Tuesday, 29 May 2012

More wrong with the FWA than just its name




PETER REITH

There is a lot more wrong with the entity Fair Work Australia (FWA) than its name. As the new president, Ian Ross, said yesterday before a Senate committee, people cannot distinguish between the Fair Work Act and Fair Work Australia, which comprises a tribunal which used to be called the Australian Industrial Relations Commission (AIRC), and the compliance organisation, otherwise known as the administration, which is run by a general manager.

The president has no power over the general manager.

The use of the words 'fair work' is just an example of Labor Party spin. There is nothing particularly fair about the FWA. As Ross admitted, there are "legitimate questions" about its behaviour and you can be certain it is overmanned and unable to perform its functions under the legislation as demonstrated by the fiasco of the Thomson affair.

When I was the minister for industrial relations, I organised redundancies for members of the AIRC. Like many government organisations, the more people you appoint the more work they find themselves, and FWA is no different.

The FWA was introduced by Julia Gillard. An unintended consequence of the new legislation opened the way for the president of FWA to attend and answer questions in a Senate committee. The only person who realised what had happened, and the opportunity it afforded the Senate, was Senator Mary-Jo Fisher, who then initiated the Senate request to the president to appear before the relevant Senate committee.

The former president appeared three or four times but always complaining his appearance was beneath his status and then campaigned behind the scenes so that he would not have to appear again. Neither the government nor the Greens were prepared to uphold the rights of the Senate. As a result, until the Thomson matter, it appeared that the president would not appear again.

The question now for the new president is whether or not he is prepared to continue to appear before the Senate again. He ducked the question when asked yesterday by Senator Fisher. There is no doubt there is a legal requirement to attend but only if requested.

Mr Ross says the tribunal "must become more efficient and accountable" and "the current process has significantly damaged the tribunal's reputation". These are significant matters which should be the subject of ongoing Senate interest. Therefore the first test of Mr Ross will be his willingness to voluntarily attend future Senate committee meetings. He says FWA is a 'justice' institution but of course it is not a judicial institution and should not be given a waiver from public scrutiny.

It is now obvious to everybody that the administration part of FWA is simply not fit for purpose. This should come as no surprise except that the situation has obviously got much worse in recent years. Too many working in administration have strong links to the union movement and have failed to properly pursue administrative failures by unions. Some years back it used to be said that one state section was closely linked to the Socialist Left.

The only way to really clean up the situation would be to start again with a new organisation with new people and with a very clear set of objectives and a rigorous system to audit the implementation. With this new start, a minister should have responsibility and thus accountability to the Parliament in the same way that the Treasurer is ultimately responsible for the management of corporate compliance. Needless to say, as announced by Tony Abbott sometime ago, the penalties for failure to meet basic requirements of reporting need to be significantly increased.

Mr Ross also says that a more effective complaints mechanism should be put in place to deal with complaints against members. But he is wrong to suggest that the tribunal within FWA should be treated the same as judges.

Firstly there should be a realistic appreciation of the quality of some of the tribunal members. I have notes made by me of comments made by a former AIRC president to the effect that some members were basically duds. You cannot have a fair system unless there are minimum standards required of tribunal members. If minimum standards are not maintained then there should be a way of getting rid of people who are not up to scratch.

Of course, it would help if the duds were not appointed in the first place, and while both sides of politics can be criticised for appointments, it is noteworthy that literally all recent appointments have been union people. There is nothing wrong with union appointments, but when nearly all the appointments come from the one grouping, it's only reasonable to assume that merit has played little part in the choice of new members.

Mr Ross is a member of the Federal Court. When his predecessor was appointed as president of the AIRC, he was also appointed as a member of the Federal Court. There was only one reason for doing so. His concern and mine was that if he did not hold a commission with the Federal Court, then an incoming Labor government could engineer his removal by way of establishing a new body in the same way that Labor did with Justice Staples.

