Tim Hammond (Perth, Australian Labor Party) Share this | Link to this | Hansard source

I was speaking in this debate before being interrupted by 90-second statements and a very entertaining question time, where I must say we saw the government in disarray like we have rarely seen before—plucking numbers out of thin air, but those numbers did not get better. They went down, down, down—or up, up, up depending upon your view of the world. But wasn't it a sight?

I will move to another slow-moving train wreck of a policy development from this government, and that is the Fair Work Amendment (Corrupting Benefits) Bill 2017. Let us talk about this new focus group notion of 'fairness' that the government likes to trot out every now and again. I tell you what; we really see it in sharp focus when we look at the bang for our buck we got with the Dyson Heydon royal commission. Let us look at the numbers themselves. If you want numbers that do not stack up, check out these rippers! The cost of the royal commission over the course of 12 months was $46 million. That is a lot of zeros. My calculator barely accommodated them all. What did we get out of that $46 million spend? We saw 79 recommendations from former Justice of the High Court Dyson Heydon. For those who are playing this at home, that equates to approximately $582,278.48 per recommendation. That is what 79 into $46 million gets you.

Up until this point in time, almost 18 months after the event, we had not seen pen put to paper on any of those recommendations. This is the first time that the government has even really indicated it has read them, let alone acted on them. Even then, what do we see? No, not 78 of the 79 recommendations being implemented in this bill. Not even 70 or 60 or even 50. It is not even a double-digit number in relation to the recommendations that are being implemented by this government as a result of that very expensive royal commission. We see three. Three recommendations form the basis of what was a double dissolution election, what was seen as an incredibly so-called important exercise brought about by the government to try to shine a light on what it thought was systemic corruption in the trade union movement. And here we stand today reduced to a paltry three recommendations as a result of this bill that has stemmed from $46 million spent on a royal commission.

Let us do the maths again. Let us keep looking at this value-for-money notion that the conservatives like to hold so tightly and so dear. Again, plugging these numbers into your calculator, how much are these recommendations worth? $15,333,333 per recommendation. How does that sound like value for money? Forty-six million dollars was spent and countless hours, days and weeks were spent going over the evidence, trying to find that smoking gun and trying to find that needle in a haystack. What we find here are three recommendations, the subject of this bill, to the tune of over $15 million per recommendation.

Madeleine King (Brand, Australian Labor Party) Share this | Link to this | Hansard source

What a waste.

Tim Hammond (Perth, Australian Labor Party) Share this | Link to this | Hansard source

What do we see here? A waste, as I hear my good friend and comrade, the member for Brand, say. I am happy to answer the question, assuming that it was put as a question and not a statement. I will take it either way. What a waste indeed. Let us talk about waste. Let us talk about waste in terms of inactivity after the review process. I tell you what: if there is one consistent theme that comes from this government, that is morbid inertia following review. As they say in the classics, let me count the ways.

Let us start with the small amount credit contract review. That was an incredibly important review undertaken months, months and months ago into an incredibly important issue. It is the way in which payday lending and consumer leases, commonly known as rent-to-buy leases, impact upon vulnerable people in our community. Those vulnerable people take advantage of what is being sold to them—often on terms they do not really understand—and become hopelessly entrapped in more and more debt to the point where they just cannot get themselves out of a hopeless cycle of debt. It mounts up day after day, having taken goods and services under terms and conditions that they just simply had no idea about. It was a very important review.

Where has a small amount credit contract review actually taken us? It has taken us to a whole number of recommendations that had bipartisan support. The community quite rightly cries out for an environment where both sides of politics reach across the table, join arms and join forces in relation to subject matter that can actually result in legislation that has bipartisan support. The small amount credit contract review is that review. But it is stunted, it is stagnant and it is going nowhere under this government. Legislation that was promised to us before the end of the financial year has not seen the light of day. In the other place, Senator Gallagher revealed in Senate estimates, after some torrid and forensic questioning of the department, that pen has not even been put to paper in relation to this vital legislation that could actually make a difference to the lives of thousands and thousands of vulnerable consumers in our country.

We have also seen it with the Conde review into MPs' entitlements, where it has taken over 12 months for this government to respond. Even then, with a half-hearted ban on the life gold pass, we are only starting to see some traction now, some of which does not even affect the Prime Minister's parliamentary colleagues. We see it again in relation to the Productivity Commission review and the review into the Australian Consumer Law. In my portfolio, we see a raft of non-contentious, practical and pragmatic recommendations that we are told are under consideration by this government, but I would not hold my breath for one second in terms of seeing this talk converted into action.

On reflecting on the government's current review inertia, I try to find a way to adequately capture the sorry state of affairs that we see ourselves in right now. I will not pretend to be so witty, clever or intelligent as to put it better than it has been put before. I find myself reaching into classic song lyrics. I reach into the song lyrics of the King; no-one less than the King. That is not Queen, but the King:

A little less conversation, a little more action …

Let me continue: if you thought just one line was apt, it actually gets better as you dig down into the lyrics.

Andrew Leigh (Fenner, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Oh, no—keep going!

Tim Hammond (Perth, Australian Labor Party) Share this | Link to this | Hansard source

I am glad you asked. I will not sing it, but I will articulate it because it is so apt and I could not have said it better than the King. I will refrain from the movements that go with the song and I will refrain from singing the song, despite, perhaps, some demand from my great friend and comrade, the member for Fenner! But it goes like this:

A little less conversation, a little more action please

All this aggravation ain't satisfactioning me—

or anyone else, I might say—

A little more bite and a little less bark

A little less fight and a little more spark

Well, wouldn't that be nice? Wouldn't that be nice in this instance, in relation to the Heydon royal commission, in relation to the small-amount credit contract, in relation to the Conde review and in relation to reforms to the Australian Consumer Law?

But let me be clear: this side of politics will never stand for any form of corruption in any way and in any shape. We will support legislation that is properly drafted that applies to registered organisations. But you have to be very sceptical about the Prime Minister's motivation here. Quite frankly, this is a do-nothing or, at best, high-taxing, highly squibbing government which has shown form in this as recently as the budget the other night. It took no action to respond in this case to any of Dyson Heydon's recommendations—not before the double dissolution election and not after it, and not even when this parliament was debating the two antiworker pieces of legislation that were the Prime Minister's justification for taking this nation to the polls.

