Senate debates

Tuesday, 26 June 2012


Fair Work (Registered Organisations) Amendment Bill 2012; Second Reading

4:58 pm

Photo of Michaelia CashMichaelia Cash (WA, Liberal Party, Shadow Parliamentary Secretary for Immigration) Share this | | Hansard source

I am pleased to contribute to the debate on the Fair Work (Registered Organisations) Amendment Bill 2012 which, if agreed to by the Senate, will amend the Fair Work (Registered Organisations) Act 2009, the principal act for the purposes of the proposed amendments. The government claimed that the purpose of the bill is to increase the financial and accountability obligations of registered organisations and their office holders, to strengthen the investigative powers of Fair Work Australia and to enhance remedies under the Fair Work (Registered Organisations) Act. The minister in his second reading speech suggests one reason for the introduction of the bill:

In recent weeks and months conduct by a small number of officials in some parts of one organisation has dented public confidence in all registered organisations in this country.

It is patently obvious to anybody that in making this point the minister was referring to what has become known as the criminal activities of some officials or former officials of the Health Services Union. However, for the minister to refer to these activities as having no more than 'dented public confidence' is a serious indictment of the judgment and, indeed, the credibility of the minister himself. Rather than using the banal words 'dented public confidence' which the minister has no doubt deliberately used to try to trivialise the actions of some of the HSU officials, it would have been more appropriate for the minister to say that the actions of these HSU officials in robbing some of the lowest paid workers in the health system has not just dented but actually shattered and, indeed, crushed the confidence that these members had in their union and the officials.

Many of the low-paid workers of the HSU have been devastated and traumatised by the factual evidence that has been published in the Fair Work Australia report on the activities of the HSU and, in particular, its former secretary, Craig Thomson, the current member for Dobell, and its former president, Mr Michael Williamson, who is a former President of the Australian Labor Party. The real reason that this bill has been introduced is that the Labor Party and the federal Labor government, which have been protecting both Mr Thomson and Mr Williamson for a long time, have been caught out by the publication of the Fair Work Australia report on the HSU.

The Labor Party is now desperate to be seen to be doing something about this disgraceful pillaging of funds from the low-paid workers of the HSU who both Mr Thomson and Mr Williamson were allegedly meant to be representing. Both Mr Thomson and Mr Williamson are classic examples of the good old tried and tested Labor maxim, 'Nothing is too good for the representative of the worker' and, in this case, even if it means robbing those workers blind so that they can satiate their appetite for reckless spending.

The question that needs to be addressed in this debate, in particular by those low-paid members of the HSU who have been exploited by those who are meant to represent them, is: does the substance of the bill achieve the objectives the Labor Party claimed it sought to address? Has the Labor Party really taken action to protect workers and make union officials accountable for abuses of them, or is this just another Labor cover-up? In asking this question, it is interesting to note the comments made by the minister in his second reading speech and then contrast the minister's general summary of the bill with the actual amendments that we have laid on the table before us today and that are proposed in relation to the Fair Work (Registered Organisations) Act.

For example, the minister suggests that in addition to improvements in the financial management and disclosure regime, the bill proposes to increase penalties. The minister goes on to say that:

The current maximum civil penalties are $11,000 for an organisation and $2,200 for an individual.

and that the bill—

… proposes to triple the maximum civil penalties to a maximum of $33,000 for an organisation and $6,600 for an individual.

The minister further says:

This represents a significant increase in penalties to reflect the seriousness with which this government, and registered organisations, take compliance with workplace relations law.

However, what the minister has conveniently failed to tell the parliament and failed to tell the people of Australia is that these increases remain civil penalties. Unlike the penalties found in the Corporations Act 2001, it is not possible to imprison a person should they default in the payment of a fine or other pecuniary penalty imposed under the Fair Work (Registered Organisations) Act. Quite frankly, it is not a bad cop-out if you are trying to look tough in the eyes of the public and in the eyes of those poor old members of the HSU who were robbed blind by the union officials, and pretending that you are making radical changes when in reality the government clearly knows it is not threatening its union mates with imprisonment, unlike the laws that cover the corporate sector, which allow for imprisonment when a fine or other pecuniary penalty imposed under the Corporations Act is not paid.

Let us look at the amazing protection provision in the Fair Work (Registered Organisations) Act at section 351. It states:

No imprisonment in default.

In spite of the provisions of any other law, a court may not direct that a person is to serve a sentence of imprisonment in default of the payment of a fine or other pecuniary penalty imposed under this Act.

Let us now contrast that with the provisions of the Corporations Act 2001. In looking at the effect of the provisions of this bill, I took the opportunity of comparing and contrasting the penalty provisions in the Fair Work (Registered Organisations) Act and the Corporations Act. Interestingly, the Corporations Act comes out being a far tougher act when it comes to imposing penalties. Schedule 3 of the Corporations Act lists 346 separate items which attract either fines and/or imprisonment or, in many cases, both, with some of the prison terms being for a period of up to five years and fines of up to $220,000. It is not hard to see the difference between a maximum fine of up to $33,000 under the bill that we are currently debating for the union movement and a fine of up to $220,000 and up to five years' imprisonment for the corporate sector. It is very, very obvious to see why the Labor Party do not want its union mates subjected to the same accountability provisions that the corporate sector are subjected to. It may be convenient for the Labor Party to protect union officials and legislate to provide them with special treatment, effectively shielding them from the rigorous requirements imposed on the corporate sector, but the reality for the Labor Party and the unions is this: today, many of the national unions are huge business conglomerates and they should be subject to the accountability and transparency provisions of the Corporations Act 2001.

Given that section 351 of the Fair Work (Registered Organisations) Act operates as a statutory shelter from imprisonment in default of the payment of a fine or other pecuniary interest imposed under this act, it would be interesting to know from the minister the public policy reasons that underpin why such a statutory shelter exists and why similar offences should only attract a civil penalty under the Fair Work (Registered Organisations) Act, which is modified by statute to prevent imprisonment, yet under the Corporations Act an offender can be both fined and imprisoned for a similar offence. Remember this: the rationale given by the Labor Party for this legislation is that they want to toughen up the accountability provisions in relation to unions. However, when we compare and contrast the accountability provisions that we are discussing today under this legislation for unions with the accountability provisions in the Corporations Act that the corporate sector are subject to, this supposedly tough legislation, falls seriously short.

Section 184 of the Corporations Act deals with good faith, the use of position and the use of information, and consequential criminal offences—that is, five years imprisonment—and has much to commend it as a provision, and should have been included by the Labor Party in the amendments that we are debating today, if the Labor Party were serious about toughening up the laws in relation to accountability for its union mates. But what do we have? We have an absolute failure to include that provision. So the opposition have had to put on the table, in the interests of true accountability, a section 184 amendment. The rationale behind this amendment is the value of such a provision in the Fair Work (Registered Organisations) Act, especially given the performances, or rather lack of, of Mr Thomson and Mr Williamson, as clearly set out in the report handed down by Fair Work Australia. Good legislative practice would dictate that if the minister were dinkum when he said:

In recent weeks and months, conduct by a small number of officials in some parts of one organisation has dented public confidence in all registered organisations in this country—

and I do not disagree with the minister's remarks in that sense; however, I think they are quite banal and do not go anywhere near what has actually occurred—then the minister would have no trouble at all in accepting the section 184 amendment proposed by the opposition. Why is it that when you contrast the proposed amendments to the Fair Work (Registered Organisations) Act from the Labor Party with the penalties under the Corporations Act, it is patently obvious that the government, in its dying days, are yet again favouring its union mates by requiring a lesser standard of compliance and transparency compared with the obligations placed on the corporate sector? The fact that Labor blatantly favour its union mates is also highlighted by the extended dates on which many of the provisions of this bill will come into effect.

Another feature of the bill is clause 2, which deals with the commencement date of the various amendments to the principal act. It is important to note that the government have divided the bill into two parts. Part 1 is to commence on royal assent—in other words, it is to commence immediately; and part 2, which will come into effect on proclamation or no later than 12 months after the date of royal assent. Examples of matters included in part 2, which are to be delayed in coming into effect—possibly up to 12 months—include the following: proposed section 142A, which relates to model rules for policies relating to expenditure; proposed section 148A, which relates to rules to require disclosure of remuneration paid to officers; proposed section 148C, which relates to rules to require disclosure of payments made by an organisation or a branch; proposed subsections 148D(4) and (5), which relate to providing for alterations of the organisation's rules; proposed section 148E, which relates to the disclosure period; proposed section 148F, which relates to model rules relating to disclosure; and proposed section 154D, which relates to rules to require officers to undertake approved training.

