Carol Brown (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

On behalf of the Chair of the Joint Standing Committee on Electoral Matters, I present the report, Review of the AEC analysis of the FWA report on the HSU, together with the minutes of proceedings of the committee and the transcript of evidence.

Ordered that the report be printed.

by leave—I move:

That the Senate take note of the report.

In this report the committee makes 13 recommendations to improve Australia’s disclosure arrangements and to enhance the transparency of the flow of money through our political system.

During this inquiry the committee reviewed the Australian Electoral Commission’s—the AEC—analysis of the Fair Work Australia—the FWA—report on the Health Services Union national office. It also considered a list of matters provided by the AEC as possible measures to improve the operation of the Commonwealth Electoral Act 1918.

The committee’s focus was on disclosure obligations under the Electoral Act. It was not the committee’s role to forensically examine internal HSU authorisation processes, or to adjudicate on alleged contraventions against the Fair Work (Registered Organisations) Act or other alleged fraudulent behaviour.

This was outside the committee's terms of reference. A number of other processes are underway to address those matters.

The committee considered 17 possible measures provided by the AEC for consideration and supported most of these measures. A number of the recommendations made in this report have been made in previous reports, including to:

Changes to the penalties for breaches of the Electoral Act are also needed. The committee has recommended introducing administrative penalties for more straightforward breaches, such as a failure to lodge a return by the due date. This will enable the Australian Electoral Commission to deal more effectively with these types of offences. The committee has also recommended strengthening the penalties for the more serious offences, including those involving fraud.

In this inquiry it was clear that the category of ‘associated entities’—which requires disclosure by certain organisations with close links to political parties—is confusing and is not operating as effectively as it should. To address this, the committee recommends clarifying the definition of an ‘associated entity’.

A significant reform the committee is proposing is to deem registered parties as bodies corporate for the purposes of the Electoral Act, to better focus the responsibility for breaches on the parties. It is intended that this will encourage political parties to ensure that the person tasked with lodging returns is suitably qualified to perform the role, and that effective systems are in place to ensure a complete and accurate return is lodged.

Another gap in the current arrangements is in the current disclosure period for new candidates, which only commences from their preselection or nomination. The committee has recommended introducing a requirement for new candidates to disclose relevant donations and gifts received and money spent in the 12 months prior to their preselection or nomination.

There were certain measures that the committee did not support, which were:

In developing its recommendations, the committee aimed to strike the right balance between the goals of transparency and accountability, and the administrative realities for the parties, organisations and individuals with reporting obligations. The committee believes that these recommendations strike the right balance.

On behalf of the committee I thank the organisations and individuals who assisted the committee during the inquiry through submissions or participating at the public hearings in Canberra and Melbourne. I also thank my colleagues on the committee for their work and contribution to this report, and the secretariat for their work on this inquiry. I commend the report to the Senate.

Scott Ryan (Victoria, Liberal Party, Shadow Parliamentary Secretary for Small Business and Fair Competition) Share this | Link to this | Hansard source

Before I commence my remarks on this report by the Joint Standing Committee on Electoral Matters I would like to specifically thank the secretariat of the committee. I have on one occasion run out of time and failed to do so. The secretariat of the committee has done a fantastic job in assisting the work of members of the committee.

I want to point out a few very important differences with respect to this report. Senator Brown talked about 'the committee', but we need to make it clear that it was the Labor and Greens members of this committee that supported these recommendations. It is the Labor and Greens members of this committee that do not see a problem with the way this investigation was conducted into the incidents and the scandal about the Health Services Union. This was a limited inquiry into that. Firstly, the evidence that we were presented with as members of the committee, the Labor and Greens majority on this committee have prohibited us from presenting to this parliament. Let us make this clear. The evidence that we were presented with to consider this particular issue: the Labor and Greens majority on this committee has prohibited me informing my fellow senators about that evidence. That places an extraordinary limitation on the validity of this inquiry.