The Turnbull government, this Prime Minister's government, did nothing in response to these recommendations—nothing, that is, until they realised that they were on the wrong side entirely. They were on the wrong side entirely when it came to cutting penalty rates. Some who are more cynical than I might have the temerity to suggest that such a move might be an attempt at a smokescreen to distract everyday Australians, working people and also the trade unions representing them from what we really see here. They are a government that are entirely content to leave the top end of town, businesses making millions and millions, if not billions, of dollars in turnover, alone or, even worse, not even leaving them alone but handing them a tax cut to incentivise them to continue the practices that they are currently undertaking—without the threat of a royal commission, I might add.

One has to ask: is this just cynicism writ large? We see a government, without the blink of an eye, happy to commit $46 million of taxpayers' funds to uncover nothing, perhaps, but to distil 79 recommendations to the three recommendations that are the subject of this legislation. It is willing to fork out $64 billion—I think that is what we are up to—in relation to tax cuts to the big end of town, an all-time high. Luckily, we are finishing up today or it might be more tomorrow! This is in relation to appeasing them about continuing to undertake the practices they are undertaking at the expense of workers, who are copping a pay cut every Sunday that they go to work and every public holiday that they go to work—every time they actually try to do their bit to put food on the table for their families.

Is this the sort of government that really has fairness at its heart? It is really interesting that, before spending $200,000 on a focus group to tell it which way it needs to aim in terms of its values, we did not really hear much about fairness from this government. If anything, we heard precisely the opposite and we saw even worse. You just cannot help but wonder about the political motivation driving this Prime Minister when, faced with Labor's private member's bill to preserve take-home pay and to protect penalty rates, he is all of a sudden struck with an urgent need to present and introduce this bill. Extraordinarily, this bill was introduced and brought on for debate one week after Labor's bill. There was no action of any description for more than 12 months and then suddenly this government gave this bill priority. The question becomes: what has this government shunted to the back of the line to make way for this bill? It is very clear. I have already alluded to the plethora of reviews that are sitting there growing old, gathering dust, that should be the subject of legislation straightaway. If we ever needed any more confirmation that this government is more concerned with saving its political skin than standing up for vulnerable and low-paid Australian workers we have it here writ large.

There has been pitiful consultation in relation to this bill. The terms of the new offences differ from the model legislation recommended by Dyson Heydon. They differ from existing bribery and corruption offences relating to public officials in the Criminal Code. And because they are different one really wonders how much confidence one can have in this legislation and how sure one can be that it does not unfairly target workers. The questions then become: Who is next? Who lines up next? Who is in the frame next? It is certainly not big business, it is certainly not the banks—despite the rhetoric that this government tries so desperately to wheel out day and day again. We know who is next. It is schools—they are next. It is hospitals—they are next. It is mums, dads, kids and the elderly who are delaying seeing doctors, and delaying seeing specialists because there is not a lift on this Medicare freeze. It is those who would otherwise be in receipt of benefits under the NDIS—they are next. We see the proof of the pudding in this budget. We see the proof of the pudding in this legislation. We will not see any sign of things to change until we see a change of government.

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

I rise to support the Fair Work Amendment (Corrupting Benefits) Bill 2017, which seeks to protect the interests of working Australians by introducing disclosure requirements, similar to those currently required by the contemporary governance standards for elected members of local government, parliament and boards. The legislation essentially requires potential conflicts of interest to be made more transparent, while introducing greater accountability for those involved in the process of negotiating or enterprise bargaining. The bill requires that any financial benefits obtained, by an employer or union, during enterprise agreement negotiations be disclosed to employees before they vote on the agreement. If any payments are exchanged between an employer and a union then both parties have an obligation to transparently disclose these payments to their employees and members respectively. The Turnbull government seeks to raise the standard of governance in the workplace relations sector to match that of corporate Australia, effectively applying the same high standards, responsibilities and fiduciary duties to union officials as currently applied to company directors.

The Turnbull government has recently introduced related legislation: the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017, which prohibits cashback demands, where employers make employees pay back a portion of their wages in an attempt to circumvent minimum wage laws. That legislation aims to prevent cases of widespread underpayment of workers, as has been discovered with a number of national franchise chains. The government is committed to ensuring that the workplace relations sector is fair and that the legitimate employment conditions of vulnerable workers are protected.

Workers who pay regular membership dues to unions to represent them in workplace negotiations are entitled to expect that the union officials will act in good faith, putting the best interests of their members first, to obtain the best possible working conditions. Consider the opportunity cost of paying several hundreds of dollars per year in union membership dues. Workers could instead make additional mortgage repayments, reduce high-interest consumer credit card debt or make additional contributions to superannuation. These measures would add up to tens of thousands of dollars in accumulated wealth over a lifetime. That is why it is so important to ensure that union officials fulfil their obligations to their members after having charged membership fees.

By way of background: the measures proposed in this bill are in response to findings by the Heydon royal commission, which uncovered a series of payments between employers and unions which were designed to ensure that companies received favourable treatment from unions, often to the detriment of the employment conditions of workers. Justice Heydon referred to these payments as 'corrupting benefits'. The payments were often disguised by false invoices marked as payments for training or similar, made as part of a deal in enterprise agreement negotiations or accompanied by lists of names of employees, who were made members of the union without their knowledge.

The royal commission found that some officials were paid private kickbacks that they used for personal gain. The royal commission heard evidence that former CFMEU Queensland official Dave Hanna used free building materials and labour to renovate his home in Brisbane. The AWU's Bruce Wilson used funds to buy an investment property and renovate former Prime Minister Julia Gillard's residence.

Some officials used threats to pressure employers to pay them money in order to bolster union coffers. Testimony revealed that the former CFMEU ACT official Fihi Kivalu demanded cash for work in Canberra. The New South Wales CFMEU demanded that employers pay 'donations' for a drug and alcohol rehabilitation fund, money from which they secretly misappropriated funds for their union. Other extracted payments bolstered status and power, particularly within the Labor Party. The Leader of the Opposition and Cesar Melhem were very effective at this, regularly signing employees up to the union without their knowledge and securing ongoing payments for the AWU in Victoria.