I am sure that as soon as the bill passes the Senate, the government will stand in this place and crow that they have fixed the rogue union official problem. But that will be an absolute furphy, because the reality is that an artificial 12-month delay has been built into the bill quite deliberately by the government, during which time many of the important provisions, which are allegedly going to solve the Mr Thomson and Mr Williamson problem, will still not have changed. However, if you want to talk about accountability, it is interesting to note that the directors of a newly registered company are not given a free ride for 12 months, a start-up period of 12 months, in which to comply with the Corporations Act. But, then again, the Labor government have shown how they detest the corporate sector and are ever ready to help out their union mates when they have blatantly breached the trust of the members of the union movement. The government's announcement of the legislation that we are debating here today came, lo and behold, 10 days after the Leader of the Opposition announced the coalition's better plan for accountability and transparency for registered organisations. If I were a betting person, I would put money on the fact that, if the coalition had not made its hard policy announcement, the Labor Party would have quite conveniently and deliberately kept its head in the sand when it came to the accountability of its union mates. Labor is and always has been beholden and indebted to the union movement—you just have to look at the biographies of those on the other side of the Senate to understand why this is so. When you contrast the details of the bill that we are debating today with the coalition's proposal for accountability, it is patently obvious that Labor's plan is deliberately lacking on so many fronts.

Considering it is nothing more and nothing less than a stunt, why have Labor even bothered to bring this legislation into the Senate? It does not provide any worthwhile increase in accountability for unions at all. If the Labor Party were genuine about increased accountability for the unions, then they would come to this place and quite openly adopt the coalition's proposed plan. The coalition's plan will make sure that members of registered organisations, mainly small businesses and workers, can be assured that the hard-earned money that they pay over to the union movement is being used for the right things. We do not want to see union officials getting away with spending the hard-earned money of union members on elaborate dinners for themselves or on using escorts. That is an absolute disgrace and a blatant abuse of union members' funds.

Just as there are rules to ensure that companies and boards of directors do the right thing, there is no reason, quite frankly, that those same rules should not apply to registered organisations and their officers. If there is a reason, please stand up in this place and defend the actions of Mr Thomson and Mr Williamson. I do not believe that there is one member in this place who is able to do that.

Although the overwhelming majority of registered organisations do the right thing, the coalition will ensure that they are strongly deterred from doing the wrong thing at all times and that, where inappropriate action occurs—as we have clearly seen with the HSU—these registered organisations can be investigated by a genuinely independent regulator that has teeth. That is true accountability for unions, and the Labor Party is clearly unable to provide true accountability for unions—only a coalition can do that. Unlike Labor, which is driven by the politics of envy and good old-fashioned class warfare, we in the coalition will be the ones to ensure that workers who pay their union dues in good faith are not ripped off by shonky union officials and that the affairs of these unions, which are often massive business enterprises, are put on the same footing as the corporate sector when it comes to accountability and transparency.

The fact of the matter is: how can the people of Australia take this legislation and Labor seriously, when Greg Combet is a former head of the ACTU, Bill Shorten sat on the ACTU at the same time that Craig Thomson sat on the ACTU? How can the people of Australia take Labor and this legislation seriously, when the events that have triggered this proposed legislation happened right under Labor's noses while Mr Thomson was a member of parliament and Michael Williamson was the president of the ALP? How can you take Labor seriously when they still rely on the tainted vote of Mr Thomson?

5:18 pm

Photo of Michael RonaldsonMichael Ronaldson (Victoria, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | | Hansard source

What a remarkable day—the day on which we have a so-called bill for accountability. What was the first thing that the Australian Labor Party and the Greens did when they had the opportunity to vote for accountability? They voted against the notice of motion moved today by the Leader of Opposition in the Senate, Senator Abetz. Just for the benefit of those who may not have seen this, I will read that notice of motion:

That the Senate—

(a) notes findings by Fair Work Australia that Mr Craig Thomson misused Health Services Union members’ funds for sexual services, personal travel and entertainment and to secure a seat in the Federal Parliament; and

(b) condemns the misuse of union members’ funds as found by Fair Work Australia.

The Greens and the Labor Party fell at the first hurdle in relation to accountability and their support for it. I have brought into the chamber 1,100 good reasons why something urgently needs to be done about the misuse of union funds—the misuse of funds that affect the most low-paid in this country. That 1,100-page document details a litany of the misuse of HSU members' funds. I have said in this chamber before that I would like to see most of us go and do what those HSU members do. I would like to take the members of the Senate and put them into a hospital to clean bedpans and floors and to do jobs that are absolutely necessary but that are low paid.

Senator Polley interjecting

What utter disrespect for those Australian workers have we seen by the behaviour of the HSU. I am amazed that Senator Polley is interjecting in relation to this matter. I would have thought that an interjection by someone with Senator Polley's background in the union movement, effectively supporting the activities of Mr Craig Thomson and the misuse of union funds, is a remarkable interjection in this debate. I want to go back a couple of years to when I first raised this matter in this place on the back of a Fairfax article. I want to go back to the inquiry by Fair Work and I want to go back to what did not happen and the time that it took for that report. In doing so, I want to talk about the coalition's issue with this bill and the coalition's very strong view that, if the Australian Labor Party were serious, they would adopt the coalition's plan for better transparency and accountability of registered organisations. Senator Cash quite rightly indicated that this bill was manufactured by Minister Shorten, who had previously shown no interest in relation to accountability, no interest at all. He was one of those running around the country protecting and defending Mr Craig Thomson, the member for Dobell. Stunned by the findings of the Fair Work report, which Minister Shorten hoped would never see the light of day, he was forced to put some legislation into the other place, and we are debating that today.

As Senator Cash quite rightly said, had it not been for our plan for better transparency and accountability of registered organisations, we would not be seeing this bill before the Senate. We would not be seeing this bill before the Senate, because the so-called Prime Minister of this country, who set up Fair Work Australia, failed the test of propriety in relation to the Craig Thomson matter. She failed the one test that every Prime Minister should stand by—that is, the propriety of their own members. She failed to make sure that she knew what Mr Thomson's real position was in relation to this misuse of HSU funds and she continued to support a man who should have lost her support some 12 months before.

The litany of untruths in relation to this matter started with the member for Dobell writing to caucus members telling them that Fairfax had settled this matter in his favour. And the two caucus members opposite know full well that they received a letter from Mr Thomson pleading his innocence in this matter and alleging that Fairfax had withdrawn their proceedings. What do we now know? We now know that the Australian Labor Party went $250,000 into hock to pay the legal bills of Mr Craig Thomson, which included payments to Fairfax necessitated by Mr Thomson not having the intestinal fortitude to proceed with his defamation action against them and being required to pay their costs. The litany of untruths started there and continued through until Mr Thomson's statement in the House of Representatives.

The best that could be said of Mr Thomson is that he is a great actor. He is not quite as good at telling the truth but he is a great actor. When we saw the member for Dobell standing there talking about the actions of others in this matter and again falsely pleading his innocence, we only had to look at the Fair Work Australia report to see that it was absolute nonsense. This is the same pathetic individual who said, 'Enough is enough', who tried to garner public support. Within a week of that, this pathetic individual pulled a stunt in the House of Representatives designed to embarrass the coalition by voting with the coalition. 'Enough is enough' lasted for one week. If there was any better indication of the bona fides of this man, it was that cheap political stunt.

