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Press Conference with the Minister for Employment, Senator the Hon. Michaelia Cash
All of our industrial legislation, that the Minister has negotiated through the Senate is designed to ensure that unions do their job, represent their members honestly and openly.
Now, during the Heydon Royal Commission, Australians were horrified to see the extent of secret payments made by employers - big business, very often - to trade unions, and in particular, the Australian Workers Union.
And very often, in circumstances where, in an industrial agreement, the union had agreed to trade away workers' entitlements, including penalty rates - the Cleanevent agreement, the Chiquita Mushrooms agreement and others.
Australians were horrified because they said, how can this be lawful? How could it possibly happen that this would not be a breach of the law?
Now, we are dealing with that right now. We are taking up the recommendations of the Heydon Royal Commission, to make it a criminal offence, punishable by up to 10 years in prison, for a union to accept or a union official to accept or an employer to make a payment that has a corrupting motive, a corrupting intent in the sense of encouraging a union or a union official to act improperly.
We are also making it an offence, punishable by up to two years’ imprisonment, for any payment to be made by an employer to a union or a union official, other than for clearly legitimate purposes - such as the remittance of union dues or something of that kind.
Finally, again implementing the recommendation of the Heydon Royal Commission - we are going to ensure that the law compels unions and employers, at the time an enterprise agreement is put to members of a union for their approval, that any payments to the union is fully disclosed, any legitimate payment is fully disclosed. Secrets payments are utterly unacceptable.
Trade unions have a solemn, legal, moral, fiduciary duty to act in the interests of their members.
And we have seen again and again, through the Heydon Royal Commission and subsequently the way unions have let their members down, how big labour, big unions have ignored the interests of their members and traded their rights away in return for payments from employers.
Now, the law applies to all Australians and it applies to unions.
We have seen Sally McManus from the ACTU say that the law should not apply to unions unless they agree with it.
Well, that’s not the rule of law. That’s the rule of unions.
Bill Shorten has said he wants to run the country like a union leader. That’s not the approach of a Prime Minister. That is not the approach of the leader of a nation whose foundation is freedom, democracy and the rule of law. That is the approach of a union boss, like Sally McManus, that thinks their unions are above the law.
Well, they’re not and in one piece of legislation after another, we are restoring the rule of law to the Australian industrial sector, to the construction sector, to unions, to employer organisations and employers - we are restoring and defending the rule of law.
MINISTER FOR EMPLOYMENT:
Thank you, Prime Minister.
This is all about transparency in the workplace.
Employees should be aware and should have full knowledge of any payments that are made between their employer and a union.
This is a government that is committed to ensuring our workplaces in Australia are transparent and they are at all times treated in a fair manner.
This is a real test for Bill Shorten because Bill Shorten says he believes in the worker and yet, time and time again, by his actions, he confirms for the Australian people, he is only interested in big unions being able to do deals with big businesses.
In terms of this legislation, as we know, the Royal Commission, in fact, successive royal commissions dating back to 1982 have stated that secret payments between employers and unions, should be banned.
We should have transparency in our workplaces.
Of course, we know potentially one of the worst offenders when it comes to secret payments being made, is Bill Shorten himself when he was with the Australian Workers Union.
He was more than happy to have money paid by Cleanevent to his union in exchange for trading away the penalty rates of the lowest-paid workers in this country. But also, in exchange for receiving a list of workers that he could conveniently add to the AWU membership to bolster his power within the union movement.
Well, enough is enough.
Successive royal commissions, including the Heydon Royal Commission have said this is not acceptable practice within the workplace.
So the Prime Minister and I are here to announce today that we will introducing into the Parliament laws to ban corrupting benefits.
This should actually be a piece of relatively uncontroversial legislation. And the test for Bill Shorten and Labor is, they like to talk big on supporting the workers. Well, if that’s what you are all about, then quite frankly, this legislation should be able to go through the Parliament in an uncontroversial manner.
What the legislation seeks to do, is to ban secret payments from employers to unions.
Certain legitimate payments will continue to be allowed, such as payments for genuine services that are provided by a union or genuine payment of membership fees.
Criminal penalties will apply to both the employer and the union. The party that makes the offer of the payment will be penalised in the same way as the party that solicits or receives the payment.
As Commissioner Heydon basically acknowledged - it takes two to tango in these situations.
In terms of the penalties, they reflect the seriousness of the offence.
In terms of criminal penalties for payments with the intent to corrupt, they will be up to 10 years in prison and $900,000 for an individual, or $4.5 million for a company.
Penalties for other illegitimate payments, will be two years in prison or $90,000 for an individual or $450,000 for a companies.
As the Prime Minister has also stated though, transparency is key. So when legitimate payments are being made in the course of negotiating an enterprise agreement, the legislation will require the disclosure of these legitimate payments, to the employees so that when they are considering whether or not to vote the agreement up, they will be doing so in full knowledge of all of the payments or benefits that have been given to either the union or the employer.
If money changes hands between an employer and a union, both parties have an obligation to honestly declare what has occurred and why.