In return, employers expected to gain more flexible or cheaper employee pay or conditions, win work or avoid strikes and other industrial disruption.

The Heydon royal commission revealed that these payments have arisen in many cases involving the AWU in Victoria. Thiess John Holland paid AWU Victoria $300,000 plus GST whilst they built the EastLink freeway extension in Melbourne's eastern suburbs. The AWU issued false invoices to disguise the payments as training, back strain research, AWU magazines and advertisements, forum tickets and conference sponsorships, but none of these benefits were actually provided. The payments were never disclosed to AWU members or employees.

ACI Operations paid AWU Victoria around $500,000 while they laid off workers from their Spotswood glass-manufacturing factory. The AWU invoiced the payments as paid education leave, but the payments were predominantly used to offset loans to renovate the union's Victorian office and for other general union costs.

Cleanevent paid AWU Victoria $75,000 to maintain an enterprise agreement that paid cleaning workers well below award rates and stripped them of penalty rates, overtime and shift loadings. The payments were detailed in a secret letter between the AWU and Cleanevent and never disclosed to cleaning workers. Level 1 casuals working at events were entitled to 176 per cent more per hour under the award than under the agreement sealed by these payments.

Unibilt paid the now Leader of the Opposition $32,000 to fund his 2007 election campaign manager while the company was negotiating an enterprise agreement with the AWU, for which the Leader of the Opposition was then the national secretary.

Chiquita Mushrooms paid AWU Victoria $24,000 while it was casualising its mushroom-picking workforce. The AWU falsely invoiced the payments as paid education leave and never disclosed the payments to Chiquita employees.

Winslow Constructors paid AWU Victoria around $200,000 and provided the union with lists of names of employees, who were secretly signed up to the union, but AWU hid these payments behind false invoices for occupational health and safety training, workplace inspections and similar.

In response to these findings of serious misconduct, the Turnbull government is introducing legislation to ban illegitimate payments and to require full disclosure of legitimate payments made to unions. The Heydon royal commission recommended outlawing secret payments. The government will amend the Fair Work Act to make it a criminal offence to give, receive, offer or solicit such payments. This prohibition will apply to unions and employers. Certain legitimate payments will be allowed, such as payments to unions for genuine services that are actually provided. Where legitimate financial benefits would arise in a workplace deal, the government's changes will also require these benefits to be fully disclosed to employees before they vote on a deal.

The Leader of the Opposition, and the Labor Party, should now support this important reform to outlaw corrupting benefits and clean up the unfair, secretive and often corrupt payment systems that have tainted Australian workplaces for decades. How can any fair-minded person condone these blatant conflicts of interest? Under this legislation the penalty for offering benefits intended to corrupt a union official will be a maximum of 10 years imprisonment or a fine of $900,000 for an individual or $4½ million for a company. Penalties for other than legitimate payments or benefits, such as a payment for a genuine service actually provided, will be two years imprisonment or a fine of $90,000 for an individual or $450,000 for a company.

Our workplace relations and industrial relations system does not operate in isolation but in the context of increasing global competitiveness from emerging nations in our region and beyond. Our industrial relations and workplace relations system must be competitive with our major trading partners yet offer reasonable protections for Australian workers. Employment conditions must be matched with productivity—the long-established mantra of 'a fair day's pay for a fair day's work'. When these are in equilibrium our economy is strong. When they get out of kilter then either workers are exploited or Australian companies go out of business and jobs are lost to overseas competitors.

When I started my early business career we manufactured pressed metal components and pipe supports in our Bayswater and Belmont factories, with Australian workers. When things got tight, my family, including my father and mother, worked long hours in the factory, at the presses, to fill orders. Those were the good old days, nearly 20 years ago—when we washed our hands in Solvol! As the years progressed, intense competition from overseas meant it was unviable to manufacture in Australia anymore as our products could be purchased from suppliers in Taiwan at little more than the price of the materials. So we were forced to change our business model to warehousing as opposed to manufacturing. This has been the case in many industries across Australia.

The government is committed to restoring integrity and fairness to workplaces. This starts with requiring employers and unions to act with integrity and fairness in negotiations. Professional associations have codes of ethics. If you hire a real estate agent, you expect to get the best price for your house; obviously you would be unhappy if, after the sale, you discovered they had taken a secret payment from the buyers. If you hire a lawyer, you expect them to act in your best interests, not take secret payments from the other party. It should be no different for workers who join a union; union bosses have a responsibility to put their members first, not themselves.

Through the Heydon royal commission, evidence has emerged that a raft of secret and corrupt payments in recent years between businesses and unions have collectively been worth millions of dollars. Often these payments were for highly questionable purposes disguised by false invoices or marked as payments for training or other services never provided. Some secret payments have been made for personal gain. As I mentioned earlier, a former CFMEU boss was recently arrested after allegedly receiving more than $100,000 worth of renovations to his home, paid for by the company employing his union workers. Some secret payments boosted union coffers. For example, the recent royal commission uncovered evidence of the CFMEU demanding donations for a drug and alcohol rehabilitation fund, from which money was misappropriated.

Other payments were accompanied by lists of names of employees who were secretly joined to the union without their knowledge to boost influence within the ALP. In some cases, unions received payments while members sacrificed their benefits and conditions of employment. For example, the deal between Clean Event and the Leader of the Opposition's AWU stripped low-paid cleaners of penalty rates, overtime and shift loadings while providing the union $75,000 in undisclosed payments. In other cases, companies made payments to unions while making workers redundant. These secret payments are a blight on our workplace relations system. Surely, workers should have confidence in negotiations between their union and employer and that they are conducted honestly and fairly, without conflicts of interest.

The Turnbull government is taking action to stop improper payments between employers and unions. It will become an offence to secretly make corrupt payments between businesses and unions, and any legitimate payments will require disclosure. In future, only specified legitimate payments such as genuine membership fees will be permitted, and these will need to be disclosed. For payments or benefits provided outside these rules, serious criminal penalties will now apply. The proposed legislation will apply equally to employers and unions. Whether in receipt of or paying a benefit, or soliciting or receiving it, both parties will be held accountable. This legislation will help clean up the unfair, secretive and often corrupt payments. I commend the bill to the House.

