $4.5 million worth of investment properties and $25 million worth of property, plant and equipment. In 2011 the Victorian branch of the Australian Nursing Federation held $21,768 million in net assets and earned just over $6 million in net revenue. These are just some of the individual state based divisions. When one accumulates the net assets of the total union movement, it is easy to understand how unions can put together tens of millions of dollars every election for their brothers in the Labor Party. Given these large numbers, it is absolutely critical that the standards of financial transparency and accountability within the union movement are lifted.

In conclusion, we cannot afford to have another repeat of the HSU scandal. The Australian public will not stand for it, union members will not stand for it and the coalition will not stand for it. The coalition's amendments put before the House are a step forward They will enhance transparency, they will strengthen accountability and they will ensure that unions, which are big business, are subject to the same analysis, the same accountability, the same standards and the same transparency as are corporations and their directors. I recommend the amendments to the House.

Alex Hawke (Mitchell, Liberal Party) Share this | Link to this | Hansard source

I rise also to speak on the amendments to the Fair Work (Registered Organisations) Amendment Bill 2012. Once again in the chamber we find ourselves at an interesting juncture in the politics of our nation. In the past few weeks in the parliament, we have seen lateral transfers for defence families moved by the opposition and adopted by the government; and the victims of terrorism bill, a private member's bill of the Leader of the Opposition, adopted by the government. Here, 10 days ago, we saw the Leader of the Opposition announce the coalition's better plan for accountability and transparency for registered organisations and, 10 days later, we have a bill introduced by the Minister for Education, Employment and Workplace Relations, Mr Shorten, to address just that matter. It appears that the opposition is governing with its ideas and programs. Once again we see a bill in response to something. In the act-react cycle, we seem to act and the government reacts, rather than doing what it is elected to do—that is, to address the very serious problems that we have seen with the Health Services Union and unions more broadly in Australia today.

Given that we apply such stringent rules to corporations in the Corporations Act, it is not unfair in the light of the stunning and explosive revenue elations made by Fair Work Australia in their report into the Health Services Union that we look at legislation to improve the transparency and quality of registered organisations including unions. That is exactly what the Leader of the Opposition proposed in the coalition's plan for better accountability and transparency for registered organisations. In this bill, we see the provisions lacking in a number of ways, and that is attempting to address a problem when you are not really addressing a problem. That is why we have proposed some very serious amendments. I am going to outline some of those shortly.

We believe, however, that the coalition has a better plan to make sure that the money of the members of these very serious organisations—which are now responsible for large amounts of money and investments and responsible for the lives of so many poor and other people at the bottom end of the scale—is spent responsibly and properly. We require the same thing from corporations and boards of directors. In the same way, when we see a Lehman Brothers style collapse, we say: 'That is terrible. Those people mismanaged their risk and their money, and those people should be dealt with.' In the same way, as the Health Services Union has, explosively, revealed serious problems and fraud, we ought to now apply the rule of law. That is why in our amendment we are bringing penalties in line with the Corporations Act, and seeking to bring across to the registered organisations act section 184 of the Corporations Act, which would make it a criminal offence for bosses of registered organisations to not act in good faith, to use their position dishonestly or to be reckless. I do not understand how that could be opposed by the government considering that is what governing is all about.

Applying the rule of law means extending the power we apply from government to negate behaviour, and the main mechanism with which we can negate this style of behaviour is the law. The Corporations Act into the Fair Work (Registered Organisations) Act's section 184 would provide for that, thereby negating these acts of people in registered organisations. It is an appropriate and a fair way of addressing this matter.

Further, with regard to the government's increases to the civil penalties proposed in this bill, we are seeking to further increase those penalties in line with the Corporations Act. In this modern approach to dealing with registered organisations and unions, given the seriousness of the role that they occupy in today's society, it is appropriate that the penalties mirror those in the Corporations Act that apply to boards of directors and other office bearers in corporations. That does not appear to be controversial, but the fact that it is missing from this legislation is a big gap in the government's approach.

Other issues that we have with this bill include the fact that Fair Work Australia is still in control. The approach that Fair Work Australia has taken in recent times in these investigations highlights the need for legislation to improve the situation in how Fair Work Australia addresses matters. We feel that putting Fair Work Australia in charge without considerable increases in its ability or the provision that we would make on it from this place is a weak approach. We want Fair Work Australia to have the ability to make sure its investigations are done properly. We saw three years of failure to cooperate with police, for example, with Fair Work Australia claiming it could not produce a brief of evidence. From our amendments, and from what is missing in the government's legislation, how we can take this bill seriously when it is not proposing to give specific permission for Fair Work Australia to prepare a brief of evidence, given that this was one of the main criticisms of the approach that Fair Work Australia has taken? So in our amendments we are seeking to give Fair Work Australia the appropriate requirements to make sure it cooperates with police and that it can produce a brief of evidence.

We also want to make sure this parliament has a mechanism, if Fair Work Australia is not delivering on its obligations to investigate in a timely fashion, to prevent us from seeing a repeat of the situation where Fair Work Australia could take as long as it likes and be open to the perception or the accusation, which it was, that there was political interference. Whether there was or not is not my place to say, but the accusation and the perception could be made about Fair Work Australia because the parliament has no mechanism to ensure that it is acting in a timely fashion. Having reports to parliament at the year mark, and then every six months after that, as to how an investigation is going and what the expected progress will be would provide accountability and transparency into the future.