We made him a member of the Federal Court so that he had somewhere to go if needed. We did not appoint him as a member of the Federal Court so as to give some additional status to the AIRC. FWA does not need more status; the world has changed, and the days that senior people in the commission were judges or their equivalent are well and truly over.

Mr Ross refuted claims made by Craig Thomson against FWA and in particular in regards to the vice president. Thomson made a claim, but without anything to back up his statement, so the matter ends there.

But it is true that Mr Lawler was reported in the press (The Australian, February 6, 2012) as having written to New South Wales Police investigating alleged corruption in the HSU "making allegations of criminal conduct".

Any citizen can write to the police, but when that citizen is the vice president of FWA and the partner of a key figure within the HSU, a wiser person might refrain from being involved. And a new president might make the point to his new colleagues, as he said yesterday, "The independence and standing of the tribunal established by the Act is central to the operation of the Act and the attainment of Parliament's objectives."

Tuesday, 15 May 2012

Craig Thompson


Craig Thomson has promised a response to the 1,100-page report of Fair Work Australia. At first he wanted speaking time of 10 to 15 minutes - now he wants half an hour.

Personally, I would give him as much time as he wants. Someone should move an amendment that allows the Member for Dobell to speak for as long as he wants to answer the claims against him. He says the allegations against him are all false, so let him explain how and why he is right and everyone else is wrong.

Rob Oakeshott said Thomson should answer the FWA claims line by line. It could take hours if he has a defence. The Australian public are surely entitled to hear how, as now claimed by Thomson, the reputation of the Parliament has been trashed by persons unknown acting in a conspiracy against Mr Thomson.

Personally, I would like to know who these people are. Is it the man that Thomson once said had paid back $15,000 in relation to credit cards used for an escort agency? Is it his successor Kathy Jackson or her former husband with whom he has been in dispute?

Will he expose the names of those conspirators who since 2004 have been out to get him? Will he tell us their motives?

Will Mr Thomson tell the Parliament why he never went to the police about his allegations? Will he explain why he signed off on his credit card statements even though he now says that the expenditure was not by him and presumably unauthorised?

Will he seek to table documents that show that the cash he took was all accounted for and used for union business? And will he say that using union funds for his campaign was authorised by the HSU membership?

Will he produce minutes of the meeting that agreed to this spending? Or perhaps he will provide evidence that many unions behave this way so he thought his behaviour was OK? Will he produce declarations, for tabling in the House, from other union bosses who have also had their union financially back their political ambitions?

Did Mr Thomson raise his concerns with other trade unions? Has he known of this happening elsewhere in the union movement? Was the alleged threat to Mr Thomson sparked by some factional infighting? Did he seek assistance from his colleagues in the broader union movement or was he terrified that there may be repercussions if he told anyone of the threat?

And will he also explain his relationship with the Labor Party in the period since 2010? When did he meet with the PM? What was said? What were the terms of the financial support he received from Labor? Who was party to that decision? And does he intend to seek preselection again from Labor?

And when he has finished his address will he then think Labor should lift his suspension? Will he think that the police will soon drop their investigations? Will he be looking forward to be endorsed for the next election? Does he expect that his union, the HSU, will want to support him again with the hard-earned wages of low paid HSU members?

There are many questions for Mr Thomson to answer. I doubt he will evoke a sense of sympathy in the electorate; maybe the appearance before the court of public opinion will finally bring him undone. Whichever way it goes, he will have had his say, for now.

For more than three years, Craig Thomson has been protected by Labor and the independents. They are the Thomson backers, the Thomson supporters. Every imaginable tactic to delay an inevitable conclusion of the issues surrounding Thomson has been employed.

For what seems an aeon in politics the Opposition has never given up its questioning his behaviour and Labor's continuing support for him. And yet last week, Tony Windsor, Rob Oakeshott and senior Ministers were finally pressured into conceding the Opposition demand that Thomson explain himself.