Matt Keogh (Burt, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak on the Fair Work Amendment (Corrupting Benefits) Bill 2017, which is an interesting piece of legislation. The intent of this legislation is to make it an offence to engage in corrupting- or bribery-type behaviour between employers and those within the union movement and employees. This bill is effectively based on about three of 79 recommendations from the Heydon royal commission. If this is the strike rate that we are going to see from the government on implementing recommendations from a royal commission such as this then it really further highlights the base political motives that sat behind the holding of the royal commission in the first place, not to mention that it has taken the government over 12 months to bring forward this piece of legislation to implement these recommendations.

I would like to say that this piece of legislation has really engaged my mind as a new member of parliament, because prior to entering this place I worked in the legal profession as a specialist in the area of anti-bribery and anticorruption. It is something that I know a little about, having gone out to many employer organisations and corporates around Australia to train them, to develop policies with them and to engage with them to prevent bribery and corruption both within Australia and internationally. So I am quite passionate about making sure that we stamp out bribery and corruption in this nation and bribery and corruption that may occur between people in this nation and those from overseas, whether it be private or with foreign officials.

Something that we should not forget in debating this legislation is that we need to do more on the enforcement side when it comes to bribery and corruption as a general concept in this country. Over a number of years now, under the watch of this government, Australia has slid down the rankings when it comes to looking at those countries which are the least corrupt across the globe. Australia's rankings have fallen. We are apparently getting worse at dealing with corruption instead of getting better, and no amount of legislation is necessarily going to fix that. We need to have law enforcement engaged, trained and given the specialist resources, or given the resources at all—and here I refer just by way of an aside to the cuts to the AFP that we have seen in this budget. They are losing around 150 personnel. When it comes to the prioritisation of the work of our federal law enforcement officials, we need to make sure that we have personnel with the specialist expertise to engage in stamping out corruption of all forms in the Commonwealth and also to deal with those from Australia who are involved in foreign corruption. If that is occurring, we should make that stop. But this is still important legislation because it is important that we make sure that we are very clear as a nation that we are against all forms of corruption wherever they may occur.

This legislation effectively criminalises certain behaviour—corrupt behaviour, as you may generally describe it—which is actually already a crime. Under the criminal codes and crimes acts of the various states of this great Commonwealth, you will find that it is an offence to commit fraud against your employer, and you will find that there is an offence generally described as a secret commission. If you look at the intent of the legislation—I will get to the drafting in a minute—there is nothing in the intent of what is proposed to be criminalised. In fact, if you look at the recommendation of Heydon, he says secret commissions should be outlawed at a Commonwealth level, but they are already illegal under state law, which brings me back to my previous point: if this was going on, it should have been picked up by police and other law enforcement agencies and run with. In any event, one could never be critical of making something that is already a crime a crime. There is no harm done, at any rate.

As I said, I would like to come to the drafting, because this is Commonwealth law; this is going to be a Commonwealth crime. Anyone who has taken the time to pick up the Commonwealth Criminal Code, as I have many a time in my life as a former federal prosecutor, will know that Commonwealth crime is the most complex criminal law in the nation. We have taken the approach of adopting the great work that was done several decades ago of trying to harmonise criminal law and setting out a model criminal law that could be used around the country. The Commonwealth Criminal Code is based on the Model Criminal Code, and it completely codifies the concept of crime. The thing about doing that is it makes the drafting very difficult. That is what we can see right here in this legislation. We can see some particularly complex drafting has occurred here. Unfortunately, the government may have stuffed it on the way through. What we have is that the terms of the new offences that are being created here differ from the model legislation that was recommended by Heydon, and they differ from existing bribery and corruption offences that are already found in the Commonwealth Criminal Code.

Part of this may be due to the rushed way in which the government have brought this forward. As I said, it seems to have taken them over 12 months to bring the legislation in, but the drafting instructions going to the department and the production of the bill coming into this chamber all happened within about a month. I can tell you that is probably a high-risk game when it comes to creating further criminal offences for the Commonwealth statute book. But the lack of consultation as a result means that even organisations such as the Ai Group said to the Senate committee that was reviewing this legislation that they were quite concerned that there were important changes being made to this bill and that they should be properly reviewed before the legislation proceeds. However, as you know, we have no difficulty with the intent of what the legislation is proposing. But it does tell you something when the Ai Group is criticising a Liberal government for legislation such as this.

When I turn to the complexity of the draft of this legislation, we have different tests for intention that arise in different parts of the offences that have been set up in this bill. We seem to be missing one of the crucial concepts—that of dishonesty—which seems to create some offences that are much broader than was actually intended to be provided for in legislation such as this. It is desperately important when we create criminal law in this parliament—more than any other law—that we avoid unintended consequences. We hold an honoured and humble position in this chamber, and it is especially so when we create criminal law. Not only do we potentially take away the ability for the citizens of this country to do something but we also impose a criminal penalty for doing it. It is not to say that we should not create the crimes or the criminal offences, but we need to be very careful when we do it. And here we seem to have created or are proposing to create some criminal offences that are not necessarily going to survive that law of unintended consequences. I think we have some very broad offences. I can understand why we have broad offences, but what they seem to be critically missing is properly dealing with the concept of dishonesty in what is being proposed to be a criminal offence. The conduct that is being criminalised is that which is being done in a way to rip off a union, to rip off an employee or to rip off an employer. There is some sort of corruption involved, as opposed to just criminalising certain acts, which may, in certain circumstances, be entirely legitimate.

The drafters have attempted to deal with that by setting out a litany of certain things that the legislation is not designed to prohibit. That is a good start, but it would have been a much cleaner approach if it had included concepts such as dishonesty, or a similar concept from the criminal law, to make sure that we did not have this potential for unintended consequences coming from the legislation. In fact, what would have been good is if they had looked at the offences for bribery and corruption that exist in the Commonwealth statute book and said, 'Look, these have been interpreted by our courts already and we know how these will be interpreted when they are put into Commonwealth law so why don't we take that framework and move it into this piece of legislation so that everyone who reads it has an understanding of how it will operate?' We have a body of laws that exists already, but within this one bill we have about three different types of offences that are being created.