Once again, this is not subjective or targeted at anybody, and there is nothing for the government to really object to except proper transparency and accountability. That is what we are providing for with our amendments. I do not understand, and I would love to hear the government argue, why it would not be appropriate in future investigations to ensure that Fair Work Australia's investigations are held to a high standard and perceived to be at a high standard, and that at least confidence can be held in the operation of Fair Work Australia.

As I discussed, we propose increasing penalties for misusing members' funds, and the stories that we have seen out of the Health Services Union have shattered public confidence in that union, particularly for those very hardworking people in the health sector who do such a great job and who decide to contribute by joining a union. It may surprise the government and others to know that I am not against people joining unions. I think, inherently, a person's right to join a union and collaborate with others to collectively bargain to improve their conditions in the workforce is an appropriate use of their time and an appropriate choice for a person to make.

In a free society, trade unions would operate effectively on behalf of their members. I think, though, it is an inherent mistake made by unions that they are affiliated with one political party in Australia—I put that right out there. That mix of politics and unionism in Australia has led to a situation where every member of the Labor Party in this place is a trade union official, where vast sums of members' money from lowly paid workers end up in a political party's coffers, and where the Health Services Union is mixed up at the centre of a national political scandal. In a way, that is unedifying not only for the parliament but also for unions, workers and trade unionists. There is no accident in all of that; a series of mistakes have been made.

This bill could go much further in what it is doing to make sure that this situation is rectified in some way. I do not believe we can take the government seriously with this bill when we consider that the Minister for Climate Change and Energy Efficiency was the head of the ACTU and the minister responsible for this bill, the Minister for Employment and Workplace Relations, was in the ACTU at a similar time as many people who have been caught up in this problem. There are too many of these issues going around, and while there is nothing specific that we would level at anybody here, these amendments are designed to give strength, purpose and meaning to a real agenda to make registered organisations transparent and accountable. It is an appropriate and important use of this parliament's power and privilege to make sure that we do so when given the opportunity.

We have seen, given the scandal that has surrounded the Health Services Union—whose report is 12,000 pages, 900 of which deal with the former secretary of the Health Services Union—that there is real cause for concern about penalties. The coalition's amendment, particularly in relation to the disclosure of information to police, is something that ought to be supported by everybody here to make sure that in future, where there are allegations of serious misconduct, people have to cooperate with police and disclose information, and that people and officers at Fair Work Australia can cooperate fully with police at all stages of an investigation.

It is important that we clarify the position, that we ensure that we signal to Fair Work Australia that, like every other citizen, corporation or entity in Australia, we ask of them that they cooperate with law enforcement agencies. We do not want any obstacles in the way of that cooperation, and if there are any obstacles from this parliament we want to ensure, through an amendment, that they are removed so that every officer of Fair Work Australia can then cooperate.

We find with many of these amendments before us that are proposed by the coalition that they would provide a very fair platform for the operation of registered organisations to ensure a minimising of criminal activity and other incorrect conduct, to put it politely. That this bill is designed by a former union boss to regulate other union bosses is a valid criticism and many members have made that comment in this place. I do not think it is appropriate that former union bosses design the rules for the next generation of union bosses. That is the flaw in this legislation. They may think this is something that will address the situation, but, when you go through it and look at how this bill came about—literally, the Leader of the Opposition proposed the coalition's plan, Minister Shorten came to this parliament and announced this legislation and now, here we are, debating it a short time later—it highlights that, really, this is a reaction rather than an action.

The government did not choose to act, despite how long this Fair Work Australia investigation has been going, how long the report has been in the public domain and how serious it is in nature. The government did not say, 'This is quite serious. We really want to act on this. We'd prefer to do something. We're not going to let the opposition get a jump on us. We're not going to let them propose what to do and then react to it. We're going to propose some pretty serious measures and ensure that this does not happen again.' That way, everyone would be better off. The parliament, the union movement and registered organisations in Australia would improve in quality and be more transparent.

I think we have seen the government's agenda exposed a little. That is what is important to realise here. I guess the government's agenda is not so much about fixing this problem; it is about being perceived to be doing something about it. There is a very big distinction here, because the coalition's amendment underscores, line by line, issue by issue, that if you were serious you would be much tougher. If you were serious you would give force to what you are saying. If you were serious, provision by provision, you would have much more detail and there would be many more actual powers to ensure that Fair Work Australia had to cooperate with the police and had the power to provide a brief of evidence, ensure that, if reports were taking too long, there was a mechanism for the parliament to address them and ensure, of course, that penalties applied—that the main force and power we can give to legislation, the power to penalise, was the same as in the Corporations Act and was there to be used when this sort of situation came up.

While we do not oppose the bill itself, we have proposed these amendments. They are serious, measured amendments. They are not unfair to anybody. They are to give effect to what should be a bill to improve transparency in registered organisations in Australia to ensure that this situation does not arise again without any real recourse in law to address it effectively and quickly, where Fair Work Australia took so long to do so little about something so serious. That is why we need better legislation.

The coalition are proud to have flagged our plan for the government, and we are happy to see the government react. If they do not have the ideas, we are happy to see them react our ideas. But, when you have that reaction, I think you also have to look at the people who originated the transparency and accountability plan and listen to us very carefully about the serious strengthening amendments that we are proposing to ensure that this legislation can work effectively.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

I applaud some of the remarks that the previous speaker made. His endorsement might be in a fair bit of trouble as a result of some of the remarks he made, but I applaud him for them. However, he started talking about unionists having a responsibility to speak up and the fact that the amendments being moved by the Liberal Party will overcome that problem. We have the situation with the building workers union where there is a right to silence enjoyed by everyone everywhere in the world. I do not know of any jurisdictions, outside of one-party government countries, where you have no right to silence. I will not go into all the arguments about why you should have a right to silence; suffice it to say that every country in the world provides that right to silence.

