The PRESIDENT (12:32): For the information of senators, I also table letters sent to me by Senator Roberts and by the Leader of the Australian Greens, Senator Di Natale, requesting that I establish an audit of the qualification of senators under section 44(i) of the Constitution. Similar letters were sent to the Speaker of the House of Representatives. The Speaker and I have discussed these requests, noting that they do not fall within the remit of our offices. It is a matter for the Senate whether to take any action in relation to these requests.

Finally, I have received correspondence from lawyers acting on behalf of Rodney Norman Culleton, requesting the Senate to refer matters relating to Mr Culleton back to the High Court for reconsideration. I am advised that the Senate has no power to comply with this request. I table the correspondence together with that advice.

Senator BRANDIS (Queensland—Attorney-General, Vice-President of the Executive Council and Leader of the Government in the Senate) (12:33): by leave—I move:

Pursuant to section 376 of the Commonwealth Electoral Act 1918, the Senate refers to the Court of Disputed Returns the following questions:

   (a)   whether by reason of section 44(i) of the Constitution, there is a vacancy in the representation of Queensland in the Senate for the place for which Senator Matthew Canavan was returned;

   (b)   if the answer to question (a) is "yes", by what means and in what manner that vacancy should be filled;

   (c)   what directions and other orders, if any, should the Court make in order to hear and finally dispose of this reference;

   (d)   what, if any, orders should be made as to the costs of these proceedings.

On the afternoon of Monday, 24 July, Senator Canavan approached me in my office in Brisbane to advise that he had been informed by the Italian embassy that he was an Italian citizen. Senator Canavan also informed the Prime Minister and the Deputy Prime Minister. In 2006, Senator Canavan was apparently registered with the Italian consulate in Brisbane on a register known as the AIRE, or Registry of Italian Nationals Resident Abroad. It seems this occurred as part of an application for registration made by Senator Canavan's mother. Senator Canavan did not authorise this registration to be undertaken on his behalf.

As I said in my press conference on 25 July, the government took advice from the Solicitor-General. Though this will of course be a matter for the court, it is the government's preliminary view that, given the circumstances in which Senator Canavan may have obtained Italian citizenship, he is not in breach of section 44 of the Constitution. However, as I also said on 25 July, the government believes it is appropriate to refer the matter to the Court of Disputed Returns to resolve any uncertainty. The government will seek a directions hearing at the earliest opportunity and will work to have the reference heard by the court on an expedited basis. The government has acted swiftly to address this matter. I announced our intention to refer to the matter to the High Court, sitting as the Court of Disputed Returns, on the day after senior ministers became aware of the matter and as soon as we'd received Solicitor-General advice.

There is an overriding public interest in resolving the uncertainty around Senator Canavan's status, and it is important to remember that, at present, the situation is just that—it is uncertain. One of the questions is whether Senator Canavan is indeed an Italian citizen. That is primarily a question of Italian law. There will no doubt need to be evidence from experts in Italian law, and I won't speculate on what that evidence may tell us. More importantly for honourable senators, and indeed for all members of this parliament, there are questions of law as to the proper interpretation of section 44(i) of the Constitution, which provides:

Any person who:

(i) is under any acknowledgment of allegiance, obedience, or adherence to a foreign power, or is a subject or a citizen or entitled to the rights or privileges of a subject or a citizen of a foreign power …

…   …   …

shall be incapable of being chosen or of sitting as a senator or a member of the House of Representatives.

The legal characterisation of section 44(i) has long been the subject of legal argument, although primarily among constitutional law scholars, relatively seldom in the High Court itself. Senators may be interested to note that, in the 1897 draft of the Constitution, the equivalent clause referred to:

Any person-

(1) Who has taken an oath or made a declaration or acknowledgment of allegiance … to a Foreign Power, or has done any act whereby he has become a subject or citizen …

In other words, the framers appear, at least initially, to have been concerned only with those who, unlike Senator Canavan, had taken active steps to swear or declare allegiance to a foreign country. Ninety years after that 1897 draft, in Nile v Wood, three members of the High Court—Justices Brennan, Deane, and Toohey—opined:

… it would seem that s.44(i) relates only to a person who has formally or informally acknowledged allegiance, obedience or adherence to a foreign power and who has not withdrawn or revoked that acknowledgment …

In 1981 the Senate Standing Committee on Constitutional and Legal Affairs reported that the aim of the provision:

… was to ensure that members of Parliament did not have a split allegiance and were not, as far as possible, subject to any improper influence from foreign governments.