On another matter, we have a situation where the Australian Electoral Commission was presented with more than 500 pages of evidence and asked for a final response to that, and did so in less than 72 hours. Those 500-plus pages are enormously detailed for the AEC to be given a couple of days to respond to and have not given us, as non-government members of the committee, an opportunity to consider the detail of that response. Furthermore, the opposition members of the committee did seek to have another hearing with the Australian Electoral Commission to discuss the response to those 500-plus pages of reports and that opportunity was denied to opposition members of the committee by the Labor Party and the Greens party majority.

They are all issues about the inquiry. There is one other thing is missing in this discussion. We can discuss time and time again the scandal that is the Health Services Union and the misuse of members' money. We get hung up on procedural issues and on whether there were technical breaches or the process of the investigation. And we sometimes forget there is no contest that the money of thousands of members of trade unions, often low paid, was misused. We know that. No-one has come into this chamber or the other place and defended the use of members' money by a member of the other place and the management of the Health Services Union.

I would like to highlight several aspects. Senator Brown in her presentation of the report did talk about the flaws with respect to the associated entities laws. There is a profound flaw in this, and that is that while the state branch of the Health Services Union is considered an associated entity because it sends delegates to a conference of the Labor Party in this case, the missing part of this law is that the national office of the same organisation is not considered an associated entity. That is a major hole in our electoral administration because it provides not only the incentive but the opportunity for a state branch of a union to simply shuffle money to the national office of the union which can then be spent in any particular way and not be covered by the associated entity regime. That is a real hole in our law. It is a recommendation that we have highlighted before and made recommendations about before, but the Labor Party refuse to even acknowledge it. They have not addressed it, they do not acknowledge it and their recommendation does nothing to deal with that problem.

We know why. It is because of the second point I am going to raise, and that is the AEC's use of its audit powers. It disturbed me when I found out in the course of this inquiry that from 2007 until 28 August the Australian Electoral Commission had conducted 256 audits of political parties and associated entities but when we asked a very simple question—'Can we see the list?'—something became very apparent, and that was that only one of those was a trade union. That is one out of 256 in five years. Let us go through some of the organisations that were audited. The Lady Wilson Foundation was audited twice. The Blue Ribbon Foundation was audited. And the Australian Democrats, somewhat smaller in 2011 than the contribution played by trade unions. In the annexure to the opposition's dissenting report there is this list. What we have here is that the only trade union that was audited was the HSU East, and only after that issue hit the newspapers and became a matter of public debate.

That was profoundly disappointing. I am being very careful with the words I use here. It concerned members of the opposition and I think it highlights a significant flaw in the culture of the Electoral Commission. We were given a number of reasons for this—it is all in the Hansard of the hearings. Firstly, we were told that Fair Work Australia does it, as though that somehow removed from the Australian Electoral Commission the responsibility to administer the law with which it is charged. Those laws for Fair Work Australia, we now know, did not work, because it did not uncover this scandal; it did not prevent the misuse of HSU members' money. We would not want to wake up after an election and find out that there had been similar flaws in the management of the finances of an election campaign. It is also a different regulatory environment for a different purpose. Fair Work Australia does not serve the purpose of the electoral law.

We heard the Electoral Commission say it had had no additional resources provided since the changes to the law in 2006 that brought trade unions into the associated entity regime. That is no excuse. It is no excuse to say, 'Well, you'd didn't give us any extra resources, therefore we are going to audit just one side of politics,' even if that happens simply by inertia rather than by intent. When the law changes, the behaviour of the statutory authority should change. When the law changed, the Electoral Commission should not have said: 'We don't have any extra resources; we're going to continue with what we've done.' It should have divided those resources so the appearance of neutrality was immediately apparent to anyone who looked at this list. Only one union was audited out of the 256 audits of organisations. Some of the organisations that were audited donated less than $10,000 over the period in which they were audited, yet we had unions donating in the millions over a five-year period. The Electoral Commission had no answer.

