Thursday, 14 February 2019
Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018; Second Reading
It is a great pleasure to make a contribution to the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018 debate in the House. I speak on behalf of my colleagues, who I know share a strong interest and a passion in fighting corruption in Australia—in business, in government and everywhere we might find it. We deal with a lot of bills in this House that feel esoteric and far from the lives of ordinary people, but this bill is actually crucial to things that we see on the front pages of our newspapers every day at the moment—in particular, uncovering businesses who are doing the wrong thing and are hurting people in our society. The bill before us provides some additional protections for people who are working in those organisations, or who are exposed to that kind of misconduct, and want to blow the whistle. It provides a better framework around how they can make a disclosure about something that's going on and make it in a way that's protected.
I note the minister's speech on the bill. He didn't mention a few pertinent facts. One of them is the long journey that the government has had to go on to get the bill to the state that it's in today. Those who are paying attention to the detail will note that the bill originated in 2017, so we've spent a bit less than two years, actually, sitting on this bill in the parliament and trying to force the government to make significant change in this area, because that's actually what's required. The truth is that the law as it stands today doesn't provide proper protection for whistleblowers. I'll speak about some of the stories of whistleblowers who have gone through the current regime. The lives of some of these people have been destroyed by what's happened to them since they made a disclosure, when all they were doing was trying to act in the public interest. We've got a system in place today where they saw a wrong being done, for the benefit of the public they tried to come forward and the law didn't protect them. They lost significant things; they had mental health issues; they faced financial implications that have been severe and long-lasting for their families—and we just don't want that. Of course it's in all of our interests that we actually have a protective system for those people. We need them to come forward, we want them to come forward and we need to provide them proper supports to come forward.
I will explain also in my comments about the bill some of the deficiencies that we continue to see in the whistleblowing system that have been left in place by the government. There are really big ones. People who watch this area of policy will know that Labor not so long ago announced a big reform package of things that we would like to change that relate to whistleblower protection, and those are things that a Shorten Labor government would do if we were elected to office. Those things are really important to us as Labor people. Everywhere we turn in our society today we see organisations and corporations who are sometimes doing the wrong thing and not properly being held to account. If we want to stop that kind of conduct, we have to encourage whistleblowers to come forward and we have to be able to look them in the eye and tell them that we, as lawmakers, as people who have a role in the legal system, have provided a way for them to do that without threatening everything they care about.
Before I get into the detail of the bill before us, I want to acknowledge some of the incredible stakeholders who work in this area, who have contributed to pushing the government to the point they've got to and also helping Labor understand what the big issues that remain unsolved in this area are. I want to note the incredible Jeff Morris, who's become something of a celebrity recently. Those watching at home will remember Jeff Morris as one of the first people that blew the whistle on some really problematic behaviour in the Commonwealth Bank. I think most of us in this House would acknowledge that, were it not for people like Jeff Morris, who risked everything they had to call out behaviour that they knew was wrong, we wouldn't have had a banking royal commission. It's actually those incredibly brave people who risked everything, who don't stand in a chamber like this—where it's our job to get up and talk about issues that are problematic in society—but are just normal people going about their business. That man took an incredible risk and he paid an extraordinary toll. If you haven't met Jeff Morris before, google him and read some of the interviews and articles, because he is the case study for why we need to encourage more people to come forward, but we need to be able to provide a system that protects them. I think we'd all acknowledge that the law was not where it needed to be when Jeff Morris made his disclosures and that some of the things that have happened to him should never have happened to him.
I want to acknowledge a couple of other groups and individuals who are really active in the policy discussion about this area of law. Professor AJ Brown is one of those individuals and is known to many legislators in this parliament. The Law Council of Australia engaged very strongly in all of these debates and discussions. Transparency International have been very active. Also, the Australian Council of Trade Unions have worked very hard to push whistleblowing regulation further in Australia.
