Craig Kelly (Hughes, Liberal Party) Share this | Hansard source

I rise this morning to speak on the Fair Work Commission (Corrupting Benefits) Bill 2017, but I do so with a heavy heart—as we all will today—for obviously we have just heard the news in the last few hours of another most appalling terrorist atrocity conducted at a concert in Manchester, where 19 people are known to have died and 50 more are injured. We know that many of these people are young, innocent children and teenagers. In this parliament during all of our speeches today we will be sending our prayers to those injured, to the nurses and doctors fighting to save lives as we speak and to the families trying to find and make contact with their loved ones. We send our prayers and our strength to our law enforcement officials who continue the fight against terrorism.

Back to the corrupting benefits bill. In his classic work, Free Market Economics, Professor Steven Kates has written:

An economy works best where the population at large is disgusted by corrupt practices and refuses to accept dishonesty at any level. Those who act in a dishonest way need to be culled from the normal activities of economic life.

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Where dishonest practices become the norm, especially where dishonest and corrupt government practices are common, no economy can expect to succeed. Corruption regularly drains away the potential profits of a successful business. It bleeds business dry and vastly reduces the incentives for productive economic behaviour while limiting the ability of business to finance innovation and internal growth.

An ethical honest population is a necessary part of any successful economy. Whether it is in employer-employee relations, in the dealings between one business and another, or where it is governments involved with business, honest and fair dealing is essential. Acceptance of corrupt practice as just one of those things that no one can do anything about may be facing the inevitable, but it will condemn a society to economic stagnation.

That is why this bill is important, because we have seen examples of corrupt practices uncovered by the Heydon royal commission that have simply become standard practice. These practices were where there have been a raft of payments between unions and employers that were simply designed to ensure companies got favourable treatment from the unions. The royal commissioner himself called these payments 'corrupting benefits'. These payments are often disguised by false invoices, marked as payments for training or similar. They are made as part of a deal in enterprise agreement negotiations or accompanied by a list of employee names who are secretly joined to a union.

Some officials, the royal commission found, were paid private kickbacks for their personal gain. One CFMEU official used free building materials and labour to renovate his home in Brisbane. An AWU official used funds to buy an investment property and to renovate a house. Some officials used threats to pressure employers to pay the money in order to bolster union coffers. We know of a CFMEU official, documented at the trade union inquiry, who demanded cash for working in Canberra. A New South Wales CFMEU official demanded that employers pay 'donations' to drug and alcohol rehabilitation funds which were secretly siphoning money to the union. Others extracted payments to bolster their status and power—particularly, sadly, within the Labor Party. We must rule these practices as corrupt and unacceptable.

Let's just have a look in further detail at some of these corrupt practices that were uncovered by the Heydon royal commission. Thiess John Holland paid the Australian Workers Union $300,000 plus GST while they built the EastLink freeway extension to Melbourne's eastern suburbs. The Australian Workers Union issued false invoices, disguising payments as training, back strain research, Australian Workers Union magazine advertisements, forum tickets and conference sponsorships. But none of these actual so-called benefits were actually paid or provided. The payments were never disclosed to the Australian Workers Union members or their employers.

A second example: ACI Operations paid the Australian Workers Union around $500,000—half a million dollars—while they laid off workers at their Spotswood glass factory. The Australian Workers Union invoiced these payments as 'paid education leave'. But the payments were not used for that purpose; they were used, predominantly, to offset a loan to renovate the union's Victorian office and other general union costs.

Another example: the infamous Clean Event, which paid the AWU in Victoria $75,000 to maintain an enterprise agreement that paid cleaning workers well below award rates and stripped them of their penalty rates. That is right, Mr Deputy Speaker, the union stripped them of their penalty rates and at the same time were taking a backhander of $75,000 from the company knocking off the penalty rates for workers, without letting them know. The payments were detailed in a secret letter between the Australian Workers Union and Clean Event. As I said, this was never disclosed to the workers. Level 1 casuals working at Clean Event were entitled to 176 per cent more per hour under the award than under the agreement sealed by these payments.

