Senate debates

Monday, 5 September 2022

Regulations and Determinations

Code for the Tendering and Performance of Building Work Amendment Instrument 2022; Disallowance

8:50 pm

Photo of James PatersonJames Paterson (Victoria, Liberal Party, Shadow Minister for Cyber Security) Share this | Hansard source

Thank you, Senator Watt, for that interjection. I look forward to further contributions from your colleagues. I wonder whether Senator Sheldon drew the short straw in caucus this morning and is their designated speaker for the day to come in and defend the indefensible, or whether he is the only one who has the courage to show up and defend the conduct of the CFMMEU.

I sincerely try to put myself in the shoes of those opposite, many of whom ran no doubt very sincerely committed to the advancement of women and minorities and to the defence of the rule of the law. Yet they will come into this place when this motion is put for a vote and dutifully do as they are told and defend conduct which surely even they know deep down is not right, is not okay and is not something that we should want to see in Australia.

I puzzle to myself: what is the possible reason why good people would come in and defend such reprehensible conduct? I'm sorry, but after reflecting and listening to the contributions of all senators there really only is one possible contribution—it is, as other senators have alluded to, ultimately all about money.

The CFMMEU is one of the Labor Party's most important financial benefactors. In the last 20 years alone they have donated $16.3 million of their members' dues to the Labor Party. That's $16 million that's allowed the Labor Party to run and finance their campaigns and, ultimately, to prevail at the last federal election and to occupy the government benches. Maybe they can tell themselves in the quiet of their room in the dark of the night when they're reflecting on their contribution to public life that it might have been a bit uncomfortable to defend this reprehensible conduct, but it was worth it because that $16 million allowed them to win the election and to be in government.

I wish I could say that this was an isolated case. I wish I could say it was the only instance of the Labor Party making moral compromises for donations. But it's not, because in just the first 100 days of this new government they haven't done much. They haven't outlined a plan to address the cost-of-living crisis facing Australians. But one thing they've done very well—one thing they've done remarkably efficiently and productively—is deliver for the constituencies who delivered for them, particularly for their financial backers.

This is, in fact, a pattern of behaviour. We've seen it in the regulations issued recently to try to protect super funds from the measures of disclosure and transparency that the former government—particularly the good work of Senator Hume, who was the responsible minister in the previous parliament—imposed upon them. All that we ask, which I don't think is an unreasonable thing, is that, when they are donating their super members' money to causes, political and otherwise, they disclose that to their members and they be transparent about that to their members.

Yet, in its first 100 days, this government has issued a regulation to try to obscure that information and hide it from those super fund members. The Assistant Treasurer, Mr Jones, has even laughably said that this is a red tape reduction measure and that this is about reducing the cost of compliance and the regulatory burden on super funds. He was very embarrassed when Michael Roddan at the Financial Review pointed out that other areas of the law, in particular reporting obligations to APRA, already require super funds to provide this information. The only thing this regulation did was to make it public.

Why would the Labor Party be so passionate about delivering for super funds, by helping them to cover it up? My colleague, Senator Bragg, who I know is going to make a contribution shortly, has very deftly exposed over the last few months why that would be the case. Because in just one financial year alone, the most recent financial year for which we have data—2020 to 2021—super funds paid $12.9 million to the union movement. And we know those funds don't just go from super funds to the union movement and stay there. They help subsidise the political campaigning activity of the union movement and, ultimately, the political donations that the union movement makes to the Labor Party. So this is yet another example of the Labor Party trading donations for regulatory favours when they get into government.

Unfortunately, this is only one of many examples, because at 4.30 on Friday afternoon—it's always a bit of a giveaway when ministers issue a media release at that time—the Attorney-General, Mr Dreyfus, and again our favourite Assistant Treasurer, Mr Jones, issued a media release. The footy finals were on and people were heading away for the weekend, but just in time, before journalists clocked off, they shared the news that they were also overturning regulations governing litigation funders and class actions.

To give you a brief recap of the history of this issue, it has become very clear in recent years that the conduct of class action law firms and litigation funders is underregulated, and that the victims of that lack of regulation have been successful class action participants who banded together, finally had their day in court and won their case. When it came time for the proceeds of that successful action to be handed out among those class action participants, they got cents on the dollar. And they got cents on the dollar because the overwhelming lion's share of those proceeds instead went to class action law firms and the litigation funders who finance their activities.