In Sykes v Cleary, now the leading case, which arose from the by-election to replace the former Prime Minister, Mr Hawke, as the member for Wills, Justice Brennan opined that:

Section 44(i) is concerned to ensure that foreign powers command no allegiance from or obedience by candidates, senators and members of the House of Representatives; it is not concerned with the operation of foreign law that is incapable in fact of creating any sense of duty, or of enforcing any duty, of allegiance or obedience to a foreign power.

Justice Deane, in Sykes v Cleary, considered that section 44(i) should apply:

… only to cases where the relevant status, rights or privileges have been sought, accepted, asserted or acquiesced in by the person concerned.

According to Justice Deane, 'an Australian-born citizen is not disqualified by reason of the second limb of s.44(i) unless he or she has established, asserted, accepted, or acquiesced in, the relevant relationship with the foreign power.' To similar effect, Justice Dawson considered that what can reasonably be required by section 44 will depend, in part, on, 'The person's knowledge of his foreign nationality,' and:

… the circumstances in which the foreign nationality was accorded to that person: …

One wonders what members of the court might have made of an individual named John Christian Tanck. Born in 1867 in Chile to a Chilean father and an Irish mother, Mr Tanck moved to New Zealand as a toddler. He later emigrated to Sydney and was elected to the New South Wales parliament. In 1894, he was then elected as a member of the House of Representatives to the first Commonwealth parliament. In 1904, as the first federal parliamentary leader of the Australian Labor Party, he became our third Prime Minister. By that time, he was known as John Christian Watson.

So, the history of section 44 is a long one. It is to be hoped that the referral of Senator Canavan's circumstances to the Court of Disputed Returns serves the indisputable public interest in bringing some much needed clarity to this provision of the Constitution. I commend the motion to the Senate.

Senator WONG (South Australia—Leader of the Opposition in the Senate) (12:42): I rise to speak on the motion moved by the Leader of the Government in the Senate and also to make some comments, if I may, about motions which I understand Senator Di Natale intends to move in relation to two other former senators. These motions raise very important issues for the Senate to resolve. In November last year, the Senate considered similar motions relating to the eligibility of former Senators Day and Culleton. On each of these motions, the Senate came to the view without the need for a division. The matters should be referred to the High Court of Australia sitting as the Court of Disputed Returns for resolution.

It's important to note that that decision of the Senate did not presuppose an outcome. Rather, it was a reflection that serious doubts about the eligibility of the senators in question had been raised and that, given the complexity of these issues, it is desirable to send the matters to the High Court so that it may, as the Court of Disputed Returns under the Commonwealth Electoral Act, resolve the matters beyond any doubt. Taking this step—referring the matters to the only authority that can resolve them, which is the High Court of Australia—serves to protect the interests of the parliament and the integrity of our electoral system.

It is disappointing that we are faced today with the same task. However, the opposition believes the government is taking the correct approach. Credible doubts have been raised about the eligibility of Senator Canavan, and these doubts need to be resolved one way or the other. That is why the act makes provision for this process and that is why we believe that the government has done the right thing in moving the motion it has, and the opposition will be supporting it.

Senator Di Natale has also indicated publicly that he intends to move similar motions relating to former Senators Ludlam and Waters. I want to take this opportunity to foreshadow that, subject to any additional evidence that may be tabled or arise in this debate, the opposition also intends to support these motions. Again, this is not to presuppose the outcome. Evidence may be put before the court that leads to a determination that one or all of these senators are eligible to sit. But, in each case, doubts are clear and on the public record, and the only way to resolve these matters is for the High Court to determine them.

I also wish to set out the approach the Labor Party is taking to these matters more generally. It is a very serious matter to question the eligibility of a senator to sit in this place. It is not a decision that should be taken lightly and it can't be taken without consideration of evidence on the public record. I know some in this place have called for the appointment of some body or eminent person to 'audit' the eligibility of all senators. This isn't an approach that the Labor Party supports.