Labor has a really longstanding commitment to enhancing whistleblower protections. In fact, I think in this area of whistleblowing you see on both sides of politics essentially a continuation of our fundamental beliefs about this kind of law. In government, we introduced the landmark Public Interest Disclosure Act 2013, which provided a whole new suite of measures to protect public sector whistleblowers. As I mentioned just a few weeks ago, we announced that a Shorten Labor government, if elected, would completely overhaul whistleblowing laws in Australia and introduce a range of really substantial, positive law reform. We are committed to strengthening protections for whistleblowers and we're going to continue to push the government to up its game in this area.
I mentioned that this bill was introduced into the parliament in 2017. The bill, which was first proposed by the government, was nowhere near where it is today. It was quite a weak and ineffective bill. Indeed, it failed to match the substance and detail of the whistleblower protections included in the Fair Work (Registered Organisations) Amendment Bill 2014, and it fell short of providing the protections that whistleblowers need and deserve. I mentioned Professor AJ Brown earlier in my remarks; he is a world expert in whistleblowing laws. His commentary on the government's original proposal was to describe the original bill as 'a limited step, more a sideways rather than a forward step on key issues'—not exactly a glowing endorsement.
The member for Mayo is in the chamber at the moment. Centre Alliance were quite critical of the initial bill and worked with a lot of stakeholders to successfully drag the government to where it's arrived at today in the chamber. So it's a bit frustrating that we didn't start there, but, of course, as Labor people, we don't let the perfect be the enemy of the good, and we're glad that we're at a spot where we've got some good reforms that we can support. They don't go nearly far enough, but we are seeing improvements.
The way in which this debate has transpired and the slow and plodding manner with which the government has marched to the position they've finally reached here unfortunately does replicate a range of instances where the government has been slow or unwilling to react to corporate misconduct. One of the best examples, for sure, of that at the moment is the way that the government reacted to calls for the banking royal commission. In the chamber, we saw them vote against the banking royal commission 26 times. For 600 days, not only did the government say it didn't want a banking royal commission, but it really pulled out every trick in the book to stop it from happening. The number of ancillary inquiries and little bits and pieces of law reform that were put in place just to stop the actual probity of a royal commission is really embarrassing. If only they fought as hard for Australians to access health care and education as they do to protect the big banks from proper accountability.
They were wrong on the banking royal commission and they were wrong about whistleblowers, and both times they had to be dragged into action. I want to quote Jeff Morris here, whom I mentioned before, who stated:
I guess I see this as a bit of a parallel thing to the banking royal commission, where the government's finally, kicking and screaming, bowed to the inevitable and had a banking royal commission …
One of the best ways we can ensure that misconduct in corporations is prevented, detected and punished is to have strong, effective whistleblowing practices. I said before that we probably wouldn't have a banking royal commission if we didn't have whistleblowers like Jeff Morris who were willing to make disclosures under a regime that didn't provide proper protections. And there are lots of instances where corporate misconduct that's probably occurring right now wouldn't be occurring if we had a better regime in place.
For too long, whistleblowers have been silenced. They've been subject to reprisals, to harassment, to absolutely appalling treatment, often by the employer who is doing the wrongdoing and trying to shut them down in some way or another. The current system operates as an enormous disincentive for whistleblowers to come forward. I have sat down with people who have blown the whistle before and who act as a support network for other people who see the type of wrongdoing that we're discussing today. They've said to me that when a whistleblower comes to them and says, 'I've got a disclosure: I can see that some illegal conduct is occurring in my workplace; what do I do?' the experienced whistleblower will say to them, 'Are you willing to lose everything?' That's actually the threshold test: are your values going to drive you so far that you're actually willing to sacrifice everything that's important to you to blow the whistle?' And I have to say, I think there are a lot of us who wouldn't go ahead because we care too much about those things. That's not just bad for whistleblowers, of course, who have to sit there and know that misconduct is occurring and aren't really able to do anything about it; it's absolutely terrible for all of us as Australians, because it means that the kind of mistreatment, law-breaking and misconduct that's been going on in those big organisations and big companies is allowed to proliferate and continue.
So, we need whistleblowers to come forward to help our regulators and law enforcement agencies to detect and punish this conduct. Jeff Morris has argued that whistleblowers are 'the last line of defence in corporate governance'. That's why Labor believes so passionately that we need to be doing a lot more—this bill, but a lot more—to protect those people and encourage them to come forward.