I want to talk about some of the matters in the Fair Work Australia report in the context of the bill that we are debating today. Probably the most galling aspect of Mr Thomson's statement to the other place was his allegation that he had been set up, that there were other issues surrounding people in the union who had been gunning for him, that they had used his credit card and that they were indeed responsible for this. When you are interviewed about serious allegations involving receiving email messages and text messages, as Mr Thomson was in his discussions with Fair Work Australia, is that not something that you might think about raising? When you get a report from Fair Work Australia with their findings, might that not also be a good time to urgently raise with Fair Work Australia that someone else had been responsible—the upmarket, updated version of 'a dog ate my homework'? Except it was not about a dog eating homework; it was about a man who was misusing union funds. The first indication that was given by Mr Thomson that a dog had eaten his homework was on 2 March this year—an allegation in a letter from Holding Redlich. But, if one had been listening to the 'a dog ate my homework' defence in the House of Representatives, one would have assumed that this was a matter that had been raised by Mr Thomson and that had failed to be investigated. Not only that, but there was a quite personal attack on the investigator in this matter, Mr Nassios, accusing him of bias, of failing to interview certain people—one of whom, it was later alleged, would confirm this union conspiracy. Mr Thomson demanded that a Mr Robertson should have been interviewed. But, when push came to shove, was Mr Robertson prepared to support the member for Dobell in relation to this matter? No, he was not.

So here we have a man who had the opportunity to clear his name in Fairfax defamation proceedings, squibbed it and then required union members in New South Wales to bail him out financially. Then we had another opportunity in a 2½- or three-year inquiry for the member for Dobell to clear his name with allegations that others had been involved in this and that he was subjected to a union campaign. There was not a word in those 2½ years. At the eleventh hour, in a solicitor's letter, the member for Dobell raised this final disgraceful defence.

There should not be one person who is listening to this debate who has been watching these proceedings over the last 2½ to 3½ years who will be left in any doubt as to what motivated the Prime Minister personally, the cabinet and the Australian Labor Party in relation to the way this matter has been handled, the abuse of process that occurred as a result of it and the shutting down of Mr Nassios in Senate hearings by the then minister. It was all designed to extend this matter, all designed in the hope of taking it past the next election.

What we found out in this 1,100-page report and what we found out in subsequent evidence given to the committee is that the last registrar had recommended referral to the police. He said 3½ years ago that there should be a referral to the police. One of the serious issues that we have with this bill is that it still fails to enshrine in legislation the obligation on Fair Work Australia to cooperate with federal and state police authorities. No-one listening to this debate would believe—but it is true—that a government body would fail to and refuse to provide state and federal police authorities with appropriate information to allow them to conduct their inquiries. What an extraordinary abuse of process. What an extraordinary undermining of the expectations of the Australian community in relation to the responsibilities of organisations such as Fair Work Australia.

Why aren't we seeing this in the bill? As Senator Abetz has said, there is no express provision to allow Fair Work Australia to provide a brief of evidence to the DPP. Given the previous problems with this, it is important to give express powers to allow for this to happen. If state police authorities believe that a government body has information which may assist them with their inquiries, surely it is incumbent upon that organisation to provide the information. Isn't it important for the Prime Minister of this country, having been alerted to this matter? Given there is no specific clause in the Fair Work Act which precludes the provision of that information, what a gross dereliction of duty for the Prime Minister of this country not to demand of her minister a direction that Fair Work Australia cooperate with the police. What a remarkable dereliction of responsibility of the so-called leader of this country. It would have been as simple as a phone call to Minister Shorten to direct Fair Work Australia to assist the police authorities with their inquiries.

We know full well why that was not done: because this government has relied on Mr Thomson's vote. This whole process has been driven by the protection of the Prime Minister's majority. This has been a cheap political exercise by a Prime Minister who will go to any lengths to maintain a majority in the other place and therefore a majority to keep her in government. In five, 10, 15 or 20 years, when this whole murky debacle becomes known to a younger generation of Australian, they will look back and ask, 'This is surely not an indication of what happened between 2009 and 2012, is it? How could a Prime Minister charged with the responsibility of appropriate accountability and transparency allow such a thing to happen? How could a government that pretends to fight for and represent Australian workers allow such gross abuse of union members' funds? How could people who clearly knew what was going on sit back and allow this to happen?'

I return again to the bill. If this bill in any way did what was required to address the 1,100 pages of this report then it would have been supported by this side of the chamber. It has glaring omissions which many of my colleagues have already alluded to, and I will not repeat them now. This bill does not meet the requirements— (Time expired)

5:39 pm

Photo of Concetta Fierravanti-WellsConcetta Fierravanti-Wells (NSW, Liberal Party, Shadow Minister for Ageing) Share this | | Hansard source

I will following on from Senator Ronaldson's comments. Since August last year, since I have had responsibility for Dobell as patron senator, I have placed on the record in a series of 12 speeches the sordid history that has become the saga of Mr Thomson and not just his dealings with the HSU but a whole range of other activities—his associations with Mr Williamson and the various connections between Mr Thomson, Mr Williamson and former Senator Arbib and other members in this place.

Senator Ronaldson made mention of the payment of legal fees. I put this on the record five times last year when I asserted that Senator Mark Arbib had brokered the payment of a quarter of a million dollars for Mr Thomson's legal fees. Not once did Minister Arbib come into this place and refute the assertion that I had made. The reason he did not is—certainly this has become very common knowledge in New South Wales circles—that that is precisely what the Labor Party did. There were payments that were made before and there are payments which have subsequently been made to cover Mr Thomson's legal expenses to prevent him from going bankrupt and therefore having to leave this place. So it is not surprising at all that Senator Abetz's motion today was not supported either by those opposite or by their Greens alliance partners.

This evening I would like to make some comments in relation to the bill before us. The revelations surrounding the HSU demonstrate that there is an absolute need to ensure accountability for the hard earned union fees paid by members. Just before, I spoke of workers in the aged-care sector. What is now emerging as another grubby little deal that has been done is in relation to the workforce compact in aged care. Let us see who is going to be the beneficiary of that workforce compact, because you can bet your bottom dollar that is going to help one of the three health unions, the HSU, back into business.

We know that some organisations have used money for inappropriate purposes and breached existing rules. This is why the law desperately needs to be changed. We know that the investigation into the HSU took three years. We have seen the failure to cooperate with the police and Fair Work Australia claiming that they could not prepare a brief of evidence to the DPP. This bill does not go far enough and it fails to deal with the real issues that were brought up over the course of this investigation.

What are the issues with this bill? Well, Fair Work Australia is still in control. This bill will continue to allow Fair Work Australia to be responsible for registered organisations. Given the concerns that have been expressed in relation to Fair Work Australia's ability to do its job, that is a real issue. In this bill we are seeing Bill Shorten's plan, a former union boss who is going to regulate for unions—

Photo of Helen PolleyHelen Polley (Tasmania, Australian Labor Party) Share this | | Hansard source

Madam Acting Deputy President, I rise on a point of order—

Photo of Claire MooreClaire Moore (Queensland, Australian Labor Party) Share this | | Hansard source

I take your point of order. Senator Fierravanti-Wells, you should refer to the minister as Minister Shorten or Mr Shorten.

Photo of Concetta Fierravanti-WellsConcetta Fierravanti-Wells (NSW, Liberal Party, Shadow Minister for Ageing) Share this | | Hansard source

I will now go into this and look at some documents that have been released to Senator Abetz which also form part of the documentation that was additional to the Fair Work Australia report. Having had the benefit of reading all that material, I would say to the Senate that it is not just the two volumes of the Fair Work Australia report that list a litany of problems that need to be rectified. When one looks at and reads all the supporting material—the seven folders of material that back up what is in that report—the sordid saga is even more colourful than what is in the public arena already. One of those documents is an email dated 30 June 2009, the day before Fair Work Australia came into existence. In that email, the industrial registrar told the investigating officer to refer this matter to the police. That email from Mr Doug Williams to Terry Nassios was copied to three other people, one of whom, Ms Carruthers, was an integral part of this investigation. The email says, 'There should be a clear plan and actions arising from the outcome of the inquiries to date, including inter alia any actions and referrals to other authorities—for example, the police because of identified malfeasance or to professional licensed bodies.' And so on.

Fair Work Australia already had in its possession documents provided by Slater and Gordon, which are referred to in the HSU report. In a letter from Slater and Gordon to Mr Nassios dated 16 June 2009 there was enclosed the BDO Kendalls report, which I have had the benefit of reading. And it makes for very interesting reading. That report explains why Mr Williams told Mr Nassios that he needed to pursue police inquiries, and that was back in 2009. Fair Australia had that within their purview—they had that information—and they went on a go slow, and the rest is history. But it is very clear that, as at June 2009, criminal investigations needed to be undertaken. It is also very clear what has happened since then.

