Meryl Swanson (Paterson, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018.

Imagine working for an organisation that you know is doing the wrong thing by its customers? That whether it's legally or morally wrong, you know that what you're seeing or taking part in is not in the interest of the people that the organisation should serve. You finally get the courage to tell people who have the ability to do something about it, but they won't guarantee you protection or discretion unless you follow a long list of criteria, including who you are, what you know and how you report it. So you decide not to report this behaviour out of fear for what it may do to you, your family or your reputation.

Now, stop imagining—because this isn't a hypothetical situation. This is the kind of behaviour that was uncovered during the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. It's hard to believe that some of the heartbreaking stories uncovered could have been prevented if we, the lawmakers in this building, had offered the right people the right incentives and the right supports to uncover disgusting, unlawful behaviour.

The Australian Securities and Investments Commission define a whistleblower as:

… an insider within an organisation, who reports misconduct or dishonest or illegal activity that has occurred within that same organisation.

When our major institutions and organisations are failing us, whistleblowers are the people we rely on to uphold a moral compass and uncover the wrongdoings of the people who think that they can get away with it—and they do get away with it. Whistleblowers are an important part of stopping bad conduct.

Australia's whistleblowing regime, as it currently stands, is very complex. It's inconsistent, and it's split across a range of legislation, making it hard for whistleblowers to navigate. The website outlines five things that people need to do to be recognised and protected as a whistleblower: whistleblowers must be a current employer, they must report the information they know to the company they are exposing, they must provide their name when making the report, they must have proof of what they know, and the information they provide must be honest and genuine. In a nutshell, whistleblowers must report illegal or dishonest activity to the organisation committing the act and sign off at the bottom of the page.

It's no wonder we need an incentive to rectify this. Labor wants to encourage whistleblowers to come forward so that this culture of cover-up is stamped out. Sadly, those opposite seem to think that this amendment would encourage false accusations or employees blatantly lying about their organisation's practices for financial gain. Well, I say to them: have you ever spoken to a whistleblower? Who in their right mind would subject themselves to what whistleblowers go through—the ridicule, the doubt, the embarrassment and the humiliation—all for just having the gall and the gumption to stand up and do the right thing?

The royal commission exposed whistleblowers who paid, in many instances, a very big price for their bravery, and they've been vindicated in the shocking evidence presented through the royal commission. I'm proud to stand with a Shorten Labor government who will protect and, where it's deemed appropriate, reward brave Australians who blow the whistle on crime and corruption in their workplaces, including in the banking and financial sector. A Shorten Labor government will set up a whistleblower rewards scheme, establish a whistleblower protection authority, overhaul our whistleblowing laws with a single whistleblowing act, and fund a special prosecutor to bring corporate criminals to justice. We on this side of the chamber understand the sacrifices people have had to make to simply do the right thing. We want to say to them: we have your back.

The banking royal commission has highlighted appalling and criminal misconduct in the banking sector. That was only possible because brave whistleblowers and bank victims came forward and Labor listened. Labor will provide $3.2 million to immediately set up the whistleblower protection authority within the Office of the Commonwealth Ombudsman. It would house five full-time positions dedicated to assisting whistleblowers through the disclosure process. These positions would help whistleblowers navigate the current disclosure process, assist them with finding the right agency to report it to, provide them with advice on their rights and options for redress, and help to promote broad awareness in the community about Australia's whistleblowing regime. This will help people trying to do the right thing.

I speak on this with some personal experience. I had a friend who was a whistleblower a number of years ago now. During what that person went through, not only on a professional level but also on a personal level, that person would often speak to me and say: 'I haven't slept for weeks. I'm wondering where it's up to and what's going to happen.' It impacted on that person's marriage, employment prospects, finances and mental health—it was truly a terrible thing to witness. It was well before I came to this place, but I often thought: 'Why would you do it? Why would you put yourself in that position?' Well, that friend of mine wanted to do it because what they saw was wrong, and they wanted to shine a light on that. I'm inspired by that friend of mine as I make this speech, thinking back to all those years ago. That person didn't receive any assistance, really, whatsoever. In fact, that person was almost ostracised professionally. But that person did the right thing. I want more people like my friend to feel that they can stand up for what they see to be wrong and speak out without being labelled a dobber, without being labelled as someone who just wants to cause a bit of trouble. We are seeing time and time again the power imbalance in these situations. So I say to whistleblowers: thank you for being brave; thank you for often putting your own personal progress on the line.