They dropped the mantra that the Thomson issues had to undergo due process. Their constant but false claim was that the Parliament could never be judge and jury on Thomson so the only intervention would have to be by due process i.e. the FWA and the police.

Labor reckoned this course was not too bad because these issues can take forever and by the time the courts were involved and then the appeals, Thomson would be out of the Parliament and dispensed.

The trouble was that that tactic was not working. The public pressure and Abbott's fierce condemnation of Gillard became too much, especially when the 1,100 page report from FWA was published thanks to the Coalition's demands in the Senate committee system.

Tony Windsor must now be blaming himself for pressuring Thomson to concede to Coalition demands.

Windsor has reason to worry that he is seen to be too aligned to Gillard so he has come up with another talk fest. He has no intention of pulling the plug on Labor by undermining Thomson. So he invites discussion on a proposal that has been discussed on many occasions, a proposition that has never been agreed on, let alone seen as necessary, in the more than 100 years of our Parliament, and a proposition that would require MPs to submit to someone other than their constituents for behaviour that is not illegal.

Former democrat Andrew Murray says one requirement on MPs could be "to strive to maintain the public trust placed in them". Wow, under that vague obligation lots of MPs would soon be kicked out; at least the lawyers would do well out of the court cases that would ensue – all at public expense.

The only issue for the independents is whether they are remembered as the MPs who kept themselves in their seats as long as possible by propping up a discredited government mired in corruption (the word used by Bill Shorten) or as two MPs who championed higher parliamentary standards.

Until now, Thomson has resisted making any statement. It will be interesting if he does make the promised statement. Don't be surprised if he doesn't turn up.

The Honourable Peter Reith was a senior cabinet minister in the Australian Liberal government from 1996 to 2001 and then a director of the European Bank for Reconstruction and Development from 2003 to 2009.

Tuesday, 8 May 2012

No reforme, no future


Tonight's budget should be interesting although I generally prefer to read it than to speculate about it.

However, what we can say about this year's Australian budget is that it will not be worse than previous Labor budgets. It would have been a lot tighter, but for the prudent Howard years. And our finances are certainly not as bad as the French.

The French are socialists. So it is hardly surprising that the socialists should once again succeed in electing a socialist president. France is run by socialist elites and the labour movement. Nicolas Sarkozy was never going to emulate great economic reformers like Margaret Thatcher (Conservative UK) or Roger Douglas (Labor NZ). His presidency was doomed from the start because he never introduced the economic reforms that are desperately needed in France and elsewhere in Europe.

Sadly the best you could say about Sarkozy is that his departure will be as irrelevant as his arrival. France still needs a leader and now she has Fran├žois Hollande; how sad for France and Europe.

And it's a disappointment for Australia as well because although the US, UK, Canada and a few other countries are reasonably well run and provide the leadership and civilising standards for the international community, a stronger, liberal, free market Europe is in Australia's long-term interests. A weak and fractious Europe ultimately undermines our security and the common values that underpin our society.

The last socialist president, Fran├žois Mitterrand started his term with a series of disastrous economic measures. Fortunately when confronted with the consequences of his policy he retreated, but the damage was done. He left France economically weaker. His successor promised pro-market reform, but failed to implement significant reforms partly due to his inability to overcome vested interests.

The president Hollande might get lucky. If the Sarkozy party in the Parliament can retain its majority in the forthcoming elections then they may provide a good excuse for Hollande to not pursue his announced policies. In this event he will end up a one-term president, like Sarkozy. Maybe then the French people might finally realise that the true path to equality and liberty is a free market; not more government but a lot less government.

Conventional wisdom is that the European economies will muddle through the continuing crisis. The alternative scenario is further economic turmoil. This scenario can't be dismissed. One reason Sarkozy was defeated was because he had no plan for France to confront her economic woes. The economic vacuum he left behind has now helped to open the door to more extreme politics.