One needs to understand the Fair Work investigation to understand the background to this bill. The coalition has been critical of the investigation. The final report is substantive—it has 1,200 pages, 900 of which deal with the former secretary of the HSU, the now member for Dobell. Chapter after chapter deals with unauthorised expenditure of union funds for Mr Thomson's personal benefit in his campaign to become the member for Dobell, as well as with major contraventions by him in relation to the HSU national office.

If Fair Work Australia went on an institutional go slow, the Australian Electoral Commission went on an institutional fast forward, because they could not wait to get rid of this matter and did so as quickly as they could. It is very clear from the evidence that has been given at Senate estimates that the Australian Electoral Commission, notwithstanding the material that was on the public record, failed to take proper action to prosecute in relation to breaches of the Australian Electoral Commission legislation pertaining to Mr Thomson's efforts in Dobell. If I was able to find information pertaining to Coastal Voice, why wasn't the AEC? More importantly, why didn't the AEC pursue the matter so that prosecutions could be undertaken? They let three years pass and now throw their hands up in the air and say, 'Sorry, we can't prosecute because the time has passed.'

These documents report lavish expenditure. As Senator Ronaldson, as shadow minister for ageing, has said, the funds of many low-paid age care workers have been wasted on escort agencies, travel, restaurants and cash withdrawals. Indeed, from reading the report and the seven folders of support material it is very easy to see why Fair Work Australia concluded that the evidence of Mr Thomson was false and misleading. I invite those opposite—and I am sure that you do not have the courage to do this—to read all these documents. But if you do you will know why that conclusion was reached. This man totally and utterly abused the trust of some of the most low-paid workers in this country. And it compounds the injury his outrageous expenditure caused them for them to then see the many pages devoted to Mr Thomson's bottom of the garden fairy stories. As Senator Ronaldson put it, Mr Thomson claims are even worse than the excuse of 'the dog ate my homework'.

We have seen over the years repeated attempts to shut us down at estimates and close down questioning. But eventually, when Mr Thomson is no longer politically valuable to those opposite, they will drop him like a hot potato. Then he will be out there fending for himself, potentially facing the investigations and dealing with any matters flowing from those investigations, particularly in relation to the ongoing New South Wales and Victorian investigations.

When one looks at those records, particularly the ones in relation to the escort agencies, they not only tell the story of misuse but also raise questions that will eventually be answered. Were these services used by Mr Thomson? We know he was the sole cardholder who paid for the services. One very big question is: was Mr Thomson the only user of those services? He was clearly the person who paid for them, but was he the only person who used those services? One very big question needs to be answered: was Mr Thomson alone or were there other people involved? I am sure that at some stage history will reveal whether there were other people with Mr Thomson at the time and whether this was not just misuse of funds but a cover up to protect those other people. I can assure those members opposite that there are certainly people out there who do know what is going on and one can only hope that the New South Wales and Victorian investigations disclose those matters to us so that we can reveal them on the public record. Let us now look to the amendments that are proposed by the coalition. It is very clear that this legislation is not going to achieve what needs to be done. Therefore, Senator Abetz will be proposing a series of amendments that will go to rectifying the major deficiencies in the bill—that is, bringing penalties in line with the Corporations Act, and Senator Abetz has discussed those. What is very important and is clear from the documents I have read is that there needs to be proper procedures in relation to disclosure of information to the police. It is vitally important that it be made abundantly clear that the general manager and staff of Fair Work Australia must be able to fully cooperate with police at all stages of an investigation, including proactively providing information to police. Certainly, the government's amendment in this area does not go far enough.

One only has to look at some of the exchanges that occurred between Victoria Police and Fair Work Australia. They are absolutely ludicrous. Victoria Police asked: 'Can you provide information and material in relation to investigations of allegations of Craig Thomson's actions by the Health Services Union? This is required to assist in the progress of the current Victoria Police criminal investigation. Specifically, can you assist me with answers to the following questions?' We then get some mealy-mouthed response from Fair Work Australia that totally and utterly demonstrates their lack of willingness to cooperate with the police—they hid behind some spurious, silly responses.

As a former officer at the office of the Australian Government Solicitor I must say that whoever wrote that report ought to go back to law school. Quite frankly, it is absolutely ridiculous that an organisation in Australia like Fair Work Australia can say, 'We cannot help the police when we are conducting a major investigation.' That really does need to be tightened up.

Then there is the issue of disclosure of information to the Director of Public Prosecutions. We had the ridiculous situation where Fair Work said, 'We cannot provide briefs.' But if you go back to the annual report of Fair Work Australia you can see that in the past Fair Work Australia has spent money in preparing briefs to legal bodies. So why couldn't they do it with the HSU investigation? I will leave that question open.

Before I conclude my remarks I would like to go to the importance of this legislation. You can bet your bottom dollar that if this sort of thing was happening in the HSU it also was happening in other unions. We have seen this in comments made by former Attorney-General Robert McClelland in relation to another union that point to circumstances that ought to have been investigated. Most particularly, the Herald Sun said that Mr McClelland revived a 1990 union scandal that Ms Gillard must have thought she had buried. It is one that involved her then boyfriend, Bruce Wilson, accused of misappropriating $500,000. The Herald Sun said:

This is a story a furious Gillard last year managed to shut down, shouting in private calls to newspaper executives and obtaining the retraction of an entire column in The Australian.

  …   …   …

And in Parliament on Thursday, he [Mr McClelland] finally did speak up—saying just enough to hint at one reason he may not think Gillard should be Prime Minister.

He spoke during debate on the Government’s Registered Organisations Bill, brought in to crack down on corrupt union officials in the wake of the Health Services Union affair ….

McClelland told Parliament the Bill did not go far enough, and should also force the guilty to pay back what they’d taken. Then came the sting. McClelland said his thoughts were influenced by a case involving Gillard when she was a solicitor.

The article quoted McClelland:

"I know the Prime Minister is quite familiar with this area of the law, as lawyers in the mid-1990s we were involved in a matter representing opposing clients. Indeed, my involvement in that matter has coloured much of my thinking."

The article continued:

McClelland specifically cited one of many legal moves in an Australian Workers Union factional brawl at the time, with AWU Victorian secretary Bruce Wilson named as a respondent.

McClelland is listed as a solicitor in that matter, but Gillard or her firm are not, suggesting McClelland was referring generally to the union fighting …

A litany of articles have been written about this. It is a matter that has surfaced in the past and I am not surprised that the Prime Minister has sought to bury it, because as the Herald Sun article points out:

One AWU official McClelland represented, Ian Cambridge, even called for a royal commission, but the union ran dead on the case and no one was charged.

Gillard appointed Cambridge a Fair Work Australia commissioner in 2009. Gillard is involved in the scandal not just because she was Wilson’s partner, but also because she gave him legal advice, with her firm Slater & Gordon acting for his union.

You can bet your bottom dollar that if it happened in the HSU it also happened in other unions, and that is what needs to be investigated.

5:59 pm

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party) Share this | | Hansard source

I rise to speak to the Fair Work (Registered Organisations) Amendment Bill 2012 and I follow the very strong argument put by the senators who have been really pursuing this issue since its inception. Senators Abetz, Ronaldson and Fierravanti-Wells have been very strong in their prosecution of the issues relating to Fair Work Australia and the issues we have been speaking about tonight. It would be great if there were some more ALP members to stand up in support of the amendment before us.

The bill seeks to increase the accountability, financial and otherwise, of registered organisations and their office holders. It also looks to strengthen the investigative powers of Fair Work Australia. The bill will, according to the literature, require that the rules of all registered organisations deal with disclosure of remuneration, pecuniary and financial interests; increase civil penalties under the Fair Work (Registered Organisations) Act 2009; enhance Fair Work Australia's investigative powers; and, require the provision of education and training on governance and accounting obligations to officials of registered organisations.

  I am a member of the Senate Education, Employment and Workplace Relations Legislation Committee and I participated in an extremely brief inquiry into this bill. The committee convened last Friday—Senator Abetz did the heavy lifting on this and I am thankful to him—when we examined this piece of legislation. The general commentary from those participating in the inquiry was that they needed more time to examine the bill, given that today is Tuesday and we are about to vote on it.