As a former federal prosecutor, one of my favourite pieces of policy guidance that has been created by a government department is the 107-page and beautifully named: A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers. This document makes great reading any night of the week—especially if you have trouble sleeping. But, if someone had bothered to read that document, they would have seen that we have other bribery and corruption offences that could have been used as the basis for the framework of the ones that are being considered in this piece legislation. While, of course, the intent of the legislation is admirable in that we do need to stamp out all forms of bribery and corruption in this nation, I think there are some things that could have been fixed up in this legislation. It could have been made cleaner and it could have been done better, if the drafters were given the time to do it. I do not criticise the drafters, because they were given a very short time to turn this around—probably with some dubious instructions at best—but there was no opportunity to consult when this legislation was brought in so quickly, and yet it has such breadth, which is also of serious concern.

The other thing I would point out, as I mentioned at the beginning, is that the intended conduct to be criminalised here is already an offence under state law. It makes sense in one regard, given that the Commonwealth has effectively taken over all legislative responsibility for the relationship between employees, employers and their representatives, that the offences that relate to that conduct would also exist in the Commonwealth statute book. The question that then arises is: why only focus on the narrow focus of this conduct and not look at corrupt behaviour between corporations generally, which is also a specified Commonwealth power? Those areas of corruption have not been brought onto the Commonwealth statute book. Quite frankly, our stature internationally, in terms of dealing with bribery and corruption, would benefit greatly and would be improved if they were to also come under the auspices of review of the AFP, ASIC, APRA and the other law enforcement bodies, such as AUSTRAC, in the Commonwealth that should have the specialist expertise to deal with this.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Fair Work Amendment (Corrupting Benefits) Bill 2017 and the amendment to the bill. Australia is recognised as being generally honest. It is an honest place to grow up in. It was certainly an honest world that I grew up in. I do not think I knew what corruption was, to be quite honest. I still live in a community where people neglect to lock their doors and leave their keys in their car. We have an inherent trust in people—a man's handshake is a deal. We trust that other people will treat us the same as we treat them. We trust that they will not rip us off. I often say when I am speaking to constituents and people who feel as though this nation's parliament may not serve them as well as they would hope that we should be very proud that in this parliament—that I am aware of, at least—we have never had what I would describe as a major corruption scandal. Sure, we have had people that have done the wrong thing with their travel benefits and their work expenses claims. We have had people that have done the wrong thing with colour TVs and teddy bears, if my mind goes back to the right era, but one would hardly call that a corruption scandal. We have not seen huge Defence contracts led on a wink and a nod. We have not seen process frozen out. And those that have transgressed, even at that lower level, have generally paid a great political price—they have lost their careers. We set a very high bar and it is one of the reasons we should be proud of the parliament and proud of the job that generally this parliament does for Australians.

Corruption is cancer. It is the disease that stops the advancement of so many nations. It is why Australia has an important part to play in the developing nations within our region. Australia is trying to help them to learn from our experience how to manage their parliaments. I remember a family holiday in a South-East Asian country—that shall remain nameless for the point of this exercise—with our children 15 years ago. I can remember my children were aged at that stage about 15 and 21, so they had an appreciation of the world at least. We were on a tourist bus and were pulled over by the police. The driver stopped to talk to the police for a while and then the driver reached into his pocket. They reached a suitable arrangement and we moved on. The kids said, 'What was that?' The driver said, 'We had to pay the police to continue on the road so that we did not get defected or arrested or put off the road.' My kids said: 'They can't do that. They are the police.' I said, 'Unfortunately that is the case we are dealing with in much of the world.'

In Australia we need to kick back against those corruptions. We need to ensure at every level we try and stamp it out. That is why many of the findings of the Heydon royal commission are in fact so disturbing, because they go to that very point of trust that we have in the people who are supposed to work for us and with us when in fact they have been taking advantage of the workers in this particular case. Unions should be able to cut a deal with businesses and with the employers, and it may even entail trading away wages or certain benefits for other certain benefits as long as it is a good honest deal, a quid pro quo.

For instance, if you were to say to a worker, 'We are going to take $5 an hour off you but the kickback is we are going to help finance your children's education,' that might be a good deal that the workers might approve of—they might not but they might. If they cut a deal that said, 'We will take $10 an hour off and at the end of the year every one of the workers will get a new BMW,' that might be a good deal or it might not but the workers should know about the deal that is being cut on their behalf. It might entail a deal that sees them greatly increase the company's superannuation contributions.

Mr Deputy Speaker, if you were employed in a workplace and I said to you, 'What if your $10 were to go off and contribute to a $300,000 payment for unspecified services that the union was supposed to provide but in fact never delivered upon?' I think you, Mr Deputy Speaker, would feel pretty upset about that. But the Heydon royal commission told us that you, Mr Deputy Speaker, if you had been working in that workplace, would not have known about it. I think the issue here is the secrecy. It is the secret deals, the kickbacks. What can we expect from officials and companies that reach deals that workers do not know about? The way to fix this is to shine the light in, to provide some sunshine, to offer full transparency, and that is what this legislation is about.

The story is if you want to know what is going on here, if you want to know if these are corrupting benefits, we need to follow the money trail. The money trail always takes you to the real cause, the net effect and net benefit. When we see who might benefit from these deals, it really starts to expose how corrupting they can be. Did members of the AWU, for instance, really want to trade away their benefits in order that the member for Maribyrnong could have a $32,000 benefit to his election fund? I think they should have been told about that. I think that would be the answer. Perhaps every union member would like to have done that—it is quite likely they would have—but they certainly should have known about it, and they certainly should have known what it is they lost for that to happen. This bill will make such secrecy a criminal offence. We are not actually targeting one particular sector of the community, even though the legislation has come about as a result of the findings of the Heydon royal commission, we are trying to stamp out corruption generally. That will force unions and companies to tell their workers what they are doing with the workers' money. We are letting the sunshine in.

There are a number of things this legislation does. The criminal penalties will apply equally to employers and unions. I think that is a very important part. The penalties and payments for benefits intended to corrupt a union official will be a maximum of 10 years in prison. We are not pussyfooting around; this is a serious penalty. If you are talking serious amounts of money you need a serious deterrent. So it will be a maximum of 10 years imprisonment or a $900,000 fine for an individual or $4½ million for a company. I would think that those kinds of penalties should make most individuals and most companies think again before they undertake that kind of activity. The penalties for other illegitimate payments and benefits will be up to two years in prison or $90,000 for an individual or $450,000 for a company.