Sometimes I am actually asked this question myself about politics. People say, 'Why would you do it? Why would you subject yourself to that nonsense that goes on in parliament? Why would you want to be a politician?' Well, we want to be politicians in this place because we want to make a difference. We want Australia to be a better place. I say to people who are prepared to call out illegal, corrupt and immoral behaviour in our businesses and corporations, in our schools and in any of our public institutions across this country: good on you. Thank you for being brave. Thank you for having the moral fibre and the correct compass. Labor stands with you. Not only do we stand with you but we want to help you navigate the process. We think it should be fairer.

At the end of the day, those illegal and immoral practices pull us all down. They don't make our country more prosperous. They don't make it a better place for our children, our elderly or our most vulnerable people. They make our country a lesser place. We must stand by those people who want more and who want a better standard. Labor will do this. I implore the government to stand up and blow the whistle on your their behaviour, which really hasn't been up to par in these last few weeks. We looked to that banking royal commission to make a difference, and the Australian people are looking to us to implement those banking royal commission recommendations. It is time to learn from our mistakes and fix the mess.

I call on the Prime Minister to act in a prime ministerial fashion and back in what we have said. Please, you can't obfuscate and can't delay for any longer. We must have action. The people of Australia are calling on us to do that. It's with that that I really speak from the heart on this. I say to the whistleblowers: thank you for doing it, and Labor has your back.

Luke Gosling (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

I also rise to speak on the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018. As the member for Paterson just said, we need to do better. The government needs to do a lot better. The bill is welcome, but it doesn't go far enough. I will outline some of that.

Firstly, I just wanted to congratulate the Leader of the Opposition, the shadow Attorney-General and the member for Hotham for their work. The member for Hotham, in some of her comments, also pointed to someone else who needs acknowledgement. That was Jeff Morris. She said:

… 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.

I also want to acknowledge Jeff Morris' courage. It's also a credit to the member for Hotham that she acknowledged the improvement of this bill through the amendments that were negotiated by the Centre Alliance. Well done to the Centre Alliance MP, the member for Mayo. I listened to what the member for Mayo had to say yesterday. She also acknowledged the significant role of Jeff Morris.

For me, I think Jeff Morris was an Australian of the Year in many ways. Of course, I want to acknowledge the courage and the marvellous work of the two Australians, the cave divers, for their courage. Also, I want to acknowledge the NT Australian of the Year, my friend Michael Long, for his enormous courage. But I think it's worth noting that Jeff Morris also showed significant courage.

I think that whistleblowers were the unsung heroes of the recent Hayne royal commission. Too often, whistleblowers bear the personal cost of making public interest disclosures. The tragedy of their predicament lies in the fact that whistleblowers should never have been required to take such risks in the first place. Ideally, organisations and corporations should embrace those who identify and name the discontinuities between the espoused and the lived values and principles that lie at the very heart of all ethical failures. But, alas, we do not live in an ideal world; thus our need, as legislators, to now protect those who have the courage to declare that the emperor has no clothes. We need to do that. This bill goes towards doing that but there's a lot more that needs to be done that Labor has committed to.

When the emperor has no clothes and there is a need to speak truth to power, when someone observes that what is happening in an organisation or corporation is not right then they need to speak up. We need to be able to protect them because a problem was found—it was already known by many—through the banking royal commission, a royal commission that was voted against by those opposite 26 times in this place. That was the protection racket that those opposite were responsible for. Twenty-six times they wanted to continue to cover up. Keep in mind, please, also that for three years those opposite fought to give a handout of $17 billion to the banks that have now been proven to have been engaging in conduct most uncommon. It was not all the banks, not all the executives, but certainly it is a big issue. These are big organisations with a lot of power so it makes Jeff Morris' courage even more outstanding.

The problem is that we have, as other speakers have said, a complex whistleblowing regime. It's split across a range of legislation and it provides inadequate support for whistleblowers. There was a need for this bill because the threat of reprisals against people like Jeff Morris is high. Many whistleblowers lose their jobs and it has been very difficult for many whistleblowers to get adequate compensation. Labor has committed $3.2 million over the forward estimates to immediately set up the whistleblower protection authority within the office of the Commonwealth Ombudsman. It would house five full-time positions dedicated to assisting whistleblowers through the disclosure process. These positions would help whistleblowers navigate the current disclosure process, assist them with finding the right agency to report to, provide them with the right advice on their rights and options for redress, and help to promote broad awareness in the community about Australia's whistleblowing regime.