The coalition is firmly of the belief this legislation does not go far enough. Predictably the government has ceded to the union movement and walked away from a real opportunity—created, most of us would say, from events where everybody knew full well what was going on—to require the same level of transparency and the same level of accountability from registered organisations, as is expected from companies and their directors. The ALP was moved to act by announcements made by the coalition on this issue. It has been known for a very long time by those who have worked in the union movement, or have friends who have worked in the union movement, that there have been unions that are good at governance and use members' money appropriately while advocating strongly in workplaces and communities around our country for their members' benefit, and then there are unions and executives who have not done the right thing. It has not just been the example currently before us; it has been going on over a long period and in a wide variety of places.

I would suggest the ALP has been moved not by an altruistic motive to clean up unions, with a newfound desire to spread accountability and transparency, with which they have obviously become so enamoured, but rather the fact that the coalition have put forward their particular policy on registered organisations and something had to be done to get this issue off the front pages.

The saga involving the Health Services Union, of which there has been endless media coverage, has clearly and unmistakably demonstrated a need to ensure that registered organisations use members' money for appropriate purposes. When we look at the Health Services Union, we are talking about the lowest paid workers in our community who have joined their union in good faith, as I said, to advocate for them within their workplace and within the wider community. To have their contributions to that union misused in such a way is an indictment. The HSU, while perhaps leading the race to the bottom, are not alone in their display of entrenched yet unacceptable behaviour.

The coalition have several concerns with this bill. Proposed subsections 148A and 148B of the bill require all registered organisations to have rules dealing with disclosure of remuneration, relevant non-cash benefits and personal interests of officials. Proposed section 148C provides for rules that require registered organisations to disclose those payments to its members. The coalition, as I previously mentioned, firmly believe that the requirements of officials of registered organisations should be in line with directors and companies under the Corporations Act. The culture that has been able to fester in a number of registered organisations is a direct consequence of the lack of transparency necessary under existing laws and should have acted as an impetus for momentous change, not token adjustment around the edges for the sake of the media grab, for the sake of making everyone feel a little better about themselves, but to fundamentally tackle making real and effective change in this area.

The penalties provided for in this bill, while in line with other civil penalties in the Fair Work Act, fall well short of those required under the Corporations Act. This is a great shame and again shows this government's reluctance to take a stand and to show leadership. Our whole nation is screaming for leadership to be shown by this government on a plethora of issues. Whether it is the Murray-Darling Basin Plan, the carbon tax, agricultural education and training, on a range of issues Australians are screaming for leadership and this government refuses to step up to the plate.

Earlier today, Senator Marshall stood in this place and whinged that the coalition 'criticise the government when they do things and when they don't do things'. To Senator Marshall I say: if you got it right, we would not be having to criticise. It is the job of oppositions to raise in the public sphere issues with the government of the day. I think we have been particularly successful on this account, because you have taken up parts of our own policy and implemented them. I think that is as a direct result of the pressure put on the government over this by coalition senators and members.

Going back to the bill, Fair Work Australia took more than 3½ years to complete its investigation into the HSU, whereas we had one day of hearings. The coalition have repeatedly expressed our deep concern about Fair Work Australia's ability to be responsible for registered organisations. We really believe that this should be the role of an independent body. The coalition do have a plan for better transparency and accountability, which we have announced and which, I suggest, has been the impetus for the government's movement in this space.

The bill does not expressly provide for Fair Work Australia to have the ability to cooperate with police, which is quite incredible, given what has gone on. I know Senator Fierravanti-Wells outlined in great detail the issues around information and co-operation with police investigations. This simply cannot stand in a modern professional organisation or scenario. The requirements and penalties are still not in line with the Corporations Act, as I mentioned earlier, and there is no reporting mechanism on why investigations are going beyond their anticipated times.

The coalition's plan will make sure that members of registered organisations, mainly small businesses and workers, can be assured that their money is being used to do the right thing, as I mentioned—advocacy and advice on membership. Our changes and our policy will ensure that registered organisations and their officers are as accountable and transparent as companies and their directors, and play by the same rules. We have to get the thuggery out of union work. It is also clear that Fair Work Australia are not up to the job of making sure that registered organisations are doing the right thing. Either they are a model of incompetence or they are engaging in a deliberate go-slow to protect the government, and previous speakers have outlined the issues there. We actually want a stronger new regulator. Removing the investigative and compliance powers over registered organisations from Fair Work Australia and giving them instead to a new, genuinely independent body, to be called the Registered Organisations Commission, we believe will get better outcomes around transparency and accountability for workers and their unions.

So we have a number of issues with this bill, which I will go through. Fair Work Australia are still in control, and we see that as unacceptable. They have not indicated that they have any real capacity to deal with the issues at hand, such as making registered organisations and unions accountable. Further, under Bill Shorten's plan—

Photo of Claire MooreClaire Moore (Queensland, Australian Labor Party) Share this | | Hansard source

Senator McKenzie—

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party) Share this | | Hansard source

Sorry—Minister Shorten. Under Minister Shorten's plan, former union bosses are going to be regulating current union bosses. In a democracy, there is an issue with institutions investigating their own, because people can be unduly influenced by the relationships they have built. Having an independent cop on the beat protects everyone involved in the conversation.

The rules are still weak, and the penalties are still weak. While penalties are in line with other civil penalties in the Fair Work Act, they still fall considerably short of those required under the Corporations Act. Essentially, we would have one set of organisations in the industrial sphere operating under separate rules with fewer penalties for doing the wrong thing, and that is simply not acceptable. We still cannot provide a brief of evidence, and police cooperation still is not bedded down.

In the context of the inquiry into the bill being conducted for such a short amount of time, I would like to make the comment that the Senate Standing Committee for the Scrutiny of Bills wrote to the Minister for Employment and Workplace Relations, the Hon. Bill Shorten, seeking advice on certain aspects of the bill, such as privilege against self-incrimination et cetera. The employment committee report on this bill said:

The Minister's response is unlikely to be received before the tabling of this report.

So people against the bill have to hurry and get their submissions in, and the coalition have to hurry to prosecute the case, but we are still waiting on the minister's response to the very real concerns raised by this bill. How typical of this government! We are rushed through the bill, this copycat legislation, and our comments are guillotined. This is a bill designed by a former union boss to regulate union bosses that sees former union bosses as the cops on the beat. We want to see an independent body. We need to get serious about accountability in this area. I will conclude my remarks in order to cede to the many coalition senators who are seeking the call. Thank you.

6:12 pm

Photo of Sean EdwardsSean Edwards (SA, Liberal Party) Share this | | Hansard source

I rise to speak on the Fair Work (Registered Organisations) Amendment Bill 2012. I concur thoroughly with Senator McKenzie's comments. I sit on the Scrutiny of Bills Committee, and we did have some concerns about the legislation. As Senator McKenzie rightly pointed out, that committee is yet to receive a response from Minister Shorten with regard to those concerns, but here we are, facing the guillotine.

This bill shows how unwilling Labor is to take on and rein in the arrogance and rampant mismanagement of its union underwriters. It shows that Labor is more interested in talk and spin than in true action and reform. The revelations involving the Health Services Union demonstrate that there is a need to ensure that the money paid by members to registered organisations is used for proper purposes. But, under Mr Shorten's plan, former union bosses are going to regulate union bosses. So the former keepers are now going to regulate the current keepers. How can you take Labor seriously when Greg Combet, now Minister Combet, was the head of the ACTU and Bill Shorten sat on the ACTU

Photo of Claire MooreClaire Moore (Queensland, Australian Labor Party) Share this | | Hansard source

Senator Edwards, you almost got there—Minister Shorten.

Photo of Sean EdwardsSean Edwards (SA, Liberal Party) Share this | | Hansard source

Minister Shorten—he was not when he was with the ACTU—

Photo of Claire MooreClaire Moore (Queensland, Australian Labor Party) Share this | | Hansard source

I know, but he is now!

Photo of Sean EdwardsSean Edwards (SA, Liberal Party) Share this | | Hansard source

and now Minister Shorten sat on the ACTU when the member for Dobell, Craig Thomson, also sat on the ACTU—far too many 'ACTU's all round!