Another case: Unibuilt paid one union official $32,000, and that money went to fund an election campaign. And that was paid while the company was negotiating an enterprise agreement with the AWU. I see the member for Bendigo at the bench, and the member for Bendigo said words during this debate—and I hope I quote her correctly—that the Labor Party is against all forms of corruption; they are against all forms of union corruption and they will not tolerate it. The question for the member for Bendigo is: if a union official is in negotiations with a company, negotiating on behalf of the workers, and that union official receives a payment of $32,000, which they put in their pocket and they use for their own personal benefit to run their own personal election campaign without telling the workers, is that a corrupt practice? This is the question that the Labor Party have to answer.

Those opposite can stand up in this parliament and say, 'Oh, we're against all these corrupt practices,' but they have to say whether they consider that that practice is acceptable. Of course, we will hear nothing from the Labor Party on that. Then we have another example. Chiquita Mushrooms paid the AWU in Victoria $24,000 while it was casualising its workforce. The Australian Workers Union falsely invoiced the payments as paid educational leave and never disclosed it to the Chiquita employees. These examples go on and on and on. We have to say that these examples show that the current regulations are not working.

If I am paying a lawyer to negotiate a contract on my behalf, I expect him to be working exclusively for my benefit. If he is copping a backhander from the person he is negotiating with, trying to get the best deal for me, that is a combination of a secret commission, a bribe and extortion. That is illegal—and so it should be. If a union is negotiating on behalf of hardworking Australians and they are getting backhanders or kickbacks, for whatever purpose, they should fully disclose that to those workers. That is what this bill is trying to do. The Labor Party come in here and say that they are against all these practices, but not one single member of the opposition has stood up and said that a union official getting $32,000 from a company he is negotiating with on behalf of the workers and using that to fund his election campaign is a corrupt practice. Well, shame on the Australian Labor Party.

But the coalition is getting on and fixing this. In this bill we are responding to recommendations 40, 41 and 48 of the royal commission into trade unions. By amending the act, we will make it a criminal offence to give a registered organisation or a person associated with a registered organisation a corrupting benefit. We will make it a criminal offence to receive or solicit a corrupting benefit. We will make it a criminal offence for a national system employer, other than an employee organisation, to provide, offer or promise to provide any cash or in-kind payments, other than certain legitimate payments, to an employee organisation or its prohibited beneficiaries. We will make it a criminal offence to solicit, receive, obtain or agree to obtain such a prohibited payment. We will require bargaining representatives for proposed enterprise agreements—employers, employer organisations and unions—to disclose all financial benefits that the bargaining representative or a person or body reasonably connected with it could, or could reasonably expect to, derive because of a term proposed in the agreement. Failure to comply with these agreements will give rise to civil remedies but will not preclude agreement approval in the enterprise agreement.

We have seen many examples recently where unions have agreed to slash the penalty rates of workers. We hear the Labor Party complaining about penalty rates being cut, but no-one has cut penalty rates in this country more than the unions. So it is only fair, if union officials are going to agree to cut penalty rates of workers, that those workers know that that union official is not copping a backhander; that they are not getting some form of secret commission; that they are not getting $32,000 to fund their election campaign to run here in federal parliament; that they are not being paid to have their house renovated.

Workers deserve every cent that they get. It should not be siphoned off by corrupt trade union officials. That is what we need to address and we are addressing in this bill. The criminal penalties for payments with the intent to corrupt under this legislation will be a maximum of 10 years in prison and a fine of $900,000 for an individual or $4.5 million for companies. Maximum penalties for other illegitimate payments will be two years in prison or $90,000 for an individual or $450,000 for companies.

Most importantly, if those on the Labor Party side think these payments are legitimate, let us have full disclosure. Let us have the disclosure, so that if you are working for a union and your union representative is out negotiating on your behalf, and he gets paid $32,000, that should be disclosed to the union members. Ultimately, that money has to come from somewhere. It either comes from the company or, more likely, it comes from the union workers themselves. It comes from the workers' pockets. It is money that could have otherwise gone to those workers to give them more pay. We have seen too many examples where that money has ended up in the pockets of corrupt union officials. This is a fair bill. This is a needed bill. I commend it to the House.

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