I have not seen the amendments—I could be critical and say that I did not get the courtesy of receiving the amendments—so, not having seen them, all I can do is comment upon what the previous two speakers said. In the building workers union, if the police ask you a question and you refuse to answer it, they can jail you and jail you pretty well indefinitely at their discretion. We are on very dangerous ground when fundamental freedoms are taken off people. I do not want to go into all the issues around that building workers legislation. It was only under threat from the crossbenchers that the ALP moved to remove what were abominable discretionary powers that were given to these various authorities. There had not been a single problem in almost the last seven years and there was no justification. There may be justification for some oppressive legislation in the short term to fix a short-term problem, but I would think that you would never introduce that type of legislation without a sunset clause upon it. I find it very hard to envisage a situation where fundamental freedoms and rights are taken away to overcome a temporary problem that has arisen, however bad that problem might be.

Let me turn from generalities to the bill before the House, which is aimed at increasing the responsibilities upon trade union officials in the area of accountability. The unions have all agreed to it, but I suspect that a number of them have agreed to it because they are too scared to say they do not agree to it, because someone might start looking at them and thinking that they have something to hide.

I came into this place out of a terrible baptism, which was the Fitzgerald inquiry in Queensland, where we had some people at the heart of police corruption. I say with very great pride that we had the courage, with our eyes open, knowing the great dangers that we took, to try to go after that centre of corruption in the police force. Most certainly it was not Terry Lewis but, on the evidence, it would appear that he was playing a part in protecting these people.

In doing that, we unleashed a monster. Monsters have been unleashed with the Salem witch burnings and the McCarthy hearings in the United States. We can find a hundred examples: the Spanish Inquisition; the burning of books in Nazi Germany; Oliver Cromwell's regime in England. There are many examples of the psychological phenomenon of witch burning. We most certainly suffered that in Queensland, and it made me very conscious of the enormous injustices that are perpetrated—in a lot of cases, upon public officials such as politicians. The leading case is Brian Austin, a minister in Queensland who was effectively the first one to go to jail. Let everyone in this place listen to this with some fear and trembling. He was jailed because he took his government car to visit his kids who were at boarding school in Armidale. He spent three years in a cage, like an animal, because he did that.

Madam Acting Deputy Speaker Owens, you would be aware that almost every government official in Australia—and I do not just mean politicians—has a government motor car which will be used for private purposes today. Whether it is picking up the kids from school or picking up a loaf of bread on the way home, it falls within that definition. But when the old witch-hunt occurs watch out, because there is no such thing as justice here. I am just worried that the government may have acted somewhat excessively in this area—and I most certainly would not be cheering the opposition on in their attacks here.

Turning to the issue of collective bargaining in Australia, I had the very great honour of addressing two of the trade unions' annual general meetings. I think at least one of them knew of my book on the history of Australia from 1890 to 1910. In that book was a very fine tribute to trade unionism in this country. We had a situation a hundred years ago in which one in 31 of us who went down the mines never came back up again. They died a terrible death from miner's phthisis or, worse still, in many cases they were buried alive. And this was not confined to mining. Of the 2,000 men who worked digging the sewerage ditches in Sydney—they were working down eight or nine feet deep and there was no circulation of air—every single one who worked there for more than two years died of miner's phthisis.

And if you are looking for the reasons for the formation of the Labor Party in Australia, look no further than miner's phthisis. The first Labor head of government elected anywhere in the world was in Queensland—Anderson Dawson, from my own family's hometown of Charters Towers. We were in Charters Towers before there was a Charters Towers. Anderson Dawson was the member of parliament for Charters Towers and the first Labor premier elected anywhere in the world. He left parliament because he had contracted lung disease, miner's phthisis, whilst he was mining. Andrew Fisher, the second Labor Prime Minister of this country, also had to leave politics on account of miner's phthisis, and his father also died from miner's phthisis.

The black people who were employed in the mines in South Africa, even though they were very poorly treated, had legislation protecting them from miner's phthisis—damping-down legislation. When they were using machine drills, which came in the 1890s, they needed damping-down legislation. It was given by the white people of South Africa to protect the black people who worked down in the mines. In Wales the miners were treated even worse. They had a steel collar welded around their neck with a number on it and they were not allowed to leave their place of work, by law. They were very much in a slave-like activity. Ken Follett wrote a very good novel based upon the situation in Wales.

Even though those people were treated like dogs and slaves, they still had protection for damping down. But in this country we did not. We had to form a union. One of the leaders of that very great union, the AWU, is in here today—and very proudly, I would think. The union was formed to combat and overcome, mainly by Ted Theodore when he went down the mine for the second time in his life and saw his mates die. That was his fork in the road to Damascus. He formed a union and he took over the running of Queensland within seven years. The people were so grateful for what he did for them—and I pay tribute to trade unionism in this. It was not just what that great union leader did for the workers and the employees. He took the land off the landed gentry, who to a large degree were foreign corporations, and redistributed it to Queenslanders.

Probably half of the landowners in Queensland today, if they trace it back, got their original land from the redistribution policies of the Theodore government. They gave us the land so that we Australians could make a quid. And our farmers were given statutory marketing arrangements. Our dairy farmers were not told what they would be paid. They said, 'You'll pay us this amount of money via an arbitrated price'—and similarly with the workers.When the dairy farmers lost that arbitrated price their price went from 59c a litre the day before deregulation to 42c a litre the day after. Every member of this place should reflect upon the fact that they belong to a political party that participated in what the very famous dean of the Faculty of Economics at the University of Queensland, the most distinguished of Australia's economics faculties, Ted Colson, said in addressing a meeting. He said the three great shames of this nation were the way that we treated the men who came home from Vietnam, the way we treated the first Australians and what we did to the dairy farmers of Australia through deregulation.