I will turn now to some of the elements of the bill that I want to draw to the attention of the House. The government amendments that were moved in the Senate significantly improve that original bill that was put forward in 2017. I want to acknowledge the work of Centre Alliance in improving that bill. There's no way the government would have come to this position on their own. They had to get the votes of Centre Alliance in the Senate, and they were able to make a deal, and that involved improving whistleblower protections. The political process isn't always pretty. It doesn't always look how we want it to look. But the reality is that we've arrived here with a better bill than we had in 2017.
The most important amendment that the government made to this bill in the Senate was the amendment to allow whistleblowers to make a claim for compensation when a body corporate breaches a duty it owes to the whistleblower to present a third person engaging in detrimental conduct towards them. This is really expanding the scope of protection and compensation where bad things are done. The law can't always undo them, but we can provide some type of recompense to the person who has been hurt. Again, in the conversations that I have had with whistleblowers, every time I speak to a whistleblower I hear over and over again how they suffered from reprisals and victimisation from colleagues and how their workplaces failed to protect them. The duty that I've described here, which is now contained in the bill before us, will make it really clear to companies that they need to protect whistleblowers—that that's actually their duty.
The amended bill will also ensure that a court making a compensation order considers the period a person is likely to be without employment when they lose their job for whistleblowing. This is really important, because we know that some people can suffer such severe reprisals when they try to blow the whistle on the corporation they're employed by that they might never work again. There are multiple instances where companies that are upset because an employee has blown the whistle on them have created a situation where that person can never work in that industry again. If it's a bank, for example, they might go to every other bank CEO in the country and say, 'Don't employ this person.' They might make things up. These are the sorts of instances that were the subject of the committee inquiry that was done on this bill. This bill allows us to properly compensate that person. If they are literally never going to work again as a consequence of the decision they made to blow the whistle, then it's possible that under this new law they might be compensated for that time.
The bill only goes some way towards protecting whistleblowers, so Labor welcomes the requirement for a post-implementation review of the amended whistleblower laws five years after the amendments commence. That will be a really important opportunity for all of us in this parliament to step back, five years on from the royal commission, and ask ourselves whether we have actually created a system where corporate wrongdoing is properly held to account.
The fact is that this bill is probably the last thing we will hear from the Morrison government on whistleblowers, for various reasons—one of them being the part-time parliament, which is unfortunately preventing us from dealing with a lot of laws that are quite similar to this one. Unfortunately, we've not even seen the government respond to the Parliamentary Joint Committee on Corporations and Financial Services report on whistleblower protections which was released about a year ago. The original bill was lodged in the parliament in 2017, and then we had the PJC report the following year. Instead of responding to the critical recommendations that were made in that report, over and above what we have here, to provide a better system for whistleblowers, the government has instead focused on things like running a protection racket for the big banks, and voting against Labor's amendments to crack down on corporate crime, including higher jail sentences for the most serious corporate crimes and higher fines for misconduct.
We in the Labor Party have taken a very different approach. I'm sure you as a local member, Madam Deputy Speaker Claydon, agree that, when you go out into your community, the Australian people right now are screaming for a fairer system and a fairer society. That means that, when people in big organisations break the law, if they're the CEO or they sit in the senior executive suite, they should be subject to accountability, just like any individual would when they break the law. And whistleblowers are an extremely important part of that, because one of the differences between robbing a bank and the bank robbing you is that, when a bank robs you, it's usually quite easy for them to hide their crime. It's hard for those of us outside those big organisations to know that a crime has occurred, especially very quickly after it has happened. So we rely on whistleblowers, to some degree, to help us find wrongdoing.
That's why Labor, in the debate on these limited additional protections for whistleblowers, has said that a future Shorten Labor government is going to change very significantly the protection regime around whistleblowers at the moment. I want to talk through just briefly some of the key elements of the scheme that Labor would set up if we were elected to government. Absolutely the most important aspect of it is that a future Shorten Labor government would set up a whistleblowing rewards scheme. This would be a way for us to incentivise whistleblowers to come forward. Instead of just telling whistleblowers, 'We might be able to protect you from reprisals; we might be able to compensate you for some of the harm done,' we'd be saying to them, 'You are our partner in fighting corporate crime, and, if you are able to provide disclosures and information that will lead to very significant penalties, then you will get a share of some of those penalties.'