I think most importantly, the bill will also require that any financial benefits obtained by an employer or a union through an enterprise agreement negotiation be disclosed to the employees before they vote on the agreement. That really must be the most important part. There is nothing particularly wrong with people making sensible agreements that benefit all parties—in fact, it makes sense. This parliament, this government, is committed in another sphere to developing free trade agreements, for instance. One of the things that free trade agreements do is benefit all parties. So it should be that when agreements are made within the workplace, if it benefits all parties, if people come to a good, mutual understanding, they should be able to strike that deal, but the negotiators absolutely have to tell the people on whose behalf they have acted exactly what has been done on their behalf and what has been traded off to achieve that deal. If money changes hands between the employer and the union then both parties have an obligation to honestly disclose these payments to their employees and members.

On balance, I think this bill rings well with some of the lines we have heard in relation to the budget in the last couple of days. It is about fairness. It is about making sure that everybody gets a fair go. That is certainly one of the great slogans of Australia, that we believe that everybody gets a fair go. If somebody is going to do a deal on our behalf then a fair go is that we know what it is. I absolutely commend this legislation to the House and I look forward to it making a real difference in our workplaces and to it not just affecting workers but setting an example to the rest of our community that says, 'This is the standard by which we live in Australia. It is the standard we expect all Australians to meet.'

Mike Kelly (Eden-Monaro, Australian Labor Party) Share this | Link to this | Hansard source

When we are talking about the Fair Work Amendment (Corrupting Benefits) Bill 2017, we are talking about a prime example of what this government is all about. It is the government of the meaningless gesture and the government of the political agenda. It is a shameless political agenda of trying to destroy the Australian trade union movement. We have heard talk in this last speech about fairness and about superannuation issues. We will come back to that. We will talk about whether this government is really interested in fairness and in prosecuting criminal behaviour and establishing the rule of law.

My good friend and colleague—the member for Burke, who is actually an expert on a lot of these legal issues—quite rightly pointed out that the alleged criminal behaviour that is to be addressed in this legislation is already tackled by existing crimes law. I am not sure what the window-dressing here is all about. We do know that instead of spending $60 million or $80 million on a royal commission, which obviously had a shameless political agenda, that money would have been better spent on enabling our police and criminal investigators to actually do their jobs in prosecuting the law. Of course, the Labor Party is more than supportive and willing to back measures that deal with crimes in the union movement, as we are in any sphere of Australian life. But it would have been a better result to enable our law enforcement agencies to actually get out there and do that job instead of engaging in meaningless gestures, like this sort of legislation, where laws for these crimes already exist.

We could talk about wanting to deal with vandalism, harassment in the workplace, issues of tracking the dubious transfer of money, allegations of relationships with the mafia and these sorts of things. That actually describes a lot of the allegations that have been directed towards the federal parliamentary Liberal Party and describes the way the Liberal Party in New South Wales has operated. We know all about how the Free Enterprise Foundation worked to launder money from developers to the New South Wales Liberal Party. The Liberal branch in my own town of Queanbeyan was central in that process. Developers were literally handing brown paper bags to the head of the Liberal branch in Queanbeyan, who then drove them up the highway to Sydney.

There is all sorts of activity that goes on out there that is worthy of attention, but this is about the choices this government makes. When it talks about 'the right choices', it makes highly political choices that are directed at a particular agenda. That particular agenda is the destruction of the union movement. Talking about the sorts of issues that are out there in the workplace and out there in industry—corruption and the rule of law—why was there no interest in setting up a royal commission into the banks and why was there no interest in looking at the vast array of examples that have been exhibited recently about the underpayment of workers? We have heard those sorts of stories about 7-Eleven, Domino's, Crust pizzas, McDonald's and Caltex. There are all of those stories out there that are all worthy of some sort of analysis from the point of view of systemic violations.

We recently found out something thanks to the National Union of Workers. We heard these references from the previous speaker on superannuation. Again highlighting the need for unions and why they exist, the National Union of Workers ran a process of analysing superannuation through an online wage calculator and uncovered that thousands of workers—not just one or two but thousands of workers—are being absolutely ripped off in relation to their superannuation. Based on the data that was coming in back in November last year, where nearly 20,000 workers' pay details were entered into this fair pay campaign calculator over three weeks, the calculator revealed that more than half of all restaurant industry submissions showed that staff were being denied minimum rates of pay.

These are systemic issues that are worthy of deeper analysis, investigation and perhaps royal commissions. But there is no interest from the government. What is the message that is being sent that we heard from the previous speaker? It is a message that says: 'It's all fair in love and war if you're a business. That's okay. Go for your life. People are only widgets. They're only part of the production process or the business calculation. You can do what you like with them.'

Well, that is not how we think. I have often heard the Prime Minister come in here in many question times, look at the Leader of the Opposition and slander him mercilessly. We heard some more of that previously in relation to enterprise bargaining arrangements and whether or not the Leader of the Opposition is at all interested in the welfare of cleaners. Let me tell you he is, and was and still works tirelessly in their interests. But when you hear the Prime Minister talk about cleaners—his very toilet in his own office is cleaned by workers who are being ripped off blind in this building, whose wages have been frozen since 2012, who are struggling to put food on the table and who are being squeezed like pips to do more work for less in this very building, cleaning his room, his toilet—does he care about them at all? Does he even see them as humans? The hypocrisy of this man is unbelievable. Pointing to a man who has worked all of his life to look after the interests of those sorts workers, he said that penalty rates have been given away by the unions. Well, they have not been.

The issue here is that in an enterprise bargaining agreement there is a trade so that some aspects of productivity arrangements will be entered into in exchange for benefits for workers. They may raise the general level of the wage of workers to compensate for loss of penalty rates or they may create a safer workplace. A lot of the examples we have heard mentioned are about money that has gone into assisting developing safer workplaces.

These are not bad things. It is not a bad thing that a union takes the approach that they want the enterprise to benefit, to be profitable and to be productive, and that they are prepared to talk to their employees and employers to enter into those sorts of arrangements. That is the sort of thing that we want to encourage. We want to encourage enterprise bargaining arrangements of that nature. To slander and slag them like the Prime Minister does is totally disingenuous and frankly dishonest. What they are doing now is more evident too in their approach across the board to every issue in this space, such as penalty rates.