Without the trade union movement we would live in a deregulated marketplace. It is easy for the speaker before last to get up and say that the unions should not give money to the ALP. If they had not, we would have a deregulated labour market in this country. To the eternal shame of the Liberal Party in Queensland, the Premier of Queensland stood up two weeks before the election and said that there will be no fly-in miners from overseas. No, what he said was, 'I'm not in favour of fly-in mining from overseas.' That was two weeks before the election. Five weeks after the election he stood up and said, 'There will be fly-in mining from overseas in Queensland.' It was a very different party before the election and after the election.

But to see a Labor government here in Canberra give the green light to flying in foreign workers from overseas! Madam Deputy Speaker, your predecessor, Mr Slipper, removed a picture of Charlie McDonald, the first member for Kennedy and my predecessor. Every speech Charlie gave in this House in his early years in the parliament was against bringing in foreign workers from overseas to undermine pay rates, to undermine safety conditions, to work for nothing and to take jobs that should have come to the local worker.

That is the contribution being made by the trade union movement. Some of them have had the courage to speak out against flying in foreign workers. In Queensland 299,000 people are registered for full-time employment but cannot get a job, with 200,000 of those unable to get a job at all. And there is Gina Rinehart telling us that she has to fly in workers from overseas. As for the assurances provided to us by the federal government, they are not worth the paper they are written on. They should be ashamed of themselves for insulting the trade union movement of Australia with such absolute rubbish like, 'We'll make sure that there is no Australian available for that position.' There would not be a member in this place that has not driven a truck around the provisions of section 457. I most certainly have. So, if you can drive around section 457, you will most certainly be able to drive it around this— (Time expired)

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

I rise to speak on the Fair Work (Registered Organisations) Amendment Bill 2012. This bill will amend the Fair Work (Registered Organisations) Act 2009 to increase the financial and accountability obligations of registered organisations and their office holders, strengthen the investigative powers of Fair Work Australia and enhance remedies under the registered organisations act.

Let me start by highlighting that the need for greater oversight of registered organisations has come from Fair Work Australia itself. In its statement regarding investigations into the HSU, Fair Work Australia said of the Health Services Union:

The investigation reveals an organisation that abjectly failed to have adequate governance arrangements in place to protect union members' funds against misuse. Substantial funds were, in my view, spent inappropriately including on escort services, spousal travel, and excessive travel and hospitality expenditure.

These revelations are a clear indicator that there is an urgent need to ensure that money paid by members to registered organisations is used for proper purposes. The 1,200-page report, to the disgust of the people of Australia, detailed the financial misuse and inappropriate manner in which the hard-earned money of Health Services Union members was spent by senior union officials. It is an absolute shame that an organisation that has purported for many years to represent hardworking Australians and their rights has now been exposed as having zero regard and respect for those workers.

In saying that, I do associate my comments with those of previous members who have highlighted that there are unions that do an outstanding job. In the workplace there are organisations that do represent their members and provide value. I was always of the opinion that unions could have done much more, in particular, in building the Bowen Basin and now the Galilee Basin. Unions could have done a lot more in providing far better value for their members. But that is a debate for another day.

The revelations that union members' money was spent by union officials on escort agencies, travel, restaurants and huge cash withdrawals are a disgrace to say the least. It clearly demonstrates that there is an urgent need to ensure that money paid by members to registered organisations is used responsibly, appropriately and in a transparent way.

Today's bill will amend the Fair Work (Registered Organisations) Act 2009, which sets out the statutory obligations and privileges for so-called registered organisations. These include both federally registrable employee associations—trade unions—and federally registrable employer associations, which includes employer associations and industry associations. The task of administering obligations and responsibilities imposed on registered organisations currently belongs to the General Manager of Fair Work Australia. Such obligations include ensuring that financial statements and associated reporting requirements are met. Powers include the ability to conduct inquiries, investigate registered organisations and pursue allegations of breaches.

This bill seems little more than a hasty attempt by those opposite to give the appearance that they are making an effort to resolve the many issues plaguing the oversight of registered organisations. The reality is that this bill falls well short of doing what is necessary and we in the coalition have a number of real concerns about it. The rules and requirements as a result of the changes are still significantly weaker than those expected of company directors.

I bring the House's attention to company directors. When one hears that term one automatically thinks of the corporate top end of town—the Monopoly type of corporate director. That is not necessarily the case. The company directors in my electorate are the local mechanic and the local butcher. They may be someone who has a combined household income of around $100,000 per annum and the advice that they have received from the Taxation Office is to set up a company structure for taxation benefits, rather than give $50,000 to the husband and $50,000 to the wife as is often the case. I implore the House: when you hear the term company director do not think of the Reserve Bank, do not think of those directors of the board of multinational companies; send your thoughts to the local mechanic, the local butcher and the local businessman, because they are the people in my electorate who will ultimately be affected.