I would like to look at a little bit of history. The Senate considered a similar proposal to this in 1999, from Senator Len Harris, a One Nation senator. The debate on that motion is instructive. In particular, I draw the Senate's attention to the contribution from Senator Bob Brown, on behalf of the Australian Greens:

One of the problems is the reversal of the onus of proof. I am concerned it could be followed up by a wide variety of motions which require members of parliament to attest to their propriety without there having been any evidence that they had acted with impropriety. Surely that is not the way for us to proceed in a parliament which, as has been said by previous speakers, members have been required to sign something to say that they have abided by constitutional requirements. In effect, through taking the oath or affirmation when entering this place, they have repeated that assurance that they have been properly elected. This point was reiterated, on behalf of the Labor Party, by Senator Robert Ray:

… it is not unheard of for this chamber to refer a matter of qualification to the Court of Disputed Returns but it always does that on the basis of some evidence—and we do not want to reverse the onus of proof.

Senators from the Liberal Party took a similar approach in the same debate.

So, the approach the Labor Party will take today is a consistent approach that we have taken on similar matters for several years, and actually reflects the position adopted by those opposite and the past position of the Australian Greens. We do not support reversing the onus of proof and requiring all senators to prove their eligibility where no question has arisen. However, where the public record reveals serious credible doubts, the only appropriate resolution is through a referral to the one body that can make an authoritative determination, and that is the High Court of Australia.

Those who propose an administrative audit need to appreciate that nobody other than the High Court can authoritatively resolve questions of eligibility. So their proposed solution is no solution, and any audit can only ever assess eligibility at a point in time. If we reflect on the case of Mr Day, an audit conducted when he was first elected to this place would have revealed no impediment. He only became ineligible subsequently, when he entered into a financial arrangement with the Commonwealth in breach of section 44 placitum (v). The current circumstances are also a reminder of the importance of all candidates and all parties in running a thorough vetting process. As Senator Faulkner said during that 1999 debate, with his characteristic clarity, 'If you fail to do your homework, as is the case with Ms Hill, you make a mistake, a big one, and you get caught out—tough, that's the way it works.'

Mr President, questions relating to the composition of this chamber go to the heart of representation in our democracy. It is unfortunate that, for the second time in 12 months, we find ourselves in the position of having to seek the guidance of the High Court to clarify who is properly chosen to sit in this chamber. In the 1999 debate to which I referred, Senator Robert Ray made the following observation about the processes that parties need to go through to assess the eligibility of potential candidates:

It is tedious and it is time consuming, but it is done so that we do not face these particular situations.

Recent events are a timely reminder of the importance of parties and candidates ensuring their processes are robust. The opposition supports the referral of this matter, and looks to the High Court for its decision.

Senator DI NATALE (Victoria—Leader of the Australian Greens) (12:48): I do not intend to speak to Senator Canavan's case. As Senator Wong has pointed out, this is a case that needs to be adjudicated within the court, so I do not intend to make any further comment regarding Senator Canavan's case. I will shortly seek leave to move a motion relating to Senators Ludlam and Waters. However, I do feel it's important to put on the record our view, the Australian Greens view, about what should transpire from this point onwards.

Senator Wong is absolutely correct when she says that it is very serious to question the eligibility of any senator in this place. That is a very serious question to ask, and one that needs to be considered very, very carefully. What is more serious, though, is that there may indeed be senators, and members of the lower house, who are sitting as members of the parliament when they are ineligible to do so. That is of course a much more serious concern, because—Senator Wong is absolutely right—it goes to the very heart of a democracy in terms of who is eligible to stand and represent the Australian people.

What has transpired over recent months has involved a number of senators—in fact, two Greens senators, and we now have further action in the High Court relating to Senator Canavan, with questions being asked of other members of the parliament. While Senator Wong discusses section 44 quite broadly, it is our view that an audit is necessary to assess the citizenship status of all members of the parliament. That is the only way in which we can give confidence to the Australian people that members of parliament sitting here representing the Australian community are eligible to do so. And it does go to the heart of any democracy: the circumstances in which our Constitution determines that people are duly elected.

Ultimately, for people to have faith in the system, we rely on people within the system to act with integrity. I'm very proud of the actions of both senators Ludlam and Waters in accepting they made an error, and paying a very high price for that error by doing the decent and honourable thing and announcing their resignations. However, we need to be absolutely confident that everyone within our parliament is going to do the same thing. Sadly, I don't have that confidence. I don't think the Australian people have that confidence. If anything, what we have seen is a double standard being applied in terms of the actions taken by senators in this place.