Of course we know that the government has completely vacated the field on penalty rates. They basically said: 'Fair Work Commission, we are not going to give you the benefit of government modelling, government analysis and government submission on this. You just fly blind and just listen to whatever submissions you may get from business. But we are not going to help with this because we do not care. In fact we want penalty rates to go.' And they backed that in. They supported the decision, as they announced, and made no submissions whatsoever. Then, to compound that, they went out there when we were talking about the minimum wage and the Fair Work Commission and said: 'We do not think that should go up either. In fact, we are happy to see that continually erode through inflation and lack of pay rises.' Of course, what we are seeing in that process is a steady erosion of the working conditions of Australians and record low wages growth. They are more than happy to sit back, fat, dumb and happy, and watch that process roll itself through and watch workers suffer.

In all of this, we have never seen one piece of modelling that shows that there is going to be more employment or wages growth through any of these measures. There has been no modelling whatsoever. The Treasurer is never able to answer those sorts of questions on any of these issues. There is no evidence, whatsoever, that any of the theories of trickle-down economics will work in any respect.

I have talked about the impact, for example, of penalty rate cuts on a region like mine, and of course rural and regional Australia in general. We know that 700,000 Australians in the lowest-paid workers category are going to lose significant elements of their pay, but the deep effect on rural and regional communities like Eden-Monaro is amplified much more. The McKell Institute analysed that impact. When we are talking about retail and hospitality workers in rural and regional areas, it is 18 per cent of the rural workforce. We also know that under their analysis, retail and hospitality workers in rural Australia losing penalty rates will lose between $370 million and $1.5 billion each year. What does that do to our regional economies? No amount of shuffling departments out of Canberra and across the nation will address the impact that just cutting penalty rates will make on rural and regional areas. It will reduce disposable income in those areas between $174 million and $748 million, the McKell Institute reveals to us.

In Eden-Monaro, retail is the second-biggest industry, employing 12,000 workers. Food and hospitality is the fifth-largest industry in my region, employing 5,286 workers. We are going to lose $16 million of disposable income in my region. That is going to hurt. Compounding that is the fact that this crazy decentralisation policy that the Nationals in the coalition are pursuing is going to devastate my region even further. We are suffering—as is the rest of the nation—from the casualisation of our workforce. We in Eden-Monaro are one of the most intense victims of that process. Look at that in the context of penalty rates: for someone who is working two or three days a week, it is the penalty rates that are putting food on the table and helping to pay the rent. Casualisation, penalty rates removal, decentralisation—it is all killing my region. All of the small businesses that benefit from the driving holiday makers from Canberra are suffering a hit. All of the workers that live across the border and in the conurbation that goes from Yass to Bungendore, Queanbeyan and Cooma are suffering from this crazy proposal.

The worst of that, as a person who is deeply interested and concerned about farmers, is that we are seeing the farmers losing support for what they have to do. They do not want the APVMA, for example, to be sitting there in the paddock next to them; they want them to be coming up with solutions to their issues. If you take the APVMA away from the CSIRO and the ANU, they are only going to get hurt in their capacity to deliver those answers. What we have seen is that most of the scientists—the people at the engine of the APVMA—will not do the move or will not be part of the organisation anymore. Not even the CEO will do the move. This move will cost $60 million during a time when we are supposed to be exercising budgetary restraint.

This decentralisation policy is just another example of the shameless political agenda and pork barrelling. As we know, Barnaby Joyce, the member for New England, is obviously the first beneficiary of the move of an instrumentality. It is clear that that is not a good idea. It is just moving jobs from one place to another; it is not creating new jobs. The sorts of processes we need to engage in in rural and regional Australia—the policies that need to be put in place to generate new jobs and new economies in the regions—are not even being considered and looked at effectively.

Mr Deputy Speaker, if you were a young person, how would you feel about this government in all of this process? They are not tackling climate change, so they are burning your future. They are ripping out the school funding. They are hurting you through the family tax benefits cuts. I mentioned the penalty rates situation. A lot of young people in my electorate—it is they who are going to be hurt most by that, along with women. You ask them and they will tell you, Mr Deputy Speaker. In all the surveys done in Eden-Monaro, 60 per cent support the retention of penalty rates. In Queanbeyan it is even higher, at 79 per cent.

As for Newstart, that is now off the agenda because we forced it to be off the agenda, but we know that the government want to go there again and they keep it in their back pocket. They will do it whenever they get a chance. With casualisation you know as a young person that you may never get a full-time job under this government. Obviously, that means you have no hope of ever being able to take out a mortgage. Of course, because the government will not tackle housing affordability, you have absolutely no prospect of ever being able to own your own home under this government. Along with all of that, the government also want to raise your pension age to 70. They still want to do that. That is a great prospect for our young people as well.

As a young person, if you want to go to university you are going to get slammed. Your university is going to get penalised, so it will not be able to provide you with an affordable education. If you want to grow the new economy you have be investing in the knowledge infrastructure. Not only is that being attacked but the participants from our rural and regional communities are being prevented from getting there through these measures. And, of course, we are not having the NBN out there to support you either in your need to do online studies or the rest. (Time expired)

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

I am pleased to rise and to speak on the Fair Work Amendment (Corrupting Benefits) Bill 2017.

It is quite a simple principle: secret payments are corrosive to institutions that ultimately require public confidence to function effectively. This bill basically deals with the secret payments made to unions and to union officials. The corrosive influence of these payments has been laid bare time and time again by numerous current and former union officials. We have seen evidence before the Heydon royal commission uncovering a raft of payments between unions and employers that were designed specifically to ensure that companies received favourable treatment from the unions.

Our government is committed to restoring integrity, fairness and transparency into the workplace in relation to these deals. It starts with requiring employers, union officials and unions to act with integrity, with fairness and with transparency in their dealings—especially for the workers to know exactly what those deals are.

We learnt a great deal from the Heydon royal commission about the secret side of these union deals. For example, the AWU received half a million dollars from the glass manufacturer ACI, which was laying off workers at its factory in western Melbourne. The employer undertook these redundancies without any response at all from the union. Another example revealed by the royal commission was the $300,000 that Thiess John Holland paid in relation to the EastLink freeway in Melbourne. This was an agreement between the AWU and Thiess John Holland, and according to the royal commission it involved false invoices.