The rules and requirements as a result of the changes are still significantly weaker than those expected of a company director. While the penalties are in line with other civil penalties in the Fair Work Act, they still fall considerably short of those required under the Corporations Act. Here we have a situation where we have one set of rules under the Corporations Act for our company directors and another set of rules for our union mates. It is a juxtaposition. Why are we in this position, having this discussion? Why is this bill before the House? It was only last week in the Federation Chamber that I put up a private member's motion which sought to implement a plan that would exact the same standards of accountability and transparency from union leaders as is expected of company directors under the Corporations Act. You should have seen the Labor members of this House with union links that got up and said, 'We don't need any more transparency; we oppose the private member's motion that you put up.' There was a member who supported my motion because he was actually there and listened to it. The other members that came in were automatically opposed.

I put the private member's motion up because the unions were calling for it. The unions themselves, through the papers and their organisations, were calling for it—because there is a stench around the union movement at the moment with reference to transparency and accountability. Take, for example, the comment of the Secretary of the Australian Council of Trade Unions, David Oliver. He said:

… every union member in this country has a right to know that … their money is going to be subject to good governance and good regulation.

The National Secretary of the Australian Workers Union, Paul Howes, has said that he supports bringing unions' accountability and transparency in line with the Corporations Act. Here we have two predominant unions saying that they support stronger transparency in the organisations. Furthermore, in his opening address for 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.

The recent Fair Work Australia report leaves those comments in question.

The bill, while expanding police cooperation powers, does not make it expressly clear that Fair Work Australia can cooperate with police. Given the track record of Fair Work Australia it is important that this is made absolutely clear. I ask the minister, when making his final comments, to clarify that point. In addition to clarifying their responsibilities to police, I would also like to have some further conversation on the brief of evidence from Fair Work Australia and its transition to the next progressive path in the event of untoward activities. Furthermore, there is express provision to allow Fair Work Australia to provide a brief of evidence to the Director of Public Prosecutions. Again, given previous problems with this, it is important to include express powers to enable this to happen. It should be noted that these provisions are frankly unnecessary but need to be supported given the circumstances.

As my colleague here in the chamber, the member for Ryan, recently asked: why has this bill come about? She asked that question in a previous speech. Why does the political wing of the union movement all of a sudden feel a stronger stance against corruption and misappropriation must be taken? Is it because it is the right and honest thing to do? Is it a proactive step to stamp out cynicism within the union movement? Is it to finally put unions on the level legislative playing field that their corporate equivalents are on and impose the same kind of punishments for infringements when the only difference is where the money is coming from? No, it is not. The government lacks the moral fortitude to do something like that. It is simply because they were shamed and embarrassed into some reaction by the scandals and disgraces of the Health Services Union that have plagued this government. It is because they have been shamed by the strong leadership demonstrated by Tony Abbott on the issue and the strong stance that he is taking in bringing this situation to the fore.

The coalition is proposing eight amendments to improve the design of the bill and outcomes for workers. Most importantly we will create a new organisation to oversee the registered organisations. We suggest that setting up the organisation, as noted in the amendment, should be supported by the government. It is absolutely consistent with the government's position on the safe roads legislation; they appropriated $15 million to set up a tribunal to oversee so-called road fatalities and employment contracts in the transport workers' sector. So what we are asking for in our amendment has a precedent, and we would suggest that this government will and should support the amendments attached here.

The coalition will seek to remove the responsibility of the General Manager of Fair Work Australia to ensure compliance and shift to a new, separate and independent body which will be called the Registered Organisations Commission. This commission will fall under the auspices of the office of the Fair Work Ombudsman. It will be able to use the Fair Work Ombudsman's network and resources where appropriate and will ultimately report and be answerable to the parliament. The coalition's amendments include provision that, should a report be delayed, the commission must report to the parliament and inform the parliament of why there is a delay. The time that Fair Work Australia took to process recent investigations was nothing less than shambolic. We must implement changes in legislation to shift away from a place where situations like that can ever be repeated in this country.

The commission will also be responsible for educating registered organisations about the new obligations, and will be able to receive complaints from members and provide information about what they can do if there is a problem or a complaint. Just as there is a specific rule which applies to companies and board directors to ensure that they are doing the right thing, that rule should apply to registered organisations and their officers. So the coalition will move amendments to ensure that the penalties are the same as those applying to company directors and ensure that the Registered Organisations Commission has powers broadly in line with those provided to the Australian Securities and Investments Commission.

When we come into this House we often get bashed up about saying, 'No, no, no.' The reality is: 80 per cent of the legislation that goes through this place is unopposed.

Alan Tudge (Aston, Liberal Party) Share this | Link to this | Hansard source

It's 87 per cent, isn't it?

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

I have just been corrected by the member for Aston; 87 per cent of the legislation that goes through here is unopposed. We do support good legislation, but we will be the first to oppose bad legislation. One key amendment will seek to bring across section 184 of the Corporations Act into the registered organisations act. This would make it a criminal offence for bosses of registered organisations to not act in good faith, to use their position dishonestly or to be reckless. The coalition's amendment will seek to further increase penalties, in line with the Corporations Act. Believe it or not, the penalties for comparable offences by the officials in registered organisations are almost nonexistent. Similar obligations under sections 287 and 288 of the Fair Work (Registered Organisations) Act 2009 as to using information for personal advantage or causing detriment to an organisation are limited to civil penalties of $2,200 for an individual, and there are no criminal provisions.

In conclusion, I believe that this is a poor bill that will not deal with the substantive issues born out of Fair Work Australia's investigations. It goes without saying that the seemingly never-ending saga of Fair Work Australia's investigations into the Health Services Union has made it absolutely clear that major reform in this area is needed. However, I believe that the reform is needed in the management rather than the legislation. The assessment of the former Attorney-General, the Hon. Robert McClelland MP, in the submission by the Institute of Public Relations noting that there are areas of the bill that can be strengthened, is highly accurate. He commented:

The bill is a step in the right direction. However, its reforms are modest and do not go far enough.

