Christopher Back (WA, Liberal Party) Share this | Hansard source

I am pleased to rise to support the Fair Work (Registered Organisations) Amendment Bill 2014. I would have thought that every single solitary person in this parliament, from the other side and in this chamber, would want to see the fairness and the equity that have been proposed in this bill. Indeed, those listening to this debate might think that there is only one group of people who are the subject of this legislation, should it be passed, and that is members of the trade union movement, which of course is absolutely wrong. It will apply to employers and to employer groups. It highlights the fact that anybody in this country who receives the benefit of funding, including funding from taxpayers by way of tax benefits or tax relief, has a very, very strong obligation, and that is to be fully accountable to their members or to taxpayers.

That is exactly why this legislation, proposed by Minister Cash, is before us. It is not about unions only. It is about employers. It is about employer groups. It is about unions. It is about any registered organisation that collects, processes, manages and expends moneys on behalf of their members. What this bill does is say that this parliament places an obligation on those people to ensure that those who are responsible for the expenditure of members' moneys do so with propriety, with honesty and with transparency.

For those who think this is some historic event, it is not. Only Friday of last week, we had the circumstance in New South Wales where two people—the ex-secretary of the National Union of Workers of New South Wales, a Mr Derrick Belan; and his niece, the ex-financial controller, Ms Danielle O'Brien—were brought before the courts, on the recommendation of the recent Royal Commission into Trade Union Governance and Corruption, for the illegal expenditure of members' funds. It is not an inconsequential sum of money. The alleged fraud by Mr Belan is of the figure of $440,000. He was refused bail and is due to appear on a day to be fixed. The young lady was granted bail, but the figure was $430,000.

I want to reflect for a moment: how does it come to pass, in any organisation—be it an employer organisation, be it a union organisation or be it the RSL—that a couple of people think that they have the capacity and the wherewithal to knock off nearly $900,000, for whatever purpose? My father was a bank manager, and he used to say to me, 'Chris, if a teller is stealing, there are two people to blame. One is the teller who is stealing and the other is the manager who has failed to put into place strategies so that the teller will understand they will be caught.' If you take that on a macro scale, Mr Acting Deputy President Ketter, this is what is before us today. It is of sufficient importance that the Parliament of Australia must address itself to these questions. It is not union bashing; it is not employer bashing; it is looking at the proper activities of those charged with the responsibility and the husbandry of the money of members.

So, what happened in that New South Wales case? How could those two people think that they could knock off, if it is proven, $800,000 from their members—not taken from employer groups, not taken from the wider public, but taken from the membership fees of their own members. That is what we are addressing here today.

It is interesting to listen to Senator Carr go on about union-bashing et cetera. As I have said in this place, I am the very proud grandson of Tom Back, who was the secretary of what was referred to as the lumpers union, on the wharves in Fremantle during the Depression years. The Fremantle Lumpers Union eventually, through the Waterside Workers Federation, became the MUA, a union with whom I have enormous difficulties today. I can assure you that I find grossly offensive all of those comments made by Senator Carr about our side of the parliament. They are wrong. They are lies. I find them offensive to the memory of my grandfather. The actions of my grandfather, and those like him, were the actions of a person who spends every living hour trying to ensure reasonable employment for members of the union—including my father, Bill Back; and his brother, my uncle Tom Maher, both of whom got work on the wharf when there was work on the wharf in Fremantle during the Depression. So I do not want Senator Carr coming in here and carrying on with that sort of nonsense that I just heard about that person.

I want to reflect for a moment on some of those vagaries about which we have heard. It goes to the point made a few moments ago, and that is the amendment foreshadowed by Senator Pratt, from Western Australia. We know that Ms Kathy Jackson, acting at one stage in her career in a voluntary capacity as the honorary secretary of the Health Services Union, would in fact be exempt, should this amendment pass. Let us think about that for a moment. Let us think about all those low-paid workers in nursing home, those people for whom it must be a vocation rather than a job, going by the attention that they give to elderly people like they gave to my mother and that others who are in nursing homes receive.

To think that another person was, at the time, a member of the other place—Mr Craig Thomson. In 2015, the former Health Services Union national secretary, Mr Thomson, was found guilty of misusing $300,000 for his campaign to enter parliament and then for other indulgences, apparently including the use of prostitutes. As deputy chair of the then education, employment and workplace relations committee I could never get out of my mind the union fees that would have been being paid by those low-paid workers in nursing homes, in hospitals and in other facilities so that Craig Thomson could enjoy the services of prostitutes and, indeed, fund his own campaign for election.

Worse than that was the fact that we all know very well: the then Gillard government could not afford for Mr Craig Thomson to leave the parliament. Should he have been bankrupted, he, of course, must have left the parliament—a matter that is being dealt with at this very moment in consideration of another colleague—because, as we know, members and senators cannot sit in the parliament if they are bankrupt. So what happened? I would now invite Senator Dastyari, who at the time was the secretary of his union, to come in and correct the record if I am wrong in saying that Mr Craig Thomson's legal fees were paid so that he could continue in the parliament, when there was full knowledge of what this person was doing and was subsequently found guilty of undertaking.