We in the coalition support the need for greater accountability of registered organisations and those who run them. Yet the Labor Party has put forward these weak proposals when it is blindingly obvious that some union bosses will continue to waste members' funds. That is something that, in this day and age, we cannot sustain. The stark contrast between the lifestyles of union officials and their members must be acknowledged. The culture of entitlement for union officials must be brought to heel. We must enact measures that go much further than those contained in this bill. While we will not oppose this measure, we call on the government to support our commonsense amendments.

There is no avoiding it—I must turn my attention to the investigation into the Health Services Union. This shows why reform is needed to end the decades of union arrogance that seems to have crept in, certainly in this sector. Even those opposite cannot ignore the dramatic need for reform, and we would welcome support from the other side for our amendments. The coalition has maintained all along that the process that Fair Work Australia has undertaken on this investigation was severely lacking. Nonetheless, the final report that was produced was substantive and some 900 of its 1,200 pages dealt with the former secretary of the HSU.

The report is a tough read. It details the unauthorised alleged spending of its members' hard-earned money on specific federal election campaigns, on cash withdrawals, on travel, on expensive restaurant dining and on escort services. The report goes so far as to suggest that substantive parts of the member for Dobell's evidence provided to Fair Work Australia were 'false and misleading'. This statutory agency found that the now member for Dobell spent almost $6,000 of his then union members' funds on escort services—hardly the pursuit of members' interests that the health workers who had paid those levies thought their money would be put towards. I wonder how many union officials can really conceive of just how hard it would be and how long it would take their low-paid members to earn the money to subsidise this; I wonder just what the union hierarchy have to say to the hardworking members who fund their insular and seemingly detached lifestyles; and I wonder just how such lifestyles further the interests of these hardworking members, these hardworking people of Australia.

To add insult to injury, Mr Thomson took two months of paid leave from his duties as national secretary of the HSU to conduct an election campaign in October and November or 2007. Again, how can the members of this union have any confidence at all in their officials?

The report has detailed how a culture of disregard for its low-paid members has set in at the highest levels of the HSU. It shows how this was entrenched over many years. Perhaps the most distressing element is that the statutory regulator, Fair Work Australia, took nearly 3½ years to investigate these pressing matters. I remember well sitting in Senate estimates when the officers from Fair Work Australia were being asked the hard questions about why it was taking so long, and the body language, the discomfort, was apparent in the room.

When the report did surface recently, it failed to produce a brief of evidence that could be used by the Director of Public Prosecutions to conduct criminal prosecutions against Mr Thomson. We must ask why this is the case. For a government on the ropes and desperate to avoid airing its dirty laundry, this outcome would seem convenient. It seems successive Rudd-Gillard Labor governments have pulled out every trick in the book to obstruct this investigation from reaching fruition.

As Senator McKenzie outlined earlier, there are many aspects of this matter we still have not been able to scrutinise. But never mind the vulnerable workers whose money has been squandered; never mind that the public want to know the truth and see justice done. Under Labor's proposed bill, there is no explicit provision to allow Fair Work Australia to provide a brief of evidence to the Director of Public Prosecutions. This government now knows that the Prime Minister's own signature institution, Fair Work Australia, is so tainted that it is using this bill to allow the total outsourcing of investigations to outside bodies. Just who will Fair Work Australia outsource its investigations to? Will it be only to those who the general manager favours? And why would certain organisations be favoured over others? To be blunt, this will be a partisan political choice by the general manager which minimises the risk to the union movement. So much for a competent statutory body that is accountable and able to be scrutinised by the parliament.

This whole sordid HSU episode calls into question the competence of Fair Work Australia. How can Australians have any confidence in this statutory body after it has made such a mess? And just why is Fair Work Australia, an organisation so sympathetic to the union movement, not making a better effort to cooperate with police? It just does not pass the front bar test—you could not win that argument in the front bar. If it smells like a pony, it probably is a pony. Under this bill, Fair Work Australia still cannot provide a brief of evidence, and police cooperation still is not bedded down.

This bill, while expanding police cooperation powers, does not make it expressly clear that Fair Work Australia can cooperate with police. Given the track record of FWA, it is important that that be made absolutely clear. Surely the Australian public have a right to expect that taxpayer funded agencies have a duty to fully cooperate with requests from the police. There is also no express provision to allow FWA to provide a brief of evidence to the DPP. Given previous problems, it is important to give express powers to allow for this to happen. Now I turn to the question of disclosure. A comparison of the requirements for registered organisations under this bill against current requirements for corporations is stark and revealing. Under section 300A of the Corporations Act, a positive obligation is imposed on listed companies to make disclosure of the remuneration of their five highest paid executives. In contrast, Labor's bill uses section 148A to propose a far weaker and far less onerous approach for registered organisations. To add to this, Labor proposes that, if even these weaker measures are a bit too much for the unions, they can use section 148D to apply for an exemption from the General Manager of Fair Work Australia—the very same body which has been stacked with former union officials. So former union heavyweights are supposed to be regulating their former colleagues. Such blatant conflicts are the reason this bill is being rushed through before any more recommendations can come out of KPMG's review of the conduct of Fair Work Australia's investigation into the HSU. The Australian public must rue the day the Labor Party used its power to dismantle the Office of the Australian Building and Construction Commissioner and replace it with this toothless tiger.

What then is to be done? The coalition will clean up Labor's mess through a serious of measures to amend the laws to ensure that registered organisations and their officials have to play by the same rules as companies and their directors. I will now briefly outline some of the ways in which, under a coalition government, low-paid workers will not have to suffer the same embarrassing indignity as did the members of the HSU at the hands of their union officials.

We in the coalition believe that registered organisations should be both transparent and accountable to their members in the same way as companies and directors are required to be accountable and transparent to their shareholders. The coalition's plan would ensure that those running registered organisations, such as unions, would have to follow the same rules and regulations that govern the behaviour of companies and their directors. One key amendment will seek to bring across section 184 of the Corporations Act into the Registered Organisations Act. This would make it a criminal offence for bosses of registered organisations to act other than in good faith—that is, it would be a criminal offence were they to use their position dishonestly or recklessly.

While the obligations in the Corporations Act 2001 and the Fair Work (Registered Organisations) Act 2009 are broadly similar, the differences between them in fact are very important. For company officials, using information to advantage yourself or someone else or to cause detriment to the organisation gives rise to a potential criminal offence under section 184 of the Corporations Act 2001. Criminal offences attract the penalty of a fine of up to $200,000 for an individual and/or up to five years imprisonment. In stark contrast, the penalties for comparable offences by officials of a registered organisation, such as a union, are almost nonexistent. Similar obligations under sections 287 and 288 of the Fair Work (Registered Organisations) Act 2009 for using information for personal advantage or to the detriment of the organisation are limited to a civil penalty of up to $2,200 for an individual. There are no criminal penalty provisions.

The coalition's plan will make sure that registered organisations' members, such as small businesses and workers, can be confident that their hard-earned money is being used for the right purposes. Why then does the Labor Party oppose this? For what possible reason? Once again, instead of pursuing good politics and good policy, the government is ignoring a quite legitimate amendment out of, I suspect, bloody-mindedness.

Hindsight is a painful thing, but, if such requirements had been in place for the Health Services Union, some of their officials would have been subject to significant financial penalties and potential imprisonment, just as happens with companies and their directors. There is nothing like the threat of financial penalty or imprisonment to modify the way people behave in the workplace, ensuring that the interests of members or shareholders are protected. Members in this House from all sides of politics should be looking to provide those protections. If everybody is doing the right thing, why not take on these amendments? Why not embrace them so that we can indeed enhance the workplace in the year 2012 rather than miss the opportunity? Under the coalition's plan, the level of reporting and the penalties for noncompliance would be a serious deterrent to the sorts of outrageous conduct we saw in the lavish lifestyle of the union officials of the HSU.

The coalition would also establish a new regulator, named the Registered Organisations Commission. This would have powers broadly in line with those provided to the Australian Securities and Investments Commission. This is necessary to ensure that the regulation of this sector is effective—and conducted with a sense of urgency that was so lacking in the Prime Minister's own Fair Work Australia. This regulatory authority would be required to cooperate fully with law enforcement agencies when it is in the public interest to do so, thus removing the influence of the Labor Party in obstructing and obfuscating serious investigation into cases such as that of the HSU.