Finally, without doubt this bill and the proposed coalition amendments are a sure method that will provide greater protection to Australians in the workplace. For too long, unions have escaped proper scrutiny and finally this has exploded with the investigation of the Health Services Union and the protracted investigation by Fair Work Australia. I commend this bill, and I commend the amendments— (Time expired)

Alan Tudge (Aston, Liberal Party) Share this | Link to this | Hansard source

There are only two reasons that we are here debating the bill in front of us, the Fair Work (Registered Organisations) Amendment Bill 2012. The first is the sheer stench surrounding the Craig Thomson affair. Such is the stench that it has embarrassed the government into taking some action against some of their mates in the trade union movement through this bill. More importantly, it is that the opposition put out a plan to actually tackle the problem with unregulated unions just 10 days before—the coalition's plan for better transparency and accountability of registered organisations. That is the real reason that we are here discussing this bill today: we put forward a proactive proposal to deal with some of the issues which were raised throughout the Craig Thomson affair, and Labor is now rapidly trying to catch up. They are putting this bill forward so that they can pretend that they are also taking some action.

But it is a good thing that we are taking some action, and it is a good thing that we are debating trade unions and how they are regulated, their transparency and the amount of protection which is provided them in legislation. Frankly, at the moment, there is insufficient protection for union members, there is insufficient transparency and there are insufficient penalties applying to people who have breached the legislation. And the 1,200-page report of Fair Work Australia made this point very, very clearly—it found dozens upon dozens of examples of breaches of the law by the Health Services Union. Nearly every Australian would now be aware of some of these breaches, where thousands of dollars—indeed, hundreds of thousands of dollars—was misappropriated by union officials within the Health Services Union, for cash advances, for exorbitant travel, for fine dining for the union leaders and, of course, for escort services. In addition to this, almost $300,000 was appropriated by the Health Services Union for the election campaign of the now member for Dobell who, at the time, was the leader of the Health Services Union.

It was very clear from that 1,200-page report that the regulations and transparency were not sufficient to capture some of those issues. Is this the only union where these practices are going on? We simply do not know. We do know that, for example, in the construction union, all sorts of unlawfulness was discovered by the Cole royal commission—it found over 100 breaches of the law, on building and construction sites, by the building and construction trade union. So clearly there is a case that the regulations which govern trade unions are insufficient. There is clearly a case that that is happening. We actually have bipartisan agreements that the current laws are insufficient. I am pleased to see Minister Combet here because he also agrees with this proposition that the existing laws are insufficient to properly regulate and provide protections for trade union members today. Where we do disagree, though, is on the plan put forward to tackle this issue. We believe that this bill the minister has put forward goes some of the way but not far enough and fails to deal with all of the issues which are uncovered and documented in the 1,200-page Fair Work Australia report.

There are four key problems with this bill, which we believe need to be amended. Indeed, the coalition is putting forward amendments to deal with them. The first is that the bill before us still sees Fair Work Australia in control of investigating registered organisations. We simply believe that they are not up to the job to do that. We think that they have insufficient time and insufficient focus to do that. This was evidenced by the Fair Work Australia report into the Health Services Union. It took over three years to do the investigation. The report should have taken much less time than that. Furthermore, at the end of that 3½ years it was still not in a sufficient state for the police, the department or the Director of Public Prosecutions to be able to use it to action some of the egregious breaches which were outlined in that report.

So Fair Work Australia is not the right body to properly regulate and scrutinise registered organisations. We believe there should be a separate independent expert body which does that. Consequently, we are putting forward an amendment which would suggest that a registered organisations commission be established which would oversee registered organisations and would have the teeth to be able to properly scrutinise them and properly see that trade unions are being held accountable to their membership.

The second problem is that the bill does not expressly provide for Fair Work Australia the ability to cooperate with the police. Given the track record of Fair Work Australia, it is important that this be made absolutely clear in the bill. It must be made clear that Fair Work Australia must, in the appropriate circumstances, provide a brief of evidence to the Director of Public Prosecutions, if required. This should not be required, of course, in ordinary circumstances. In ordinary circumstances you would think that Fair Work Australia itself would actually go about doing the right thing and developing that brief of evidence to go to the Director of Public Prosecutions. But, again, the case of the Health Services Union proves that we in fact do need to make this part of legislation, because they spent 3½ years investigating this case and yet still did not provide the proper brief of evidence to the Director of Public Prosecutions. Furthermore, they did not cooperate with the police throughout that 3½ years of the investigation, despite the predecessor body to Fair Work Australia expressly recommending the day before Fair Work Australia was established that it should in fact put the Craig Thomson affair to the police. But they did not. We think that is disgraceful. We therefore think that there needs to be separate legislation to properly specify this in the relevant legislation which governs trade unions.

Third, the requirements and the penalties in this bill are still not in line with the Corporations Act. We think there should be a simple principle enacted in this legislation. That simple principle is that what is good for corporations is good for trade unions. In relation to penalties, for example, if the actions which were taken by the Health Services Union officials in the Craig Thomson affair occurred inside a company then individual directors may have been criminally liable for some of those things, may have had a $200,000 personal fine and could have landed in jail for up to five years. That is what occurs in the Corporations Act with the sort of egregious behaviour that we saw inside the Health Services Union. But underneath the Fair Work Australia act the penalty is up to $2,200. So you can appropriate hundreds of thousands of dollars and you can spend union members' money on prostitutes, on cash withdrawals or on your re-election campaign and the penalty is $2,200. And it is a civil penalty only.