The Electoral Commission had a series of other excuses, such as there sometimes being money shuffling between political parties and associated entities. That is true, but we are looking at amounts of money that are tens of thousands or hundreds of thousands of dollars less than the same money shuffles that go on between members of political parties—that is, trade unions—and the Labor Party. We have groups that do nothing but fundraise a few thousand dollars in an electoral cycle. If they support a candidate they are dragged into the associated entity net. But the shareholders of the Labor Party—we are not talking about people who just donate money; we are talking about organisations with which many in this chamber are very familiar—who are effectively voting shareholders in one of the major parties in this country, who send along slates of delegates, who donate hundreds of thousands of dollars to the Labor Party either in membership fees or donations for campaigns and who then run other campaigns on top of that were not audited by the AEC. It did not audit even one of them.

The reason I am being careful with my words is that I do not want to assign a motive to that behaviour. I do want to highlight that continued behaviour like that will draw into question the faith of one side of politics in the fair and impartial administration and use of AEC resources. We cannot go on and find out in another five years that out of another 250 audits the Lady Wilson Foundation has had another couple but the HSU, the CFMEU, the AMWU or any other part of the alphabet soup that makes up the other side of politics has not been audited. That is a real worry. Anyone who dismisses it does not put enough value on having an impartial electoral commission.

Senator Brown also mentioned the series of Labor Party recommendations in this report. None of them relates to anything we heard before the committee. These recommendations are rehashed from previous reports written by the government that are aimed at lowering the donation thresholds. We know that leads to intimidation of donors, as happened with people who might have sparked up and talked about school halls. There was no evidence whatsoever before the committee that said the donation threshold needed to be lowered from $12,000 to $1,000. There was plenty of evidence before the committee that said credit cards are a route to electoral fraud, because we cannot trace cash withdrawals. There was plenty of evidence before the committee that there had not been auditing of trade unions. This report from the Labor Party should not be taken seriously.

Concetta Fierravanti-Wells (NSW, Liberal Party, Shadow Minister for Ageing) Share this | Link to this | Hansard source

I too rise to make a contribution to this debate on the report by the Joint Standing Committee on Electoral Matters. I am indebted to the clerks for providing me with a copy of the report, because there do not seem to be too many available. I am not surprised, because this Labor-Green report is really not worth the paper it is written on.

I come at this from a different angle from Senator Ryan, who spoke about the AEC in particular. We know that a donor who has made gifts to candidates and political parties in relation to an election within a disclosure period—in the case of Mr Craig Thomson that was between 13 April 2007, the date he became endorsed as a candidate, and 24 November 2007, the election day—is required to file a donor annual return setting out the amounts or values of those gifts. The monetary threshold for that disclosure was $10,300 in 2006-07 and $10,500 in 2007-08. The dissenting report by coalition members of the committee sets out our concerns in relation to that.

How can this report be taken seriously, considering the lack of material that was made available to the Australian Electoral Commission in relation to its investigation?

It is very clear here that it did not see a very pertinent report, which is the BDO Kendall report, which was the first report that was done when the HSU national secretary first became aware of these inconsistencies. Certain reports were undertaken and there was a referral by Slater and Gordon to BDO Kendall, who, forensically, based on the documents that they had available, prepared their report.

I find it appalling that the AEC did not have access to all the documents that were available to Fair Work Australia. It meant that they were only able to undertake a paper analysis of this whole situation. We have material that is in the public arena but we also have material that potentially could come to light if this government stopped hiding the annexures to the Fair Work Australia report. As I have said to the Senate, the Fair Work Australia report has seven lever arch folders of attachments to that report, which are integral to that report, but which the Australian Labor Party refuse to release. Senator Marshall has stood up in this place and given us some pithy reason as to why they should not be. Reports that are released to the Senate or to Senate committees have attachments to them. In this case, there are seven lever arch folders of documents. So why should they not be released? They are an integral part of the Fair Work Australia report, therefore they should be released.

But I have been trying since May this year to have those documents released. After I first sought access to the documents I was only able to attend at the office of the committee to read these reports. This is an appalling way of doing business in this place, but it is very clear that those documents will never see the light of day. It is little wonder that they were not shown to the Australian Electoral Commission. Those documents will never see the light of day because they tell an absolutely appalling story of the conduct of the HSU and of Mr Thomson in his activities.