This independent Registered Organisations Commission would not only enforce and police the reporting and compliance obligations but would also provide information to members of registered organisations about their rights and act as the body to receive complaints from those members. Furthermore, it would educate registered organisations about new obligations that apply to them and absorb the role of registered organisations enforcer and investigator currently held by the General Manager of Fair Work Australia.

The coalition is encouraged by the recent pragmatic moves made by the Queensland government to amend the existing electoral laws so that unions would no longer be able to give money to political parties—

Sitting suspended from 18:30 to 19:30

7:30 pm

Photo of Gary HumphriesGary Humphries (ACT, Liberal Party, Shadow Parliamentary Secretary for Defence Materiel) Share this | | Hansard source

I rise to speak to the Fair Work (Registered Organisations) Amendment Bill 2012. I have to record a certain wry amusement at the nature of this legislation and the way in which it is coming forward to repair, or so it seems, some fairly obvious and serious flaws in the way in which the Fair Work Act and in particular Fair Work Australia have operated in the three or so years since the act was passed. I was a member of the Senate's Education, Employment and Workplace Relations Legislation Committee which examined the legislation for the Fair Work Act back in 2008. I remember the rhetoric that went around the creation of this new industrial regulator. I remember the hyperbole that came from the government in describing this as 'restoring balance' in the Australian workplace, as removing the iniquities of the previous Work Choices regime, how this was a new era and how, in particular, balance had been struck for the first time in rights and obligations between employers and employees.

It comes, no doubt, as a somewhat humiliating exercise for the Australian government to have to come forward with some fairly significant amendments to the structure of the Fair Work Act to deal with a series of inadequacies in that new structure it created only a few years ago, which were brought to light not by some parliamentary or auditors based process but by the practice of this act working out in the community, dealing with where the capacity of the act to test the circumstances of misbehaviour and malpractice within an industrial situation was found to be woefully inadequate. The investigation, such as it was, into the Health Services Union amply demonstrated for all Australians to see in a way which is not common for industrial processes. We do not generally have lots of public scrutiny of these issues but the investigation into the Health Services Union Australia amply demonstrated to every Australian that the new structure that the Australian government had set up, supposedly to create balance in Australia's industrial landscape, simply was not working.

Today we have an exercise in window-dressing going on, where the government brings forward a bill that is designed to require registered organisations—that is, essentially unions—to deal with disclosure of remuneration, pecuniary and financial interests; to increase penalties for malpractice or inappropriate activity or conduct under the Fair Work (Registered Organisations) Act; to enhance investigative powers available to Fair Work Australia; and to require some education of officials of registered organisations about governance and accountability mechanisms.

Why was it necessary to come back now and do all of this? Why was it not in the original legislation? The answer is that it was never intended to be there. It was never intended that an industrial organisation should be subject to the kind of scrutiny, which we now realise needs to be there, because it was the government's intention at the time that unions should be subject to considerably less scrutiny than were employer organisations or companies that were on the other side of that industrial ledger. It has only been the spectacular failure of Fair Work Australia to properly and adequately bring to light the inappropriate practices in the Health Services Union that has led to the point where the government has had to act to deal with this completely unsatisfactory situation.

I recall the government took great delight in ensuring that none of the amendments proposed by the coalition to the Fair Work Act was to be accepted. Even though there were quite worthy amendments brought forward by the coalition in the course of that debate, they were all rejected in favour of very similar amendments moved by members of the crossbench in the course of that debate, because the government did not want anything the coalition had to say about this legislation to be built into the legislation.

The result is that we come back to the legislation today because it was flawed. It was not properly balanced to deal with the practices at work in some unions in Australia. No doubt, the passing of the act in the first place created the impression in the eyes of some unions that accountability was now off the agenda, that it was perfectly possible to engage in the sorts of behaviour we have seen from the Health Services Union. Because this government was putting the watchdog back on a short leash, this government did not particularly want to hold its partners, the unions, to account and was prepared to compromise the effectiveness and the coverage of the law to achieve that objective. We now are able to repent at our leisure on that very flawed approach.

Even today, as the Senate comes to debate and vote on this extremely important legislation, we are subject to a time limit. There are speakers on the list to speak on this legislation who will not get to have their say because the government has seen fit to guillotine this legislation. How ironic that the Labor Party in opposition complained bitterly about the many hours set aside by the Howard government to debate Work Choices and talked about the travesty of democracy it perpetrated by limiting debate, and now comes to this place and attempts to use that very same guillotine to ensure that debate to fix its own mistakes in its own legislation has limited time. The irony is rich and delicious.

We are told that there needed to be an expedited inquiry into this legislation. The coalition sought referral of the bill to a committee as soon as it was tabled in the House of Representatives on 31 May. The committee was expected to review the bill in five working days. That is just appalling. We were told that the expedited inquiry and the sausage-factory approach to this was necessary because this was a budget bill or a key appropriation. That is strange because it does not appear to have any particular budget implications, not for government at least; it probably does for registered organisations. Indeed, in that abbreviated inquiry, which was ultimately conducted by the Senate, when Senator Abetz asked the department about the nature of this legislation and whether it was a budget bill or a key appropriation, the public servant concerned said:

It is certainly not a budget related bill.

Where is the attempt here to even get the story straight? A number of witnesses who might have been called to address these issues were not available because of the short time in which the committee had to address these issues. Quite rightly, the coalition senators who took part in the inquiry made very trenchant and apposite comments about the shortcomings in the legislation, because of the way in which it was rammed through that committee—and is being rammed through the parliament tonight with limited debate.

We on this side of the chamber support a greater measure of accountability. We support greater disclosure of issues such as the remuneration and financial interests of union officials. We support Fair Work Australia having greater powers to investigate breaches of the legislation. Even now, even in the face of the obvious evidence of a complete failure of process with respect to the HSU, we still find the government dragging its feet in coming to a point where this is dealt with properly. Still, we do not find a sense of parity in the accountability mechanisms required for registered organisations that legislation generally requires of companies and corporate bodies, which are almost invariably the employers of the members of those registered organisations. We still find that the penalties provided in the legislation are weak compared with comparable offences elsewhere in Australian law, certainly when compared with the law with respect to corporations. We find that the rules are still not well defined. The accountability expected of significant officers in organisations is less than that required of managers and directors of corporations.

We still cannot find in the legislation clear obligations on Fair Work Australia to cooperate with the police. Who would have thought in this day and age that Australia's parliament needs to legislate to require that a federal government organisation responsible for making sure that the laws of the land are obeyed cooperates with other organisations in the community charged with the task of enforcing the laws of the land. Why should we have to come back here and require that Fair Work Australia cooperates with the police in investigations into misconduct on the part of, among other things, members of registered organisations? We have to do it because it is not taking place now. Even today, Fair Work Australia continues to refuse to work with police in states such as New South Wales and Victoria, to properly bring to conclusion the investigation into the nefarious activities of certain officers in the Health Services Union. That is absolutely reprehensible. And we are asked again to support a piecemeal approach to this issue when stronger legislation not only is necessary but would be acknowledged by most Australians as being absolutely essential, given the appalling conduct of Fair Work Australia in bringing the misconduct of officers in the HSU to account.

I am concerned about this matter because, I am sure like every other senator in this place, there are members of the Health Services Union who live and work in my electorate, in the Australian Capital Territory, and I am concerned about the lack of protection for those members by virtue of the fact that the government have not got the guts to face up to questions of accountability of the affairs of unions, including unions in the ACT. I am relieved that some of the scandal which has touched other areas of Australia with respect to unions such as the HSU has not yet, to the same extent at least, reached unions in the ACT, but I do hold fears for the future if mechanisms of accountability are not properly built into the laws affecting those unions.

I note that the situation of union leaders in the ACT is probably worthy of some sober reflection. For example, the head of Unions ACT, Kim Sattler, was accused and, I think it could be said, was found to have played a key role in facilitating the protest outside the Lobby restaurant on Australia Day this year. I think it is well established that Ms Sattler connived with a person then in the office of the Prime Minister to incite a crowd to descend on the Lobby restaurant. I gather that the executive of UnionsACT subsequently asked Ms Sattler whether or not her actions brought UnionsACT into disrepute. I am not aware of any particularly serious sanctions being applied against Ms Sattler as a result of that. I would not really expect there to be any particularly serious sanctions against Ms Sattler because, in trying to discredit the Leader of the Opposition in some way, she was no doubt doing the bidding of the trade union movement and of the Labor government. Those sorts of events and that sort of behaviour on the part of high-ranking public officials in Australian unions does underline to all Australians the need for much greater levels of accountability.