I think that was one of the lowest moments in the history of this parliament—certainly in the eight years that I have been here—that the government of the day would protect a person against bankruptcy, using funds by another union, to avoid a circumstance in which he would have to leave the parliament, with the government then finding itself in a position of not having sufficient numbers to govern. I ask the question: if, indeed, those funds were paid by then secretary Dastyari, did the members know that those funds were being used for that purpose? This goes exactly to the reason why Senator Cash has brought this legislation before this parliament, and that is the fact that members of registered organisations—be they employer groups, be they employee groups or be they unions—have a right to know that their funds are being husbanded and that they are being handled honestly, with integrity and with transparency.

We go to the legislation to which Senator Carr referred in the final moments of his contribution. Again, it relates to amendments introduced by the then minister for industrial relations, Mr Bill Shorten, in 2012. Remember, these were amendments that the then Labor government brought in. I will refer to one of them, because in the brief five days that the then Education, Employment and Workplace Relations Committee had to review this legislation, introduced by Mr Shorten, one of the elements then, and an element today, relates to the five highest paid officials.

With your concurrence, I want to quote from Mr Shorten's second reading speech in the other place, when he was speaking of the levels of disclosure. This is the comment that he made:

This bill will require the rules of registered organisations to provide for the disclosure of remuneration, including board fees, of the five highest paid officials of the organisation as well as the two highest paid in each branch, to the members of the organisation.

This is not an unreasonable requirement, one would have thought. He then went on to say:

Determining the five highest paid officials will be based upon monetary remuneration rather than non-cash benefits.

He concluded by saying:

…where an official's remuneration is required to be disclosed, that disclosure will require non-cash benefits paid to the official to be identified.

The then minister, the now Leader of the Opposition, Mr Shorten, was in support of the core key elements of what we are dealing with today.

As you know, Madam Acting Deputy President Reynolds, there is very strong support from luminaries of the Labor Party for the sort of legislation that is being proposed here today. Former ACTU president Mr Martin Ferguson, who went on to become the Minister for Resources and Energy, is highly regarded around Australia from everybody in those industries. He said:

There is an absolute obligation on the union movement to clean up its house. There is an obligation on the unions to put their house in order.

Former ACTU secretary Bill Kelty said:

I was always on that side of the debate which said that unions are public bodies so they are accountable to members for their management.

A previous Attorney-General in a recent Labor government, Robert McClelland, made this comment: 'Unquestionably, a case for further legislative reform.' We know that former National Secretary of the Australian Workers' Union Paul Howes was concerned about many of the elements. He spoke about the 'cancer of dishonesty' and how it can corrupt an organisation. At the time, he spoke of the need for developing resistance to corruption.

Senator Carr and I are on the same page when it comes to that particular issue. We know that in our democratic system, which is the Westminster system of parliament, the government of the day—the coalition government under Mr Turnbull—introduced this legislation into this place and it was rejected twice, which then became a trigger for a double disillusion election. We went to the 2013 election saying that we would clean up the Shorten legislation and that we would introduce the registered organisations bill. We were voted into government in 2013. Then, in 2016, we said that, should we win government, should we be privileged to continue as the government of this country, we would again introduce this registered organisations legislation. And here we are back in government. It behoves those in this parliament to respect the voice of the Australian people. That is what must happen.

I am not going to spell out all of those vagaries that I know others have about the misuse of funds by people entrusted to their management by their members and often low-paid members of those organisations. But I do want to focus in the couple of minutes left available to me on how this legislation will work. There will be a focused regulator. There is no variation from the other side of politics on this one. There will be enhanced financial accountability provisions. The original Shorten legislation, as my colleague Senator Cash will remember, imposed enormous burdens on people to participate in further financial management training even if they were already highly competent in those spaces. The sensible legislation produced by the government through the minister today simply says there will enhanced financial accountability provisions with meaningful sanctions that can be applied when wrongdoing is revealed.

If we look at the penalties we can see they are serious. We are not talking about small sums of money. Last Friday it was $800,000 by two people who, because of the culture of their organisation or because of their own dishonesty, if proven, seemed to think they could walk away with $400,000 each. I just cannot believe this. So the penalties will require registered organisations to disclose the remuneration paid to their top five highest paid officers. I have already referred to the fact that Mr Shorten in government was in agreement with that. The penalties will secondly require officers whose duties relate to financial management to disclose material where they might have a personal interest. Isn't it amazing? If there is a conflict of interest, you will have to put your hand up and say so. We do that here. In any circumstance in which there is the possibility of a conflict of interest, we must announce that. So this is now being put into the legislation. Thirdly, we are ensuring in this legislation that officers cannot make decisions on matters where they have a conflict of interest. They must excuse themselves from any decision making. They must be absent from the room. The minutes of a meeting must confirm the fact that they took no part in that particular decision making.

As we know—and as was supported by the then government through its minister Mr Shorten—civil penalties will range from $18,000 to $216,000 for individuals and over $1 million for a body corporate, employer group, union or any registered organisation. And, as there needs to be, there will be criminal penalties that will apply for reckless or intentional dishonest breaches of officers' duties with a fine of up to $360,000 or five years imprisonment or both.

The wider community have an expectation that those charged with the responsibility for other people's money will take it seriously, honestly and with integrity and that there will be transparency. I do not care, further to Senator Carr's comments, whether it is an employer group, a union group or, indeed, anybody who puts their hand up and seeks taxpayers' money by way of either payment or tax relief. They should all be subject to the same burdens that have been introduced in this legislation.