We also recognise that there is a need to have some sort of reward system for whistleblowers and that's why, again—if and when elected—Labor would establish a rewards scheme. Following the imposition of a penalty against a wrongdoer by a court or other body that may impose such a penalty, the relevant investigative agency or prescribed law enforcement agency would be able to give a reward to any relevant whistleblower. The relevant agencies would have discretion to determine the reward within a legislated range of percentages of the penalty imposed against the wrongdoer. The relevant agencies would consider a range of factors, including the degree to which a whistleblower's information led to the imposition of the penalty on the wrongdoer, the timeliness with which the disclosure was made, the context of the disclosure and any reprisals and any involvement by the whistleblower in the conduct for which the penalty was imposed. The range of percentages of the penalties will be determined during the detailed design phase in government if—when—in the future we're elected.

As I said, this bill does go some way, but we need to do more. We need to do better. My friend the member for Fenner writes some truly excellent op-eds, and I was reading one recently that was in TheSydney Morning Herald entitled, 'The Golden Whistle'. He made the observation about the need for rewards systems and the benefits of reward systems when it comes to whistleblower schemes:

A recent study of Israel's tax whistleblowing scheme concluded that it significantly increased the amount of tax paid; particularly in industries that are more prone to tax evasion. The scheme had a powerful deterrent effect on tax dodging. Once firms knew that there was an incentive for employees to report wrongdoing, they were more inclined to pay what they owed. Tax revenue increased by more than one-quarter.

I acknowledge that today we've been acknowledging the 70th anniversary of our relationship with Israel. In that country, where similar incentive schemes for whistleblowers have been enacted, there has been a one-quarter increase in tax revenue. Imagine what we could do as a nation for Australians if we had the tax that isn't being paid because of people who are wrongly evading paying tax. We could do an incredible amount. We could do an absolutely incredible amount, like supporting pensioners. When Labor was last in government, we increased the pension by a record margin. Those opposite recently—

Honourable Member:

An honourable member interjecting—

Luke Gosling (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

I take the interjection—have been cutting supplements pensioners received. I digress. I just wanted to acknowledge that good work by the shadow Assistant Treasurer, the member for Fenner, who is always looking to bring more clarity and more evidence from around the world to the issues that this House deals with. This area of whistleblowing is something on which he continues to do that.

I think what some of the other members, including some of the members opposite—I was here in the House yesterday listening to this debate when the member for Forde made some great comments, I thought. He made some honest comments, and what struck me when these comments were made was the lack of trust in government, the lack of trust in lawmakers and the despicable behaviour by people that was uncovered through the banking royal commission. So I acknowledge the comments that that member of the government made, and also those of the member for Parramatta, who I listened to as she relayed feedback from her constituents as she got around on the doors.

From Parramatta to Darwin, and the people that I represent in this place, it's the same. People believe that some of our most important institutions are lacking credibility, but I assure them, at least speaking for those on this side, that we are intent on rebuilding the ethical infrastructure of our country. What we will do in this space goes to exactly that. Whilst this bill is good, it doesn't go far enough. We support it, but it doesn't go far enough. We will go further in order to send a strong message to those who feel a dilemma because they know that something's going wrong and they want to report it. Those people we will protect. But we also want to send a message to those who seek to not pay their fair share that that won't be tolerated.

In the time that is remaining, I just want to acknowledge that there are a whole lot of people—some may even be listening to this. Or some listening to this may be trying to mentor or help someone through a difficult situation at their workplace. What I want to do in the time remaining is relay a good experience that I've had that has helped me work through a moral dilemma, a difficult ethical situation. It was an initiative that was started by the St James Ethics Centre. It's no longer run by them directly. It's an independent initiative, which has been going for about 20 years, called Ethi-call.

Ethi-call is a free, independent, national helpline, available to all Australians, which provides expert and impartial guidance to help you make your way through life's tough challenges. As I understand it, it is the only service of its kind in the world. Whether you are facing an ethical issue that is of a personal nature or a professional nature, it is a free service that is there not to give you legal advice but to help you work through the dilemma that you're facing. It's available day and night, seven days a week, by appointment. The laws that we are passing are designed to provide more protection to whistleblowers. But I wanted to let those listening know that, if they are facing a very difficult situation, they are not alone. Go to www.ethics.org.au and, with someone, you can work through that dilemma you may be facing.

Ted O'Brien (Fairfax, Liberal Party) Share this | Link to this | Hansard source

Edmund Burke once said, 'The only thing necessary for the triumph of evil is for good men to do nothing.' In order for us to ensure that wrongdoing—evil, if you like—is made transparent, disclosed and acted upon, men and women must be empowered so they can speak up. That goes to the heart of what the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018 is all about.

