PARLIAMENT HOUSE, CANBERRA: There are only two reasons that we are here debating the bill in front of us, the Fair Work (Registered Organisations) Amendment Bill 2012. The first is because of the sheer stench surrounding the Craig Thomson affair. Such was the stench that it has embarrassed the government into taking some action against some of its mates in the trade union movement through this bill. But, more importantly, it is because the opposition put out a plan to actually tackle the problem with unregulated unions just 10 days before—the Coalition’s Plan for better transparency and accountability of registered organisations. That is the real reason that we are here discussing this bill today: we have put forward a proactive proposal to deal with some of the issues which were raised throughout the Craig Thomson affair, and Labor is now rapidly trying to catch up and put this bill forward so that it can pretend that it is also taking some action. But it is a good thing that we are taking some action, and it is a good thing that we are debating trade unions and how they are regulated, their transparency and the amount of protection which is provided in legislation.
Frankly, at the moment, there is insufficient protection for union members. There is insufficient transparency. There are insufficient penalties applying to people who have breached the legislation. And the 1,200 page report of Fair Work Australia made this point very, very clearly because it found dozens upon dozens of examples of breaches of the law by the Health Services Union. Nearly every Australian would now be aware of some of these breaches where thousands of dollars—indeed, hundreds of thousands of dollars—had been misappropriated by union officials within the Health Services Union, on cash advances, on exorbitant travel expenses, on fine dining for the union leaders, and of course on escort services. In addition to this, almost $300,000 was appropriated by the Health Services Union for the election campaign of the now member for Dobell who, at the time, was the leader of the Health Services Union.
So it was very clear in that 1,200 page report that the regulations and transparency were not sufficient to capture some of those issues. Is this the only union where some of these practices are going on? We simply do not know. We do know that, for example, in the construction union, all sorts of unlawfulness was discovered by the Cole royal commission—a royal commission which found over 100 breaches of the law, on building and construction sites, by the building and construction trade union. So clearly there is a case that the regulations which govern trade unions are insufficient. There is clearly a case that that is happening. We actually have bipartisan agreements that the current laws are insufficient.
I am pleased to see Minister Combet here because he also agrees with this proposition that the existing laws are insufficient to properly regulate and provide protections for trade union members today. Where we do disagree, though, is on the plan put forward to tackle this issue. We believe that this bill the Minister has put forward goes some of the way, but not far enough, and fails to deal with all of the issues which are uncovered and documented in the 1,200-page Fair Work Australia report.
There are four key problems with this bill which we believe need to be amended. Indeed, the Coalition is putting forward amendments to deal with them. The first is that the bill before us still sees Fair Work Australia in control of investigating registered organisations. We simply believe that they are not up to the job to do that. We think that they have insufficient time and insufficient focus to do that. This was evidenced by the Fair Work Australia report into the Health Services Union. It took over three years to do the investigation. The report should have taken much less time than that. Furthermore, at the end of that 3½ years it was still not in a sufficient state for the police, the department or the Director of Public Prosecutions to be able to use it to action some of the egregious breaches which were outlined in that report.
So Fair Work Australia is not the right body to properly regulate and scrutinise registered organisations. We believe there should be a separate independent expert body which does that. Consequently, we are putting forward an amendment which would suggest that a registered organisations commission be established which would oversee registered organisations and would have the teeth to be able to properly scrutinise them and properly see that trade unions are being held accountable to their membership.
The second problem is that the bill does not expressly provide for Fair Work Australia the ability to cooperate with the police. Given the track record of Fair Work Australia, it is important that this be made absolutely clear in the bill. It has to be made clear that Fair Work Australia must, in the appropriate circumstances, provide a brief of evidence to the Director of Public Prosecutions, if required. This should not be required, of course, in ordinary circumstances. In ordinary circumstances you would think that Fair Work Australia itself would actually go about doing the right thing and developing that brief of evidence to go to the Director of Public Prosecutions. But, again, the case of the Health Services Union proves that we in fact do need to make this part of legislation, because they spent 3½ years investigating this case and yet still did not provide the proper brief of evidence to the Director of Public Prosecutions. Furthermore, they did not cooperate with the police throughout that 3½ years of the investigation, despite the predecessor body to Fair Work Australia expressly recommending the day before Fair Work Australia was established that it should in fact put the Craig Thomson affair to the police. But they did not. We think that is disgraceful. We therefore think that there needs to be separate legislation to properly specify this in the relevant legislation which governs trade unions.
Third, the requirements and the penalties in this bill are still not in line with the Corporations Act. We think there should be a simple principle enacted in this legislation. That simple principle is that what is good for corporations is good for trade unions. In relation to penalties, for example, if the actions which were taken by the Health Services Union officials in the Craig Thomson affair occurred inside a company then individual directors may have been criminally liable for some of those things, may have had a $200,000 personal fine and could have landed in jail for up to five years. That is what occurs in the Corporations Act with the sort of egregious behaviour that we saw inside the Health Services Union. But underneath the Fair Work Australia act the penalty is up to $2,200. So you can appropriate hundreds of thousands of dollars and you can spend union members’ money on prostitutes, on cash withdrawals or on your re-election campaign and the penalty is $2,200. And it is a civil penalty only.
We should be listening to Mr McClelland, the former Attorney-General, as well, who suggests that actually, if people are found guilty of such an offence, not only should they suffer greater penalties in line with the Corporations Act but they should have to repay that money because it is often the money of the lowest paid workers in the country that we are talking about which the trade union leaders are misappropriating for their own purposes. We do not think that is good enough. Consequently, we are putting forward amendments to bring the penalties in line with the Corporations Act.
This also goes to the issue of transparency and basic fiduciary obligations. Everybody knows that if you are a company director or a company executive you have to outline exactly where the money is being spent by a company. Executive remuneration is transparent and other measures are transparently laid out in relation to the company’s accounts. We also know that company directors have to operate under fiduciary obligations. That is, they have legal obligations to act in the best interests of their company shareholders. Again, we think the trade union leaders should equally have to follow those basic guidelines. We will, again, move amendments to ensure this.
My final criticism is that the bill before us has no reporting mechanism on why investigations are going over time. It should not, frankly, have to take almost four years for an investigation to occur, with no explanation as to why it is taking almost four years.
In conclusion, this bill gives the perception, the pretence, that the government are concerned about corrupt practices inside trade unions, but it is just that—a pretence. They are not fair dinkum about how they are regulating trade unions through this bill. The measures do not stack up against how companies are regulated and how company directors are held accountable. The measures do not stack up in relation to transparency, and we believe that they should. The measures do not stack up in relation to the proper penalties which apply to company directors. They should equally apply to trade union officials.
Finally, the measures do not stack up with regard to the independence of the authority which has regulatory oversight of trade unions. There is an independent body which oversees the regulations governing corporations and there should be the same for unions.
We are pleased that we are debating this, but we are putting forward serious amendments which we believe the government should enact. They should adopt those amendments. They would strengthen the bill and give confidence to all Australians and to all union members that their money is being protected and is being used wisely by the union leaders.