Europe has a history of extremists, both left and right wing. If the socialist experiment with Hollande fails, as it is certainly doomed to, then there is every chance of a right wing resurgence. That resurgence was already in evidence in the first round of the Sarkozy/Hollande contest when the Le Pen party attracted more than six million votes. It was also apparent in Sarkozy's anti-immigration stance. The problem is that populist right-wingers will be just as bad as socialists; neither will advance sensible pro-market reforms.

The same could happen in Greece and elsewhere in Europe. The public do not like austerity measures and, more than ever in difficult times, they are itching to hear politicians who will tell them what they want to hear. It is a dangerous development. And so, instead of encouraging politicians who will lead, you get populists who think getting into government is everything.

Of course, Australia and Europe are very different. But there are many similar issues in how to manage a free enterprise economy within a democratic society. Topics like taxation, privatisation, labour market flexibility, free trade, provision of basic services (such as health and education), free speech and monetary policy are common to all the leading economies.

Modern societies now have a lot of knowledge to know how to manage an advanced economy. In many cases the path of reform is clear; the only issue is who has the determination and the leadership to make the reforms a reality. This is as much the situation in Australia as it is in France.

In Australia, we know that a flexible labour market will increase wages and we have recently had real time experience of the benefits of flexibility. This idea is not in vogue now within Labor, but it was championed by Labor in the early 1990s.

We know that governments have to live within their means; today, this is the mantra for the Swan budget. We know that the public do not like privatisation, but it is a good idea and works (ask Anna Bligh, ex-Premier of Queensland and the shareholders in Queensland Rail). We know competition is a great driver of higher living standards and is the best known way to ensure that consumers get what they want. We know that high tax rates kill incentive and too much welfare has the same effect. We also know that if you impose too many costs on business then they lose sales and that costs jobs. So we know that the carbon tax, especially one that imposes higher costs than those on competitors, will cost jobs in Australia.

And we know that president Hollande's policy to lower the working age to 60 will force people out of work and so reduce productivity and living standards. And we also know that more taxes on business, like the mining tax, will only give the Canadians the chance to take investment from Australia and that will lessen work opportunities for Indigenous Australians.

Last year, the budget deficit was about $20 billion but will end up around $40 billion. So do not get excited about a projected surplus of $2 billion knowing it could end up as a deficit. It would be better if the Government announced some long-term reforms that we know would really make a difference. As things stand today, and despite all of our differences, there is little chance of that in either Australia or France. For that reason, the chances are that no-one will be talking about the Aussie budget by this time next week.

Tuesday, 1 May 2012

Gillard's Speaker fiasco


Julia Gillard's proposal to have Speaker Peter Slipper stand aside has no precedent: it is not authorised under the constitution, does not stop Slipper from collecting his $300,000 pa plus salary, and could end up in farce and another blow to the credibility of the federal Parliament.

As to when and how the speaker will stand aside is unknown. His statement in yesterday's press was that he would:

... make a short statement to the House and then invite the Deputy Speaker to take the chair as Deputy Speaker ... (and thereby) avoid what could be a controversial debate on the floor of the Parliament.

What exactly happens after that no-one knows, and clearly whatever the Speaker now says, there is no way of knowing what he will do and say in a month's time or longer.

Slipper might go away for a few weeks and then just walk straight back into the House and take over.

Before the Parliament resumes, the Attorney-General should commission and release a joint opinion on the legality of the Gillard fix. It may be illegal and certainly it is politically flawed. I suggest the persons best qualified for this job would be the Clerk of the House and a respected non-political QC.

Regardless of the legal position, Slipper continues to damage the Parliament and Government, and for that reason alone should be removed. It might be that the court of public opinion is at best rough justice (and I speak from personal authority) but the constitution provides no halfway house.

There is no provision for a speaker to just stand aside. Slipper certainly can't sit on the crossbenches. He will have to stay away from the Parliament altogether.