Often, in any culture, whether it be corporate, organisational or even family, it comes down to strong leadership to set the right example, for a group's strategy, policies or plans do not matter; what influences a group's culture more than anything is leadership. Now, where whistleblowers often come in is in situations where they work within a culture that either quietly or openly condones activity that is not compliant—that is, at times, unlawful. Unfortunately, good people aren't always the ones in leadership positions. Good people aren't always the ones who have access to the levers that one can pull to influence the culture of an organisation. That is why, through this bill, we seek to ensure that we use our leadership, as a government, to empower those people who themselves lack it—those people who have the moral courage to take a stand and call out wrongdoing where they see it. It's vitally important that those people who display such moral courage are protected under the law.

Indeed, whistleblowing plays a critical role in uncovering corporate and tax misconduct. However, as it stands currently, there are no specific protections for tax whistleblowers, and the range of secrecy and privacy provisions relied upon are often incapable of guaranteeing the protection that one would rightly require. That is why, in the 2016-17 budget the government announced greater protections for those who disclose information about tax misconduct to the ATO—the Australian Taxation Office. This is all about improving the strength and integrity of Australia's tax system.

And so this bill delivers on the government's 2016-17 budget commitment to protect individuals who blow the whistle on tax avoidance behaviour—tax evasion and tax misconduct. We need to make sure that we continue to deliver on our Open Government National Action Plan. This was the government's commitment, released in December 2016, and this government has a proven track record that when it makes such commitments it follows through with teeth. This bill, indeed, provides such teeth for that commitment to open governance within Australia.

The Open Government National Action Plan was developed collaboratively by government and civil society. The plan consists of a package of 15 commitments that aim to advance transparency, accountability, public participation and technological innovation in Australia. It shouldn't go unnoticed that the national action plan was not just created by government alone. It wasn't created by bureaucracy. Indeed, it wasn't created in this bubble here of parliament. But, rather, it was done collaboratively with leaders who are not just in business but in community, because only when we have individuals within civil society also taking responsibility and taking the lead to ensure that organisations have cultures that do not condone noncompliance and unlawful behaviour will we ensure that we have the governance right across our society that the Australian people expect.

Stronger whistleblowing protection is the first commitment of the plan. It's designed to support the objective of enhancing Australia's strong reputation for responsible, transparent and accountable business practices. Indeed, as somebody who spent much of his 20-plus professional years before entering this parliament in business, and particularly in overseas markets, I am very cognisant of Australia's reputation for being transparent. Australian businesses and Australian businesspeople are recognised as people who speak straightforward commonsense and whose word you can trust. That only develops over time, but we need to ensure that we have laws in place that hold all Australians true to that reputation.

And so the government's amendments in this bill will improve access to compensation for whistleblowers who suffer victimisation. I noticed that when the minister spoke to this bill in the House that the example was given that whistleblowers will be able to make a claim for compensation when a body corporate breaches a duty it owes to the whistleblower to prevent a third person engaging in detrimental conduct towards them. Duties may include, for example, those that arise under employment law or state and territory law. Also, the amendments require a court to consider the period a person is likely to be without employment in circumstances where the detrimental conduct involved termination of employment. To ensure the corporate regime operates as it is intended, disclosures solely about personal employment-related matters are to be excluded from protection—a wise and prudent measure, I would suggest. The emergency disclosure provisions that allow for disclosures to parliamentarians and journalists have been amended to better align with those equivalent provisions in the public sector as appropriate for the corporate context.

Furthermore, the definition of 'journalist' is revised to ensure eligible disclosures may to journalists employed by the Australian Broadcasting Corporation or the Special Broadcasting Service are protected. Again, I see here where the consultation with civil society is getting the balance right to ensure that we are protecting whistleblowers but we are also ensuring that there are adequate protections and definitions so that there is not overreach or confusion.

This bill requires that a statutory review be undertaken of the operation of the protections within both the Corporations Act and the taxation act five years after the commencement date of the amendments. The amendments will also be made to support the Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Bill 2018 and have the effect of increasing financial penalties for offences under the whistleblower regime, the Corporations Act and the taxation act. The amendments seek to increase consistency, where practical, with other Commonwealth whistleblower legislation. The Legislative and Governance Forum for Corporations was consulted in relation to the bill and subsequent amendments and has approved them as required under the Corporations Agreement 2002.

Of course, this bill hasn't been created in isolation from a series of other measures, and nor has it been created without giving due consideration to the need for alignment. Indeed, what we see in the broader context is that the amendments before the House and the protections have formed part of the Corporations Act since 2004 but have been persistently perceived as inadequate. But here's how the bill aligns with other measures, including the whistleblower bill. It provides protections for current and former employees and officers as well as anonymous disclosures. This brings it into alignment with the Public Interest Disclosure Act 2013 and Fair Work (Registered Organisations) Act 2009.