The Health Services Union is well represented among low-paid hospital staff in the ACT. I am advised there are over 5,000 workers working for the ACT government's Health Directorate, principally in hospitals and health facilities around the territory. Almost 1,000 of those are at Calvary Health Care. I do not know how many of them belong to the Health Services Union—at least I do not know how many belonged as of the last annual report. It would not surprise me if there were a few less who belonged to the union as a result of the outrageous things that the union leadership has done.

It is important that we establish much stronger ground rules for the operation of unions in Australia. This is not to tar all the unions with the behaviour of bodies like the HSU, but it is deeply concerning that we should find union leaders able to behave in the outrageous way which the long-belated and late-arriving Fair Work Australia report into the Health Services Union described—behaviour which clearly reflected a culture where such union leadership did not expect to be answerable to anybody, much less its membership, for the sorts of things it did. That situation must end. We must not allow that kind of 'operating above the law' mentality to persist in organisations with such enormous power in our community and with so much money at their disposal—money from members who often have, apparently, very little idea of what is going on with the hard-earned dollars they contribute to the union that represents them.

It is unfortunate that tonight the government has brought forward only a tepid response to a very serious problem. It is extraordinary that these issues were not dealt with in a more forthright fashion by the government at the time of the original Fair Work Australia legislation, but at that time it was in no mood to be brooking any reasonable criticism of the way in which this structure was set up. I do not think that this will be the last time that we will have to come back to fix the problems in this regime. The fact that the government has been shamed into doing something, albeit inadequate, is a sad indictment of its commitment to a fair workplace where the rights of all are clearly defined and no particular players have unreasonable power over other players, and particularly over the membership of organisations that they might belong to.

I am concerned that these amendments come too late to effectively put a backbone back into Fair Work Australia when it comes to investigations against the Health Services Union. I am deeply concerned that that investigation has been dragged out to such an enormous extent that it has been characterised by a failure to cooperate with police, that there has been an inability to prepare a brief of evidence to the Commonwealth Director of Public Prosecutions—a matter which this bill does not appear to fix—and that there appears to be some conflict of interest problems with the background of many staff in Fair Work Australia, because of their very strong associations as former leaders of unions. The imbalance in the organisation is a very serious problem. So against that very sober and— (Time expired)

7:50 pm

Photo of Sue BoyceSue Boyce (Queensland, Liberal Party) Share this | | Hansard source

I would like to thank my Senate colleagues on the coalition side for the brevity of the remarks they have made, because we have a long list of people who will be unable to speak when the guillotine drops on this legislation at the behest of the Labor government in 10 minutes time. We had a similar situation for the inquiry into this bill, where there was almost no time for debate or for proper inquiry. We in fact had witnesses to the inquiry who made exactly that point. The Master Builders of Australia said they were concerned about the truncated timetable for the committee's processes in considering the bills. The Australian Chamber of Commerce and Industry said it was regrettable that the timetable did not provide a more fulsome opportunity to consider submissions of registered organisations which will be affected by the bill.

Before continuing, I would like very quickly to run through the nine recommendations that were made by coalition members of the committee and participating members of the Senate Education, Employment and Workplace Relations Legislation Committee in relation to what really should have happened around Fair Work Australia in getting its governance right and getting some honesty into the process. The first recommendation was that the bill be removed from the Senate guillotine motion to allow for full and proper consideration by the Senate and the committee. As a number of other speakers have pointed out, there is nothing time sensitive about this piece of legislation other than that the government did not fix it two or three years ago. The second recommendation is that this bill be subject to a regulatory impact statement in line with the Office of Best Practice Regulation guidelines. Again, what an excellent way of trying to give the public confidence that they have properly overcome the stench that surrounds Fair Work and its current processes of inquiry.

The third recommendation is that the bill be amended to ensure absolute clarity with the new clauses relating to cooperation with police and law enforcement agencies. How bizarre that in 2012 in Australia a body that is uncovering dishonesty and corruption relating to the misuse of members' money should not be clearly subject to police and other regulatory organisations, that we have to put special laws through for it! The people who believe that this should not be brought into the legislation are the same people, I suspect, who would take advantage of those loopholes in the legislation and misuse union members' funds.

The next recommendation is that Fair Work Australia be provided with the express power to prepare a brief of evidence, and we are talking here of the case around Mr Craig Thomson and the appalling situation that it is impossible not to come to the conclusion has been orchestrated by this government in its desperate, naked, smelly attempt to remain as the government. It is just beyond belief that a body such as Fair Work Australia—having examined, discovered and made findings around dishonesty and misuse of funds, as they have in their report—not report that to a body who could then proceed to take action about that dishonesty and misuse of funds. There can only be one reason why this government would not want that to happen and of course it is about its own grubby survival.

The next recommendation is that further debate on this bill be suspended until the August 2012 parliamentary sitting. That would not seem to be too large a wish to have granted by the government. It is only two months that we are talking about. We are, as I said, not talking about time-sensitive legislation, except in the sense that it should have been passed and passed a long time ago and that it should have been passed in a far stronger way than is currently before us.

The coalition have put out a policy in this area called the plan for better transparency and accountability of registered organisations and we have encouraged the government to look at this and to consider implementing it in full. We have suggested that the Registered Organisations Commission should be established within the Office of the Fair Work Ombudsman. It is quite bizarre to suggest that Fair Work Australia could possibly now be considered by anybody to have the credibility or the confidence of any organisation that might be held accountable. We have also suggested that accountability and transparency provisions as well as penalty provisions should be brought in line with the Corporations Act 2001. The final recommendation is that the bill be considered after the conclusion of the KPMG review and further improved with substantive amendments.

There is nothing that is not easy to implement in the dissenting report of the coalition if you want transparent and honest behaviour within the registered unions of Australia. It is quite reasonable for us to expect within our company boards, within the boards that run organisations using other people's funds, such as not-for-profit companies and registered organisations, that we will have a high level of probity, that we will have a high understanding and application of governance and that anyone likely to experience a conflict of interest will say so. We have no problems whatsoever with that being the way this is run. The government, unfortunately, do and the only reason that I can see for not wanting to hold union officers and officials to the same level of accountability as you might senior corporate officials is that the government is a bit worried about what might happen to some of its union mates.

I would echo the words of I think most speakers in saying that I believe that 99 per cent of the officials in our registered organisations are men and women who are there to do the best, in their view, for their membership and to use the funds of their members wisely and carefully for the good of those members. But it is pretty clear—and it is very sad that we have not had an admission of this—that there are some rotten apples in the barrel of the union membership in Australia. We support, as we did whenever we saw corruption or dishonesty within the corporations sector, the same strong application of a carrot-and-stick approach to get good behaviour happening. What we have seen here is a government that is not capable or brave enough to behave in an honest way towards unions and union membership.

The point has already been made, I believe, that Minister Shorten and Minister Combet were members of the Australian Council of Trade Unions at the same time as Mr Craig Thomson was. In normal circumstances, I would say, 'So what?' In the current circumstances, I want a very clear explanation and a very clear account to assure me that they are not in any way involved in the prevarication and the dishonesty that has gone on around this bill, because it is pretty clear that the government is simply hiding behind its power to guillotine, to continue to destroy confidence in the system in Australia.

Photo of Stephen ParryStephen Parry (Tasmania, Liberal Party) Share this | | Hansard source

The time allocated for consideration of this bill has now expired. The question is that the second reading amendment moved by Senator Abetz on sheet 7247 be agreed to.

Photo of John HoggJohn Hogg (President) Share this | | Hansard source

The question now is that this bill be now read a second time.

Question agreed to.

Bill read a second time.

The question now is that all amendments on sheets, 7241, 7243, 7244 and 7245 and amendments (3) to (6) on sheet 7242 circulated by the opposition be agreed to.

The question now is that section 335C in item 15 and item 18 in schedule 1 stand as printed.