These are litigation funders who are typically located in tax haven jurisdictions like the Virgin Islands, the Jersey Islands or the Cayman Islands. These are litigation funders who are treating our justice system like it is a casino and generating returns on investment for their initial outlays of the many hundreds of per cent. And in fact it emerged during an inquiry I chaired in the previous parliament that these funds are so oversubscribed that every time they advertise for an injection of new funds from overseas investors they cannot meet the demand. And why wouldn't you invest with such guaranteed lucrative returns through the Australian justice system?

Quite reasonably, the former Treasurer, Josh Frydenberg, issued a regulation which required some very basic and minimal compliance on the part of these litigation funders and class action law firms. One of the things it required of them was that they apply for and obtain an AFSL—an Australian Financial Services Licence. One of the key criteria for obtaining and holding an AFSL is that you must conduct yourself honestly, efficiently and fairly. It remains an open question which one of those three criteria—honesty, efficiency or fairness—that litigation funders and class action law firms are unwilling or unable to comply with, and which one of those things this government, the Albanese government, thinks is an unreasonable thing to require of them. These regulations, issued by Mr Dreyfus and Mr Jones, would have the effect of removing that requirement from class action law firms and their partners in the litigation funding industry.

So why would it be that late on a Friday afternoon, within its first few months in office, one of the priorities of the Albanese government was to issue a regulation to remove basic compliance and oversight of an unregulated industry? To explain the answer to that question I turned to a Janet Albrechtsen article in the Australian newspaper published on 16 May 2020 in which she writes:

In the 2009-10 financial year, Maurice Blackburn donated $163,300 to Labor, then its highest donation on record to the party. The previous year it sent only $12,951 Labor's way, and the year before that it was just $12,616. For the next 10 years, Maurice Blackburn donated more than $1m to Labor, compared with $257,767 over the previous decade.

In the last financial year, with a state election in Victoria in November 2018 and the federal election the following May, Maurice Blackburn donated $354,805 to Labor, the third-largest donation on record. It gave a further $200,000 to the ACTU, which campaigned for Labor. That is just one class action law firm and just one snapshot of the millions of dollars which flow from this industry to the Labor Party. It is the third example I cite today of major Labor Party donors getting regulatory favours from this government. They are regulatory favours which help these organisations evade scrutiny, transparency, disclosure and oversight.

This is a political party, the Labor Party, which campaigned for office on being the most transparent government ever, on being an ethical government that was going to bring in a corruption commission. And yet in its first hundred days in office it has engaged in behaviour which I think is arguably corrupt. I share Senator McGrath's advocacy that perhaps this is something that a future corruption commission should examine when it is established because it is very hard to think of any other reason why the Labor Party would go to such lengths to expose itself to some political risk and some political damage in order to protect its friends except for the very significant financial donations that they receive.

Senator Lambie made a good point in her contribution. She made a number of good points, but there is one in particular I want to highlight. She noted that the Albanese government aren't proceeding on this issue by way of legislation, at least not for now. They're doing so by regulation. It's no coincidence that in the case of letting their friends in the super funds off the hook they are also proceeding by regulation. In letting their friends in the litigation funding movement and the class action law firms off the hook, they are also proceeding by way of regulation.

Regulation has an appropriate role in a Westminster system. Not everything needs to be specified in legislation. But it's generally regarded as a tool for less contentious areas of public policy, the rats and mice of public policy, the filling in the gaps of the legislative framework. But these are not rats and mice. These are not trivial things. These are three big substantive things. And yet this government does not have the courage of its convictions to bring forward legislation to deal with any of these three issues in testing the numbers in this chamber to see whether it can obtain 39 votes for these things and exposing itself to a full and proper debate, a debate that would involve referrals to Senate committees, public hearings and inquiries and examination of this issue. They want to do it quick, they want to do it dirty and they want to do it with minimal scrutiny because they know, ultimately, if exposed to the public it would not reflect very well on them.

This is a new government. It is understandably riding high. The polls are strong. It's in a honeymoon period. But that will not last. Let me tell you: no government enjoys that level of public support forever. When the worm turns, as it inevitably will in a few years time, decisions like this will not stand the test of time. Decisions like this will look like a stain on the early record of this government. I really urge those opposite to consider. I know it's hard. I know you're members of the Labor Party. I know your caucus discipline and solidarity. But consider: is this what you entered public life to do? Did you run for office to provide regulatory favours to your political donors? If the Liberal and National parties did these things in government, you would be the first people to charge into this chamber and accuse us of corrupt conduct and corrupt behaviour. If you think it's bad if your political opponents do it, you should reflect on whether it's okay for you to do it as well. You should reflect on whether that is really the purpose for which you came to the federal parliament to represent your fellow Australians.

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