So we do believe very strongly that there needs to be a thorough and independent audit of not other issues relating to section 44 of the Constitution but the citizenship status of individuals within the Australian parliament. We think it's important to restore faith in our democracy, and we will be moving tomorrow to establish such an audit. It will be up to other members of parliament to decide what they do with regard to such an audit—whether they think that restoring trust within our Australian democracy is a necessary task or whether they would like to rely on the fact that individuals within the system will simply act in the interests of the Australian people, rather than in their own narrow self-interest. Sadly, we don't have confidence that every member of this place will do that, and it is for those reasons that we will be moving for such a wide-ranging audit.

In the meantime, let me put on the record my pride in the actions of senators Ludlam and Waters, who both paid a very high price for a mistake that they made—but they did act, with the integrity that I am so proud that our party represents.

Senator CANAVAN (Queensland) (12:54): I wish to indicate that I support the motion and the referral of this matter to the Court of Disputed Returns. Until three weeks ago, I had no knowledge or reason to believe that I might be registered as an Italian citizen. I was not born in Italy, and neither were my parents. I do not believe that I have contravened section 44 of the Constitution, and my own legal advice indicates that I have a good case in this matter. Nonetheless, I do think it proper that the matter be referred to and determined now by the High Court. I wish to fully respect this process, and that is why I have resigned from the ministry and I will also not vote in the Senate until this matter is resolved.

The PRESIDENT: The question is that the motion moved by the Attorney-General be agreed to.

Question agreed to.

Senator DI NATALE (Victoria—Leader of the Australian Greens) (12:54): by leave—I move:

The following matters be referred to the Court of Disputed Returns under section 376 of the Commonwealth Electoral Act 1918:

(a) whether by reason of s 44(i), of the Constitution there is a vacancy in the representation of Queensland in the Senate for the place for which Senator Waters was returned;

(b) if the answer to Question (a) is ‘yes’, by what means and in what manner that vacancy should be filled;

(c) if the answer to Question (a) is ‘no’, is there a casual vacancy in the representation of Queensland in the Senate within the meaning of s 15 of the Constitution; and

(d) what directions and other orders, if any, should the Court make in order to hear and finally dispose of this reference.

and

The following matters be referred to the Court of Disputed Returns under section 376 of the Commonwealth Electoral Act 1918:

(a) whether by reason of s 44(i) of the Constitution there is a vacancy in the representation of Western Australia in the Senate for the place for which Senator Ludlam was returned;

(b) if the answer to Question (a) is ‘yes’, by what means and in what manner that vacancy should be filled;

(c) if the answer to Question (a) is ‘no’, is there a casual vacancy in the representation of Western Australia in the Senate within the meaning of s 15 of the Constitution; and

(d) what directions and other orders, if any, should the Court make in order to hear and finally dispose of this reference.

Senator BRANDIS (Queensland—Attorney-General, Vice-President of the Executive Council and Leader of the Government in the Senate) (12:55): I indicate on behalf of the government that we support the motion moved by Senator Di Natale. We believe that Senator Di Natale, on behalf of the Greens, has taken the appropriate course of action in all the circumstances. I don't think, in view of what has been acknowledged by Scott Ludlam and Larissa Waters, that there is any area of factual controversy here, and I ask the Senate to join the government in supporting Senator Di Natale's motion.

Senator DI NATALE (Victoria—Leader of the Australian Greens) (12:56): Mr President, a point of clarification: I have put the motion for Senator Ludlam and Senator Waters together. I am moving both of those together. I am confirming that that's been done?

The PRESIDENT: That's correct. The question now is that the motion moved by Senator Di Natale be agreed to.

Question agreed to.

Senator CAMERON (New South Wales) (13:23): I rise to oppose the Fair Work Amendment (Corrupting Benefits) Bill 2017 as it is presented to the chamber. I want to make it clear that Labor has no tolerance for corruption in any form. Notwithstanding this, there are significant problems with the bill as it is presented to the chamber. Labor has unsuccessfully attempted to negotiate amendments with the minister. The minister's intransigence and refusal to take heed of the concerns of the Labor Party, the union movement, employers, the Law Council and academics reinforces the view that this government and its minister are driven by ideology as distinct from fair and effective legislation. These concerns are also held by the Scrutiny of Bills Committee and the Joint Committee on Human Rights. This demonstrates that, rather than making a genuine attempt to deal with corrupting benefits, the minister and the government are attempting to continue their attacks on the trade union movement. The bill also differs from the model legislation proposed by the Heydon royal commission.