As I have said, this is basically all about transparency. If you do believe in integrity within workplaces, if you do believe for standing up for Australian workers, then we should be standing side-by-side here today with all parties supporting this vital piece of legislation, which will ensure that employers and unions that exchange money, are no longer allowed or in the event they are a legitimate payment, this is disclosed to the employees.
Who will determine what is a genuine service and when will the legislation be introduced?
MINISTER FOR EMPLOYMENT:
That will be for the trier of fact to ultimately determine whether or not it is a genuine service. For example, if a payment is being made into a safety training fund, you would need to show that you actually have an actual program of, basically, safety training. You would need to show that that has been undertaken. But you would also need to show that it has been charged out at market rate.
In terms of the legislation, the Prime Minister will introduce the legislation into the House of Representatives on Wednesday.
Isn’t a payment that has a corrupting intent already illegal under existing laws? Isn't what you are announcing just an IR dog whistle?
MINISTER FOR EMPLOYMENT:
No not at all, Andrew. One of the issues that the Royal Commissions, in particular the Heydon Royal Commission made note of, was that across Australia there are differing laws in relation to bribery. There is no consistency and it is often very difficult to prove.
So in particular, in relation to the industrial relation relations regime, Commissioner Heydon recommended that a Commonwealth offence be introduced and a very clear offence which outlawed basically all payments full stop, unless they are legitimate.
And that is exactly what we have done, so you have consistency across the board in the industrial regime.
[Inaudible] is quite different from already being illegal?
MINISTER FOR EMPLOYMENT:
But, basically, across the board different jurisdictions have different penalties. They are often not utilised and as I have said, a lot of it is actually in relation to the corruption of a Commonwealth official.
This is specifically now, in relation to the industrial context and that is what was lacking and Heydon identified that.
This was recommended by the Royal Commission, presided over by one of the most distinguished judicial figures in contemporary legal history. So this was a very thoughtfully considered recommendation which we have adopted.
Had these laws been in place in the past, some reasonably serious CEOs would have found themselves at risk of going to the slammer as well as unionists. Have you got the support of the construction companies, businesses for this?
MINISTER FOR EMPLOYMENT:
Yes, we have. When Heydon was first announced, companies came out and said they supported the recommendations.
One of the things we’ve got to be very clear here - this applies equally to employers as it does to unions.
When you look at the level of penalty, it should send a very, very clear message to any employer or any union, who wants to indulge in secretive payments. It is wrong and compromises the integrity and lawfulness of the workplace.
If the laws are so important, why has it taken 14 months since the handing down of the final report from the Royal Commission to unveil them? Secondly, in your personal view, should “offend and insult” be removed from Section 18C and replaced by “harass”?
Well thank you. In terms of the timing of this, this is a very important priority. As you know, we’ve dealt with some very substantial pieces of industrial legislation already since the 45th Parliament convened, particularly relating to the Building and Construction Commission, Registered Organisations Bill, obviously, the legislation that affected the Country Fire Authority.
But both the ABCC and Registered Organisations have the same intent of restoring the rule of law, accountability. Registered Organisations in particular required union officials and indeed officers of employer organisations to have the same level of accountability as company directors do to their shareholders.
Again, this is the same principle. But this is a very real, significant gap in the law that Justice Heydon identified in the Royal Commission. It should be utterly unthinkable, unacceptable, that employers would be making payments to unions and in particular, secret payments and in circumstances where - as the Commission found in case after case - the context or the result was that employees' rights were traded away.
Prime Minister on Section 18C?
All of those matters are being considered. As you know, there was a Parliamentary Committee that considered it and the Government is considering its response to that.
If Australians were horrified by the findings of Commissioner Heydon, why did you make scant or almost no mention of them during the election campaign?
Well that’s not correct. That is absolutely not correct. The whole election campaign, the election was triggered by those two pieces of industrial legislation which were fundamental to the recommendations of the Heydon Royal Commission.
If payments are disclosed transparently, why go the extra step and ban them? How can you say that corporate payments to unions corrupt industrial bargaining outcomes, but corporate donations to political parties don’t corrupt public policy outcomes?
Well, you’re not seriously suggesting to me that a corrupting benefit should be allowed, as long as it’s disclosed? Is that what you are putting to us?
Why aren’t political donations a corrupting benefit to politicians? Why do you assume they don't impact public policy outcomes?
I wouldn't have thought there would be anybody here actually defending employers paying bribes to unions, but there it is. It is a broad church.
Prime Minister, what chance do you believe you’ll have of getting this through Parliament? Are you expecting the Labor Party to come on board with this?
Well they should. Look, the Labor Party is not going to take advice from me on industrial matters, I know.
When union membership is declining, we know that. Having said that, the power of a relatively small number of very cashed-up militant unions - CFMEU most prominently - is getting greater and greater within the union movement. You can see the culture of the CFMEU, the lawless culture of the CFMEU, is overtaking the Labor movement.
Bill Shorten is not a Labor leader in the mold of Paul Keating and Bob Hawke. He is a wholly-owned subsidiary of the CFMEU.
You see Sally McManus there, defending the lawlessness of the CFMEU. The head of the ACTU saying unions don't have to obey the law. If they don't like the law, they can disobey it. That is exactly what the CFMEU says.