We should be listening to Mr McClelland, the former Attorney-General, as well, who suggests that actually, if people are found guilty of such an offence, not only should they suffer greater penalties in line with the Corporations Act but also they should have to repay that money—because it is often the money of the lowest paid workers in the country that we are talking about which the trade union leaders are misappropriating for their own purposes. We do not think that is good enough. Consequently, we are putting forward amendments to bring the penalties in line with the Corporations Act.

This also goes to the issue of transparency and basic fiduciary obligations. Everybody knows that if you are a company director or a company executive you have to outline exactly where the money is being spent by a company. Executive remuneration is transparent and other measures are transparently laid out in relation to the company's accounts. We also know that company directors have to operate under fiduciary obligations. That is, they have legal obligations to act in the best interests of their company shareholders. Again, we think the trade union leaders should equally have to follow those basic guidelines. We will, again, move amendments to ensure this.

My final criticism is that the bill before us has no reporting mechanism on why investigations are going over time. It should not, frankly, have to take almost four years for an investigation to occur, with no explanation as to why it is taking almost four years. An egregious abuse of members' money should not have to take four years to investigate. It should only be a relatively short process. It should be done expediently and, if there are delays in the investigation, there should be a public statement as to why there are such delays. That, again, is a measure which we are putting forward.

In conclusion, this bill gives the perception, the pretence, that the government are concerned about corrupt practices inside trade unions, but it is just that—a pretence. They are not fair dinkum about how they are regulating trade unions through this bill. The measures do not stack up against how companies are regulated and how company directors are held accountable. The measures do not stack up in relation to transparency, and we believe that they should. The measures do not stack up in relation to the proper penalties which apply to company directors, and they should equally apply to trade union officials. Finally, the measures do not stack up in regard to the independence of the authority which has regulatory oversight of trade unions, as there indeed is an independent body which oversees the regulations governing corporations.

We are pleased that we are debating this, but we are putting forward serious amendments which we believe the government should enact. They should adopt those amendments. They would strengthen the bill and give confidence to all Australians and to all union members that their money is being protected and is being used wisely by the union leaders.

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

When I introduced this bill I confirmed that this government believes in a free and independent trade union movement. We believe in the advocacy of employer organisations on behalf of their members. We believe in the accountability of these registered organisations to their members.

I thank the representatives of employer organisations who, unlike those opposite, have seen fit to support our bill in its entirety. I thank the trade unions who have worked with the government as well to develop this legislation through the National Workplace Relations Consultative Council. Together we have achieved a rare feat in the workplace relations space—consensus. This consensus on the key elements of the bill was achieved without compromising the core principles underpinning the government's policy position. These principles are: respect for the role played by trade unions and employer organisations in our society and our workplace relations system; respect for the members who are entitled to expect that their interests remain the primary motivating factor for these organisations; and strong compliance with the rules of organisations as well as the Fair Work (Registered Organisations) Act for improved rule structures, better investigation powers and procedures with Fair Work Australia for a tripling of penalties for breaches.

I would also thank those members of this place who have spoken in favour of this bill, including those on the cross benches. Unlike others in this debate who have sought to smear and malign the trade union movement with innuendo and false charge, I have been and this government have been consistent in their approach to recent events involving compliance with the Fair Work (Registered Organisations) Act. We have consistently stated our view, but the Fair Work investigations must be allowed to conclude without political interference. Fair Work Australia is an institution independent of the executive. We do not resile from the fact that the reports by the delegate of the general manager of Fair Work Australia into the HSU Victoria No. 1 branch and the HSU national office contain serious and disturbing material, which we have said in fairness to the members should be tested in the courts. We have also made it clear that the members of trade unions and employer organisations are entitled to expect that their membership fees will be used for their benefit.

Whilst we were doing this, I have to report to the House that those opposite have tied themselves in knots repeatedly contradicting themselves in an identifying spectacle of politicking. They have on one hand accused the government of political interference with Fair Work Australia, but then on the other hand have called upon us to intervene. They have accused, at different times, Fair Work Australia of being part of a political conspiracy, of administrative incompetence and debacle, and of delaying the release of the report for political ends. But then, when they read the report, they praised it as thorough, respected and methodical, and relied upon the content as unquestionable fact even though it had not been subject to cross-examination. They fell over themselves raising pseudo quasi-legal arguments to criticise the actions of the general manager. They then refused to acknowledge the basic tenet of our legal system and our democracy that allegations of actions contrary to law can and should be tested and determined within our court system.

Let me quote to you examples uttered by none other than the Leader of the Opposition. On 31 January this year at the National Press Club the Leader of the Opposition said the following about Fair Work Australia's investigation:

I just make the point that as things stand, this looks like an institutional go-slow to help the government.

That was a convenient message at the end of January, but later after the report had been released on 23 May the Leader of the Opposition described the same investigation as:

… a very long and very thorough and very meticulous and, I think, highly professional investigation.

So, there you have it. On 31 January the report is 'an institutional go-slow' and on 23 May it is amazing stuff. It is a convenient message he takes whenever it suits him in order to undermine unions and the interests of working people.