If there is an election before the allegations against him are finalised, then he might never be seen again. In the meantime, the Coalition should make clear that it will vote against any motion giving Slipper leave under clause 38 of the constitution.

In particular, the Coalition should vote to amend (in order to exclude Slipper) the global motion at the end of the current session that gives all members leave of absence.

Clause 36 of the constitution states:

Before or during any absence of the Speaker, the House of the Representatives may choose a member to perform his duties in his absence.

The word 'absence' is not defined in the constitution or House Of Representatives Standing Orders.

What is quite clear is that Slipper will continue as the Speaker. So if, for example, he later decides to sit on the crossbenches, he would not have a deliberative vote because he is still the Speaker.

If a division were called, members are required under the Standing Orders to move to the left or the right of the Speaker. It seems that Slipper's only option in that situation would be to resume the Speaker's chair and announce, if required, his casting vote.

Another complication and potential farce is if Slipper sits on the crossbenches, in which case he is not absent; it is difficult to see how a deputy speaker can become the acting speaker because the House is only able to appoint if there is an absence.

The appointment of the deputy can be done before the absence of the speaker so there is no reason for Slipper to take the chair when the House resumes on May 8. I presume that Gillard agreed to give Slipper his day in the sun before kicking him out. Who knows why she decided to give him the chair again.

Given that she stabbed Rudd in the back, I reckon that Gillard has a gift for sniffing political blood, especially if it might be her own. The reason she moved against Slipper and Thomson was because she must know that Shorten is after her job. Now.

It's hard to find a good national leader. The best we have had in Australia since World War II have been Menzies, Hawke and Howard. The good ones had years in Government or Opposition before they finally reached high office.

Hawke was different, although as the head of the ACTU he was actively involved in government for a long time.

Hawke also shared another characteristic with successful leaders; he was well-known to the public before he became PM. In other words, he had been around long enough for the public to get know him. There were no surprises with Menzies, Hawke or Howard.

One of the problems with Rudd and Gillard has been that that they were both unknown novices. The media gave the public the impression that they were competent but time has demonstrated that neither have had what it takes to lead and no-one really knew what they stood for.

This was so obvious in the 2010 campaign that Gillard actually said it was time to reveal the real Julia. Imagine John Howard or Bob Hawke making that statement!

The latest non-entity novice to push himself forward as PM is Bill Shorten.

He has just arrived in the Parliament. He has hardly ever had a real job. He is hopeless as a speaker in the chamber. The only government he has experienced up close is the dysfunctional Rudd-Gillard government, and his only qualifications on policy are the National Disability Insurance Scheme which is supported by both sides of politics.

He has been promoted by the media as the rising star and has had a very easy ride. He has not been subject to the policy and personal scrutiny that comes with long service, controversy and policy commitment.

At this stage, he is just another union boss on the make. The one thing he really knows is political manoeuvring and that was on display last week.

Months ago Shorten was letting it be known that he was the man for the top job but he would be a passive player for the moment.

Now what has changed is that, more recently, Shorten has decided to become pro-active. His move on the HSU was the first tangible move he has made against Gillard.

He moved to differentiate himself from Gillard's support for Thomson. It could have been done a long time ago; it was initiated last week for political reasons that suit Shorten.

His second move was his statement that he supported Gillard regardless of the fact he did not know what she had said. It made him a laughing stock around the world but it was his way of pretending he still supports her even though he was differentiating against her.

It was the same as Shorten telling Jon Faine on Melbourne radio that he did not want to be PM. It was just a crude political device for short-term benefit.

By her own description, Gillard talked last weekend about dark clouds overhead Australia. Craig Emerson admitted yesterday that Labor MPs are thinking about changing the leadership but Labor's problem is that the public now want to dispel the dark clouds, and that means an election.

An election would be in the public interest, but not for Tony Windsor and Rob Oakeshott, so the farce looks set to continue although it is hard to believe the current fiasco can go on much longer.