Further, the whistleblower bill repeals and substitutes the good faith test with an objective test requiring that a disclosure has reasonable grounds to suspect the relevant disclosable conduct, again an area of alignment—in this case, alignment with the Public Interest Disclosure Act and Fair Work.

As with the Public Interest Disclosure Act, qualifying disclosures entitle whistleblowers to protection from exposure of their identities and immunity from civil, criminal and administrative liabilities for making the disclosure. Protections are available for whistleblowers who make emergency or public interest disclosures where certain pre-conditions are satisfied. This closely follows the Public Interest Disclosure Act, with adjustment for the corporate context.

The whistleblower bill provides protections for those who suffer threats or actual reprisals consistent with the Fair Work (Registered Organisations) Act 2009. To be clear, protections are available where a threat or reprisal is taken against a person because the offender believes or suspects that that person or any other person may have made, proposes to make or could make a protected disclosure. All regimes allow a whistleblower to seek a range of civil remedies through a court, including an apology, injunction, reinstatement order, compensation for loss or damage and costs. The reforms of the whistleblower bill also provide a definition of detriment that closely follows the Fair Work Act 2009. A whistleblower may claim compensation or other remedies on the basis that they have suffered detriment because a company breached a duty to them. This is to align with the protections in the Fair Work (Registered Organisations) Act 2009—again, an alignment with other bills to ensure that the integrity of the overall system is strengthened.

I pay tribute to those whistleblowers who have had the moral courage to stand for what is right and what is good, and I commend this bill to the House.

Stuart Robert (Fadden, Liberal Party, Assistant Treasurer) Share this | Link to this | Hansard source

I thank all those members who've contributed to the debate. The Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018 amends the Corporations Act 2001 and the Taxation Administration Act 1953 to strengthen Australia's corporate and tax whistleblower protections. Strengthening the protections to allow whistleblowers to come forward will assist the regulators to receive information earlier, investigate contraventions, take appropriate enforcement action and limit the risk of loss to investors. Importantly, these changes will help to ensure public trust and confidence in the integrity of the financial system.

Corporate crime is estimated to cost Australia more than $8½ billion a year and accounts for approximately 40 per cent of the total cost of crime in Australia. Whistleblowing plays a critical role in uncovering misconduct and criminal activity. It may also improve poor compliance cultures by ensuring companies, officers and staff know that the risk of misconduct being reported is far higher. In December 2016 the government announced, as part of the Open Government National Action Plan, that it would ensure appropriate protections are place for people who report corruption, fraud, tax evasion or avoidance, and misconduct in the corporate sector. The commitment in the Open Government National Action Plan also reaffirmed the government's 2016-17 budget announcement that it would introduce new arrangements to better protect individuals who disclose information to the Australian tax office on tax avoidance behaviour and other tax issues to further strengthen the integrity of Australia's tax system. This bill delivers on those commitments.

Part 1 of the bill will strengthen protection for corporate whistleblowers by expanding protections to a broader class of persons; expand disclosures that can be protected; extend protections to cover emergency and public interest disclosures, subject to preconditions; exclude from protection disclosures of purely personal or work related grievances; improve access to compensation for whistleblowers, including improvements in civil remedies for whistleblowers; and create new civil penalties to make enforcement action easier. The bill introduces a whistleblower policy requirement for all large companies.

A statutory review of the operation of the whistleblower protections within both the Corporations Act and the Taxation Administration Act will be required five years after the commencement date of the bill.

The bill amalgamates protections across several acts into the Corporations Act. The consolidation will cover the Australian Securities and Investments Commission Act 2001, the Banking Act 1959, the Insurance Act 1973, the Life Insurance Act 1995 and the Superannuation Industry (Supervision) Act 1993 as well as adding protections for conduct that contravenes the National Consumer Credit Protection Act 2009 and the Financial Sector (Collection of Data) Act 2001, which were not covered under the existing law.

Part 2 of the bill will introduce new protections for whistleblowers under the taxation law. These protections are broadly consistent with the enhanced protections under the Corporations Act and facilitate disclosures about tax misconduct.

Together these reforms will help protect whistleblowers who may expose themselves to significant personal and financial risk in return for their critical role in the early detection and prosecution of misconduct in businesses and avoidance or evasion of tax liabilities. Benefits will also be derived by the Australian business community as the reforms will encourage improved corporate governance and integrity through the whistleblower policy prescription for large companies and increasing the likelihood of misconduct being reported. The measures contained in the bill have been extensively consulted upon and have the strong support of a number of peak bodies and regulators, including the AFP, ATO and ASIC. I commend the bill to the House.

Question agreed to.

Bill read a second time.