The coalition has attempted to discredit and weaken the trade union movement, and I think everyone is well aware of that position. The coalition has a long history of attempting to diminish collective bargaining, union rights and right-of-entry provisions. It introduced Work Choices, the legislative framework designed to promote individual agreements, destroy penalty rates and diminish collective bargaining. The coalition introduced the Australian Building and Construction Commission, with its punitive legislative base, and the Building Code, which disadvantages builders' and other workers' attempts to collectively bargain in an effective and fair manner. The coalition has established two politically driven building royal commissions with the purpose of demonising building unions, restricting workers' access to their union and restricting collective bargaining rights. The coalition has been aggressively targeting the trade union movement in order to justify breaches of ILO conventions and the removal or weakening of trade union rights in this country.

The bill continues the Tory tradition of increasing the bargaining rights of employers and decreasing the collective bargaining rights of Australian workers. The political campaign by coalition members to reduce penalty rates has resulted in hundreds of thousands of lower-paid workers facing increased hardship and, in some cases, destitution. The so-called PaTH program will see tens of thousands of properly paid jobs being replaced with so-called internships. Workers, under the guise of an internship, will be paid $4 an hour. Is it any wonder that casualisation and insecure work is becoming more prevalent while living standards and inequality increase? This is an ideologically obsessed government with a minister who will never understand the needs and hardships of working Australians.

This bill continues the political attack on the trade union movement and is being perpetrated under the guise of so-called corrupting benefits. The bill creates a new criminal offence related to the solicitation, giving or receipt of corrupting benefits. It creates new criminal offences related to a national system employer offering, promising or providing certain prohibited payments and other persons soliciting, receiving or gaining by agreeing to obtain such payments. And it requires bargaining representatives to disclose financial benefits that they, or a person or body reasonably connected with them, would or could reasonably be expected to derive because of the term of the proposed agreement.

The bill is divided into two schedules. Schedule 1 deals with the proposed criminal offences relating to corrupting benefits and prohibited payments. Schedule 2 deals with amendments related to disclosure by registered organisations and employers.

A range of extremely serious concerns were raised by the Senate Standing Committee for the Scrutiny of Bills and the Parliamentary Joint Committee on Human Rights. The concerns raised by the scrutiny of bills committee and the Joint Committee on Human Rights are consistent with the concerns raised by the Law Council of Australia, academics, employers and unions. The Parliamentary Joint Committee on Human Rights has reported twice on the bill, first on 9 May 2017 and then again on 20 June 2017. The committee initially raised concerns with the bill's potential infringement on the right to a fair trial in relation to double jeopardy and the right to be presumed innocent. The committee sought the minister's response in relation to these matters. After considering the minister's response, it concluded that it was not possible to find that the measures in the bill were compatible with the above rights.

The Senate Standing Committee for the Scrutiny of Bills has a responsibility to assess bills in relation to undue trespass on personal rights and liberties, whether administrative power is described with sufficient precision, whether appropriate review of decisions is available, whether any delegation of legislative powers is appropriate and whether the exercise of legislative powers is subject to sufficient parliamentary scrutiny.

The committee dealt with this bill in Scrutiny Digest No. 4 of 2017. The minister responded to the committee's comments in a letter dated 21 April 2017. The first issue the committee raised was the right not to be tried or punished twice, which is normally known as double jeopardy. The committee determined:

In light of the information provided, the committee makes no further comment on this matter.

But it needs to be noted that the Joint Committee on Human Rights concluded it was not possible to find the measures in the bill were compatible with the right not to be tried or punished twice.