This is a really important step forward. It's not one I expect those on the other side of the parliament to support, but I do believe that every Australian who accepts that there is too much crime happening in corporate Australia, that the level of white-collar crime in our country is just too high, thinks we need to do something significant about it, and this is the sort of thing that is going to provide additional protections for us.
We're also, if elected, going to establish a whistleblower protection authority. That might sound a little bit bureaucratic, but imagine that you're a whistleblower—that you know something, you know that some wrong has been done. At the moment there's not really anyone, anywhere, who is there just to help you, working for government. There are different whistleblower schemes for different types of workplaces, and there's no-one who is just there to protect your interests. This proposal would establish such a body so that if you have a disclosure to make—you know that some wrongdoing's occurred—there's actually one organisation that you can call. They can provide you with advice about where you might go to make a disclosure. They can explain to you how to make a protected disclosure—that is, one that is going to sit you within the confines of the protections that exist. They can explain a reward scheme, if a reward scheme exists at the time, and they can help you tackle the reprisals that might come within your workplace. So, if your boss tries to sack you, they'll be able to give you some advice about what your rights might be. If your colleagues start to harass you, to ostracise you—as so often happens in the case of whistleblowers—then you've got someone on the end of the phone whose only obligation, really, while abiding by the law, is to support you and help you understand what is inevitably a very complicated system.
In the same vein as trying to simplify and make that whistleblowing system really easy to use, we're going to bring the relevant whistleblowing laws together into one federal act. That means that for people who are trying to find information about what their rights are—because they will probably differ between public and private systems; that's appropriate, given the various contexts—they'll be able to much more easily find the relevant system that applies to them and the laws that are going to govern their disclosure.
Finally, we are going to fund a special prosecutor to bring corporate criminals to justice. In all these fancy policy law reform discussions we have in this parliament, there's a very basic fact: if there's not enough money to do things, then nothing happens; it doesn't matter what the law looks like. In fact, there are vast swathes of federal criminal law that we pass in this parliament and make great speeches about that are never enforced because the dollars aren't there to do it. What we're talking about here is making sure that we get those additional disclosures by providing additional support to whistleblowers as well as making sure that there's additional funding there for the crimes that come to various agencies and that those can properly be enforced.
This of course relates very directly to Labor's call for a banking royal commission. That highlighted an appalling extent of misconduct, even criminal misconduct, in the banking sector. It's all well and good for politicians to now rage on about how outrageous it is, but what we really need is dollars in the right places to make sure that those crimes are properly acknowledged and that people are held accountable. From talking to Australians in the days that have followed the banking royal commission's final report, I think they're happy. They're pleased that there's a program of law reform there. But people are saying to me: 'Where's the accountability? We've got a former High Court judge who's told us that a whole lot of wrongdoing has occurred, but we haven't seen anyone actually being held to account.' This is the sort of reform that's needed to make sure that does occur.
I've noted some of the concerns and some of the difficulties that whistleblowers face, and the truth is that today there are a lot of Australians who see wrongdoing and want to stop it but, for them, blowing the whistle isn't worth the risk—and it's only not worth the risk because the cost of doing so is enormous; it is so high. That shouldn't be the case. Labor doesn't want to see good people getting punished when they're just trying to do the right thing and help other Australians. That's why we are supporting the bill before the House, but, as I've noted, we are also going quite significantly further. I've said that, if elected, Labor will establish a rewards scheme to make it easier for people to come forward in instances of crime and misconduct. That scheme will allow whistleblowers to receive a percentage of the penalties arising out of the wrongdoing that they reveal. When a company or individual faces financial penalties for their crimes or misconduct as a result of whistleblowing, the whistleblowing reward scheme will allow a portion of the penalty to be given as a reward to the whistleblower. I think that is a very significant step forward for our whistleblowing protection supports here in Australia.