It is very clear that if those documents were released and if somebody forensically went through them they could find information that is currently not available in the public arena. They could also disclose, after proper scrutiny, whether there were other matters which required further investigation of Mr Thomson's activities that have not been investigated to date. After the release of the Fair Work Australia report, we saw another chit or further expenses come to light, which demonstrated that Mr Nassios in the Fair Work Australia investigation which was undertaken had not picked up. It is possible that a forensic assessment of these documents could disclose further evidence of mismanagement, further evidence of Mr Thomson's activities or, indeed, further evidence of the activities of other persons.

As I have said, having had the benefit of reading all documents in all seven lever arch folders, to me, it is not surprising why the Australian Labor Party will do everything humanly possible to ensure that those documents never, ever get released, because those opposite have something to hide. That is why those documents were not released and why those documents have not been provided to those persons and those bodies which have been investigating anything to do with the HSU matter.

What does that tell you about those opposite and their Green alliance partners? Yes, you come in here daily, complaining about access. When the Greens have not been provided with documents they come running in here, complaining about freedom of information and access to documents and all sorts of things. But when push comes to shove you will always do what you did last time and that is vote with the government to preclude important information being disclosed to the Senate to allow the senators and this parliament to properly do their work. So it does not surprise me that this report is not worth the paper that it is written on. There have been cash withdrawals and thousands and thousands of dollars have not been disclosed.

In estimates hearings I asked the Australian Electoral Commission questions about the activities of Mr Thomson, Ms Criselee Stevens—his partner in crime when they set up Coastal Voice—and Matt Burke, who subsequently was put onto Senator Hutchins' staff. These people were paid out of HSU funds. Interestingly, I was able to find out a whole lot of information in relation to Coastal Voice but, lo and behold, the Australian Electoral Commission was not able to find out the information. And, of course, oh deary me, the time passed and therefore the Australian Electoral Commission could not undertake the relevant prosecutions that would have been and ought to have been properly undertaken into the failure by those opposite and, in particular, by Mr Thomson to disclose relevant expenditure that was directly related to his election as the member for Dobell. Thousands and thousands of dollars were never, ever disclosed and, in the end, the time passed and Mr Thomson walks off and then has the audacity to say that he has been vindicated.

Well, excuse me! It is obvious that the Australian Electoral Commission certainly did not do its job properly in the first place and, in this instance, should have been provided with all the documents.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

I do not particularly want to speak to the report. I will just respond to some of the allegations Senator Fierravanti-Wells made in relation to the release of the supporting material to the Fair Work Australia report. I want to directly respond to some of those things because it is so typical with the Liberals that, when they do not get their way, they see a conspiracy and try to make political grandstanding out of what were very carefully considered decisions that were made, particularly by the Senate Education, Employment and Workplace Relations References Committee.

So let's be very clear: when the committee got the Fair Work Australia report into the HSU, it released it virtually immediately—as soon as it was practicable to be released. When the report was able to be uploaded onto the committee website, it was. There are many volumes of documents of supporting material for that report, but it is the Fair Work Australia report itself which is a distillation of all that material. That material contains many documents that name different people—people who are not the subject of any allegations and who are not public figures—and it would be an incredible breach of privacy if this committee simply uploaded what I think amount to tens of thousands of pages of receipts, letters, minutes and a whole range of other supporting material that have been distilled and summarised in the actual Fair Work Australia report, which is made public.

We know that all that supporting material has been handed over to the relevant authorities: the Commonwealth Department of Public Prosecutions and also the New South Wales police and the Victorian police. While there are currently no proceedings afoot, I am certainly concerned that the potential exists for continued detailed public canvassing of the matters contained in the documentation to become a factor in whether proceedings are in fact instituted in the future and for any such proceedings to be prejudiced by the release of those documents in the form that Senator Fierravanti-Wells is suggesting. Such an eventuality is of great concern, and I have no desire to contribute to a situation where the allegations that have been made and the evidence which underlies them is not tested before a proper forum. If charges are going to be laid, all those things should be tested in the appropriate place, and that is a court of law. I would not want to be party to doing anything which may in fact undermine that proper course of action. That is the proper course of action, and that is the approach the committee took.

So I reject outright the allegations that Senator Fierravanti-Wells has made in respect of those documents. They are simply not true.

Question agreed to.