So that’s the type of Australia that Bill Shorten wants us to be. He wants an Australia where there are two classes of Australians; those who obey the law – that’s most of us - and those who don't have to, unless it suits them, and that’s the CFMEU and the AWU and some of these unions.
Now if the union movement is fair dinkum about restoring its credibility and its integrity and recovering its membership, then it would have backed this in. Just like as it would have backed in the ABCC and the Registered Organisations Bill. But the reality is, we know that Bill Shorten - as I said - he is completely controlled by some militant unions who have utter contempt for the law of the land.
What we are doing is ensuring that the law of the land does apply to them, that the law is strengthened. We are doing so in order to protect the very members of those unions who have so little regard for the laws of our nation.
Prime Minister, on the GST distribution, a poll in The Western Australian on Saturday showed five federal Liberals would lose their seat and a big reason for that is the anger over the GST injustice that WA gets over the distribution. 92 per cent of West Australians say that it’s important that you act on that before the next election.
Can you give a commitment that you will take on board those concerns, rather than waiting for several years? Four years, which Treasury’s estimated before WA’s share recovers to 70 cents. Will you act sooner on that?
Well, we explained during the last year - and I have been very consistent about this - that we understand the sense of grievance that West Australians feel. Michaelia of course, is a West Australian Senator.
MINISTER FOR EMPLOYMENT:
West Australian Senator.
We understand that very well. I am the first Prime Minister to take action on this.
What I said was, in consultation with Colin Barnett and my colleagues, I said, we will have an opportunity in several years’ time - and the estimate at that point was 2019-20 - when the Western Australian GST share, under the formula, rises back up to 70 per cent. That was the West Australian Treasury’s estimation, not mine. I said, that is an opportunity then, to set a floor so that nobody loses. But then, West Australians will feel, as indeed will citizens in other states, that no state's share is going to sink down to the levels of 30 per cent and so forth, where Western Australia that found it.
This is what I did. I made that commitment to seek to achieve that. I wrote to all the Premiers and Chief Ministers, I raised it at COAG. I was attacked, unrelentingly, by the Labor Party, including by Mr Shorten.
So, really, the question now is we will seek to achieve that. That is our goal, we think it is fair and it is achievable with goodwill.
But the fiercest opponents of what I proposed, were Bill Shorten - federal Labor leader - and the Labor Premiers, including South Australia, Victoria and Queensland. So the challenge for the new Labor Premier of Western Australia, is how is he going to get his own party onside? That’s the real question. Because Labor is absolutely rock solid at the federal level, so far anyway, in defending the existing arrangements on the GST distribution.
I believe there is an opportunity to set a floor. But to do so at a time when nobody is actually going to lose. That’s the point. I have been completely consistent about that.
I know there has been some reporting in Western Australia that I had made a commitment that was different to that, but if you look at my statement in August, to the West Australian division of the Liberal Party State Council, and subsequent statements, they have been completely consistent, including the correspondence I had with the Premiers.
I saw somewhere it said I hadn't raised the matter with the Premiers, I did. I raised with them both in writing and in a meeting. Now, we might just have one more?
Section 18C of the Racial Discrimination Act, are you expecting the Government's position on that issue to be resolved this week? Why won't you say what your own personal view is?
Well I am the Prime Minister. So the Government has a view on matters of this kind, the Government will have a response. It will be the collective response of the Government. Perhaps one more?
On penalty rates, do you plan to respond on penalty rates to the Fair Work decision this week, will you be recommending take-home pay orders?
MINISTER FOR EMPLOYMENT:
Yes, we will be making a submission in relation to chapter 11 and the transitional provisions. In terms of what we’ll be recommending, I won't be disclosing it here obviously. That it is something the Government is considering.
Mr Turnbull are you going to carry through your threat during Western Australia election to fund only the Coalition's planned roads project and not fund the new Labor government's rail project?
Michelle, the Freight Link project - which is what you are referring to - is a high-priority project of Infrastructure Australia and we have committed to fund that.
The new Western Australia Labor Government does not want to proceed with it and so therefore doesn't want our money for that project. They would like to secure Federal Government support for alternative infrastructure projects. The position is that we will look at them and Infrastructure Australia will look at them. We’ll examine them in good faith and in the normal way.
Again, it would be quite absurd to do anything else. You can't just say you have got a project that is fully developed, fully costed, fully analysed, prioritised by Infrastructure Australia and then when the Government comes in and says despite all that, we don't want to do it, here, commit the same amount of money to another project, that is at this stage basically a press release.
There is no business case. There is no plan for it. They have got a way to go. We are all in favour of investing in infrastructure and we do so to the tune of tens of billions of dollars around the nation. I am an enthusiast for urban rail, I think we’ll need more urban rail in all of our big cities. I welcome governments that want to get on with that.
But as to manner and the extent of Federal Government funding, that is going to be on the basis, after due consideration, of what is proposed. This idea that the State Government can put out a press release and then say give us the money, on the basis of the press release.
Australians would not think well of my government if we were as careless as that in dealing with their taxpayers' dollars.
Thanks very much.