Before we move off that subject, I want to address one of the principal criticisms that's come from the government on this, because of course we come out with a proposal to strengthen the action against white-collar crime and the government has to say it's a bad idea. One of the issues has been around whether the whistleblower has, in fact, played some part in the wrongdoing. There is a lot of flexibility that needs to be given to regulators to help determine how much of a reward would be given to a whistleblower. Of course, if a whistleblower has been there right from the beginning and they've benefited from a whole lot of misconduct and then at the last minute, perhaps feeling that they were going to get caught out, comes forward and says that they were part of this and they expect to get a reward, of course that person is not going to get a reward.
But what we are really focused on are the people who haven't done the wrong thing—and there are a lot of them—but see wrongdoing done in their workplaces. We all acknowledge on this side of the House that the current system is not providing enough support for those people today. So we are really trying to think about how we can make a big step change in how we approach this overall issue of corporate misconduct and white-collar crime in our country.
I've talked about the notion of a whistleblower protection authority—sort of like a one-stop-shop for people who need the protection of whistleblowing schemes. This was a recommendation of the PJC report that I referred to before. We have had one of the highest-performing committees in this parliament conduct a really thorough review of whistleblowing protection laws. It made a whole range of recommendations. I don't know if any of them were picked up in the bill that's before us, but certainly not the really significant structural ones. That's been a little bit disappointing. We have leaned very heavily on that work and that report in constructing our own response to whistleblowing protections.
Labor's proposed whistleblowing protection authority would have dedicated staff to advise whistleblowers on their rights, to assist them through the disclosure process and to help them access compensation if they face reprisals. We call on the government to come up with us on this. I know in recent days, listening to the government, you might feel that there has been something of an evangelical change of heart about what's going on in banking. I don't buy that for a second, because I don't think you can change the DNA of a political party overnight even if you have had a royal commission. But here is an opportunity for the government to show that they are serious about tackling these embedded corporate culture issues in some of our industries here in Australia. Come with us on these whistleblowing protections. We think they're really important and are going to make a big difference to tackling this area of crime.
More broadly, Labor believes that whistleblowers need to be treated the same, that it's not really appropriate for us, without real justification, to have wildly different protections in place in different types of our economy, industries and workplaces. The legislation as it stands improves the private sector regime but it just lets these kind of opaque patchwork protections for whistleblowers which exist to continue. That means that it's really hard for whistleblowers to work out what protections are available to them before the law. That's just not appropriate. Whistleblowers are not always legal experts, nor should they be. They're ordinary Australians. The law should work better for them than it does today.
What we need beyond this bill—far beyond this bill—is comprehensive law reform in the area of whistleblowing protections. That's why Labor have announced that we will go much further than this bill. If elected, we will create an Australian whistleblowing act, consolidating all mainstream whistleblowing legislation into one location so that whistleblowers can readily understand how they are protected. This is the major shake-up that Australia's whistleblowing regime needs, because the status quo isn't working. It isn't working for whistleblowers. It isn't working for lawmakers. It isn't working for regulators. It isn't working for ordinary Australians and consumers. The rip-offs that we have heard about in the royal commission are the tip of the iceberg.
Labor is committed to cracking down on misconduct, on crime and on corruption. We want to support the wonderful Australians who blow the whistle when they see the wrong thing, because they do make Australia a better and fairer place. We will be supporting this bill. We call on the government to match our commitment to whistleblowers. We've seen some of minor improvements to the regime here. Mainly, they were brought into this bill because of the hard work of Centre Alliance in pushing the government to actually doing something that's going to make a difference here, and I commend the work of the member for Mayo and the Centre Alliance senators in the other place for what they were able to get out of this. It's good to see some improvements but, for a system which is fundamentally struggling, I think we need to do significantly better.
That's why I'm really proud that Labor's taken this really strong stance and said that, instead of making piecemeal changes and fixing this little bit and that little bit, let's step back and say that there are some huge aspects of our regime today that are not protecting Australians from corporate crime, they're not protecting Australians from white-collar criminals, and there's absolutely no reason why people, just because they put on a suit and tie every day—