We in the government, however, have remained consistent throughout; the coalition has not. It is as simple as that in this debate about reform of registered organisations laws. This is the difference between us and those opposite when it comes to workplace relations. We make things happen, we get things done and we act in the interests of those we represent. We do not do and say things for the sake of being negative to obtain power. Most importantly, we do not keep our industrial relations policies a secret. We do not encourage the Australian voters to play hide-and-seek with our industrial relations policies. Those opposite work on the basis that the public will never find out what the coalition think until the actual election is conducted and over, just like they did in 2004. We have seen this time and time again with the opposition. They will not debate workplace relations, the full panorama of all the issues which affect all the Australian people that go to work every day. Of course, the Australian people do deserve better.

On 26 April this year, I took the difficult decision to intervene in proceedings before the Federal Court to apply for the appointment of an administrator to the East Branch of the Health Services Union. That branch covers workers in the health services sector in New South Wales, Victoria and the ACT. In explaining that decision, I said:

“I am particularly concerned that the interests of HSU members across Victoria, New South Wales and the ACT are not being properly served by the current dysfunction within the HSU East Branch.”

“My intervention is to ensure the broader public interest in working Australians having effective and accountable union representation is not undermined.”

I also said at the time that the decision:

… was taken to provide for the HSU to function into the future …

Fair Work (Registered Organisations) Act

Eight weeks later, the process of fixing this part of the Health Services Union is well underway. The Federal Court has already determined that there is sufficient dysfunction within this part of the Health Services Union and appointed an interim administrator to the HSU East Branch and HSU East, the New South Wales registered union. I thank the Hon. Michael Moore for agreeing to act in the position of administrator.

On 8 May I gave a press conference in response to the release of the report by the delegate of the General Manager of Fair Work Australia into the Health Services Union national office. During that press conference I made it clear that:

… the other unfortunate consequence is that this process has cast some doubts about the transparency and accountability of the broader trade union movement.

I believe that the problems which are reported in parts of the Health Services Union are not representative of the actions of the broader Trade Union Movement. I believe what we see here is the action of a few individuals, not the Trade Union Movement.

The government therefore committed to:

… taking wide ranging action to improve Fair Work Australia’s investigative processes … to enhance the accountability and transparency of registered organisations … strengthen associated penalties … and … introduce legislation to implement any recommendations from the KPMG Review into Fair Work Australia’s investigative capacities, once this review is completed.

Three weeks later, we delivered on these commitments and introduced the bill into this place—a bill that will improve financial training, transparency and disclosure by officials of registered organisations and by registered organisations to their members; improve the way that investigations into breaches of registered organisations provisions are conducted by the General Manager of Fair Work Australia; and introduce a threefold increase in civil penalties of the Fair Work (Registered Organisations) Act.

Registered organisations play a fundamental role in Australia's workplace system. Registered organisations play a fundamental role in the Australian democracy. These are organisations created and registered for the purposes of representing Australian employers and employees. They have particular recognition under Australian workplace relations law by virtue of their representative status, and it is because of that registration that they have particular statutory obligations in relation to their operation, conduct and disclosure.

Registered organisations are not regulated by the Corporations Act, and this is appropriate. Some in this debate—those sitting opposite, by and large—have argued that Corporations Act regulation should be applied to registered organisations. Others have argued that penalties should be increased 100-fold. Again we see the politics of simplicity and negativity clouding the opposition. They should know that there are many similarities between the regulation of corporations and the regulation of registered organisations. Officers of organisations, like those of corporations, are subject to serious duties and obligations. For example, they must exercise care and diligence; they must act with good faith; and they must not improperly use their position for personal advantage. Further, the financial regulation of entities is similar. They are required to undertake regular reporting of their 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 and ASIC are in fact similar. In addition, this bill uses corporations law concepts like related-party transactions.

But 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. Corporations are designed to generate wealth and protect the financial interests of their shareholders. Organisations are established to represent the rights of their members, whether employers or employees, at work amongst other things. There has been a false debate here that, unless all unions are regulated exactly like corporations, somehow anything else is insufficient. Yet there are many different types of entities in this country that are regulated by different regulatory regimes that are more appropriately suited to what they do and how they do it: charity organisations, not-for-profit organisations, partnerships and unincorporated associations, for example.

This bill will improve the financial accountability and transparency of registered organisations. It will increase penalties for breaches threefold in line with those in the Fair Work Act. It will make sure that officials of organisations receive appropriate financial training. It will require the remuneration of highly paid officers, related-party transactions and material personal interests to be disclosed to the members. It will fix deficiencies in the current legislation—which was in fact introduced by the Leader of the Opposition, who was the relevant minister at the time—not least by now allowing Fair Work Australia to share relevant information with state law enforcement and regulatory agencies where it is appropriate to do so. This was one of the things which those opposite were pointing to when criticising the conduct of the Fair Work investigations into the HSU, and with this bill we are actually remedying the errors in drafting made by the Leader of the Opposition when he was minister for industrial relations.

This is extremely important legislation, not entered into lightly, which should be supported by all members of this place. I should also add—when we talk about people who are supporting this—that, whilst the opposition appear to be choosing the path of negativity, the Australian Industry Group, the Australian Chamber of Commerce and Industry are both supporting this, as are the ACTU. In fact, some employer organisations have criticised us for going too far, such as the Master Plumbers Association. This bill has the support of the Business Council of Australia. So the stakeholders—the people who operate day to day—are unanimous in supporting us, yet those opposite still persist with their old-fashioned remedy of union baiting.

We want to make sure, on behalf of all those people in Australian society who are genuinely interested in the ongoing viability of registered organisations, that the registered organisations regulation operates in a way which ensures that organisations are accountable to their members. I commend this bill to the House.

Kelvin Thomson (Wills, Australian Labor Party) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Farrer has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The immediate question is that the amendment be agreed to.

Question negatived.

Original question agreed to.