A common thread throughout these deals is that the union involved was the Australian Workers' Union, and its leader at the time that these deals were done was of course none other than the Leader of the Opposition. Why was the AWU negotiating for workers building a freeway? You would think that the CFMEU would be working in the interests of those workers. However, we do know that the AWU basically muscled onto the CFMEU's turf, to build up its membership in order to bolster the influence of the member for Maribyrnong.

But that was not the last deal we heard about during the trade union royal commission. There is a wealth of information and documentation as part of that royal commission. As the Prime Minister referred to in his second reading speech, ACI operations paid the AWU in Victoria around $500,000 while they laid off workers at their Spotswood glass manufacturing factory. And what was that payment for? Well, the royal commission discovered that the invoice issued by the AWU was for 'paid education leave'. But actually, predominantly, it was used to offset a loan to renovate the union's Victorian office and other general union costs. It was not quite paid education leave.

What we do see here is a pattern of behaviour, which is why this legislation is so important. What we did see was yet another example of the AWU making shady deals. Another important one was the one they made with Clean Event. This was a deal where Clean Event paid the AWU $75,000 to maintain an enterprise agreement that paid their cleaning workers well below award wages and actually stripped them of their penalty rates. Now, penalty rates are something that we have heard a lot about, including from the previous speaker. Of course these are low-paid workers initially, and yet their penalty rates were traded away without their knowledge.

The Heydon royal commission basically said that there were savings to Clean Event. And of course the AWU did not just receive their $25,000 per annum payment. Probably what they wanted most was what they got in exchange: Clean Event provided lists of 100 purported members. We have heard so much from the Leader of the Opposition about penalty rates in the past that this particular case is extremely ironic. The payments were detailed in a secret letter—not one shared with the workers or the cleaners—between the AWU and Clean Event, and this letter was never disclosed to the cleaning workers. That is a prime example of a secret payment.

This is clearly a pattern; that is what the Heydon royal commission found. It was a pattern of behaviour. That is why the legislation before the House is so important for those workers and for the issues around transparency and fairness. This pattern of behaviour has very serious implications for unions and their members' confidence in their leadership. How could those Clean Event workers trust their union leaders when this is the deal they did without their knowledge, without transparency?

Figures show that just one in nine employees in the private sector are union members, so how can anyone in this House be surprised when we and employees hear about these types of deals? They would ask, 'Why should we join a union when we see what happened to those Clean Event workers?' They were some of the lowest-paid workers in the nation and they were literally sold out by the union that they were members of and by the leader of that union. The ACTU may wonder why membership is so low; well, there is a prime example.

The royal commission uncovered even more evidence of secret payments, and of course the AWU was involved in these again. As I said, it is a perpetuation of the pattern. Winslow Constructors was caught in the AWU's web of secret payments. In his final report, in a chapter entitled 'AWU and Winslow Constructors', Justice Heydon sets out in great detail the payments made and what they were for. And this actually was an arrangement that went from back in the 1990s right up to 2000. Justice Heydon set out the false invoices stated by the AWU as 'training' but entered into the AWU's own accounting system as 'membership income'. Evidence given by witnesses from Winslow Constructors indicated that no training was provided during the time in line with the information in the invoices.

The former state secretary of the AWU and the chosen successor of the Leader of the Opposition gave evidence that there was 'no sound basis for concluding that no training was provided' and asserted that, because the AWU provided training, 'one would not conclude that it was not provided to Winslow'. In other words, because the AWU provided training, it was provided to Winslow as a matter of course. That is a very interesting hypothesis!

The royal commissioner found:

These submissions are all unpersuasive. They are at odds with the contemporaneous evidence …

'Unpersuasive'—that is very strong language for a former High Court judge. The commission found that the successor of the Leader of the Opposition was instrumental in creating the false invoices. The evidence was accepted by Justice Heydon that Mr Melham was involved in the secret payments from Winslow to the AWU. He personally directed the creation of knowingly false invoices and maintained this practice from the time he was secretary of the Victorian branch.

This legislation will make these types of deals illegal. Given the history, it is not before time. It is not before time for the workers at Clean Event. It is not before time for each of the workers in the cases I have mentioned. The Winslow Constructors payment incident and others are clearly a pattern of behaviour. That is why the legislation is so important. It is to break that pattern and to give the employees and the union members confidence.

Employers participated in these arrangements, and the commission clearly draws the inference that companies participated for a number of potential reasons: because they expected to gain more flexible or cheaper employee pay or conditions, to win jobs or perhaps to avoid strikes and other industrial disputes. I think this is what in the movies is termed a 'shakedown'. Companies pay these secret deals to get either a cheaper workforce or industrial peace. Clearly, in light of what we saw in the royal commission, there is an urgent need of reform, which is why this bill is so important.

This legislation is a direct outcome of the royal commission. In volume 5 of the report, chapter 4 is entitled 'Corrupting benefits' and sets out what it believes should be reformed to ensure that these practices are eradicated. The commission said: 'The problems are longstanding. They are inherently intractable. There is every incentive to preserve secrecy.' The report summarised the targeted reforms: '(1) that registered organisations and branches be required to disclose certain payments made to them; (2) that a Commonwealth corrupting benefits offence in relation to officers of registered organisations be enacted; and (3) that employers be prohibited from making any payments to an employee organisation, including certain classes of payment.' This is precisely what the legislation we are debating here does, along with the Registered Organisations act.

These laws will equally apply to employers. Whether you are offering or paying a benefit, or soliciting or receiving it, all participants will be accountable, as they should be. It is about fairness. It is about transparency. The penalties in this bill are certainly part of what we need to achieve. The legislation will help clean up the unfair, secretive and often corrupt payments that we have seen come to light in the Heydon royal commission. It will go to restoring integrity and fairness to workplaces. It is going to give some confidence to a whole lot of workers, which is what this is about and should be about. As I said at the start of my speech, it is quite a simple principle: secret payments are corrosive to institutions that ultimately require public confidence to function effectively. Our government wants to restore that public confidence in these institutions and ensure that they are run fairly and in accordance with the rule of law.

Debate adjourned.