The next area that was raised was the reversal of evidential burden of proof. Following the minister's response, the Scrutiny of Bills Committee concluded:

From a scrutiny perspective, the committee considers that the offence as currently drafted is overly broad, relying heavily on defences to carve out legitimate transactions, and so may unduly trespass on personal rights and liberties …

The committee requested that the key information provided by the minister be included in the explanatory memorandum. The committee also drew its scrutiny concerns to the attention of senators and left to the Senate as a whole the appropriateness of the breadth of the offence and the subsequent reversal of the evidential burden of proof for the offence-specific defences. The next area that was raised was strict liability offences:

The committee requests the Minister's advice as to how each element of the offences in proposed sections 536F and 536G to which strict liability applies are jurisdictional in nature, with reference to the principles set out in the Guide toFraming Commonwealth Offences.

…   …   …

The committee notes that a person found guilty of an offence under these provisions may be subject to a maximum period of two years imprisonment and/or 500 penalty units.

The committee noted that its 'consistent scrutiny view is that strict liability offences should be applied only where the penalty does not include imprisonment' and that monetary penalties do not exceed penalty units. And I reiterate what the minister is proposing, in opposition to the Scrutiny of Bills Committee recommendation, is that there be two years imprisonment and 500 penalty units. The committee noted 'that no evidence is provided for the conclusion' by the minister 'that a fault element would weaken the deterrent effect of the provision given the significant penalties to be imposed. The committee went on to say:

In this instance, from a scrutiny perspective, the committee does not consider it is appropriate to penalise persons lacking fault and suggests that the application of strict liability be restricted to elements which are jurisdictional in nature …

The committee drew its scrutiny concerns to the attention of senators and left it to the Senate as a whole to determine the appropriateness of the application of strict liability.

The next issue that the Scrutiny of Bills Committee looked at was significant matters in delegated legislation. The committee noted that:

A number of provisions of the bill leave significant detail to be prescribed in the regulations …

The explanatory memorandum provides limited detail as to why significant matters that set out aspects of the content of offences or civil penalty provisions are left to delegated legislation.

…   …   …

The committee came to the view that:

… significant matters, such as matters that form part of an offence or civil penalty provision, should be included in primary legislation unless a sound justification for the use of delegated legislation is provided.

The committee indicated:

It is particularly important, from a scrutiny perspective, for the content of an offence to be clear from the offence provision itself, so that the scope and effect of the offence is clear so those who are subject to the offence may readily ascertain their obligations.

The committee requested advice from the minister as to why it is considered necessary and appropriate to leave many of the elements of these offence or civil penalty provisions to delegated legislation. It also requested advice as to the type of consultation it is envisaged will be conducted prior to the making of these regulations and whether specific consultation obligations can be included in the legislation, with compliance with such obligations a condition of the validity of the legislative instrument. The minister advised that the potential for new arrangements to arise that are not currently contemplated by the bill made it both necessary and appropriate to include regulation-making powers to allow the government to deal with the circumstances. The minister also advised that the government does not consider that it is necessary or desirable to include additional consultation requirements in the bill and noted that any regulations made will be subject to tabling and disallowance requirements and to scrutiny by the Senate Standing Committee on Regulations and Ordinances.

After noting the government's response, the committee reiterated its general view that it is important for the content of an offence to be clear from the offence itself so that the scope and effect of the offence is clear and so that those who are subject to the offence may readily ascertain their obligations. From a scrutiny perspective, the committee did not consider in these circumstances that it is appropriate to include elements of offence or civil penalty provisions in delegated legislation. The committee also considered the possibility of unforeseen arrangements for the making of legitimate payments arising because of the breadth of the offence provision and reiterated its scrutiny concerns about the broad scope of the offence. The committee also reiterated its general view that, whereas the parliament delegates its legislative power in relation to significant matters, it is appropriate that specific consultation obligations beyond those in section 17 of the Legislation Act 2003 are included in the bill and that compliance with these obligations is a condition of the validity of the legislative instrument. The committee noted that, although the instrument may be disallowable, it may be difficult for parliamentarians to know whether appropriate consultation has taken place within the time frame for disallowance. The committee drew its scrutiny concerns to the attention of senators and again left to the Senate as a whole the appropriateness of leaving such significant matters to delegated legislation. The committee also drew this matter to the attention of the Senate Standing Committee on Regulations and Ordinances.

As senators would know, both the Parliamentary Joint Committee on Human Rights and the Senate Standing Committee for the Scrutiny of Bills are advised by eminent legal advisers. The forcefulness of the concerns of both these committees needs to be understood by the Senate and acted upon appropriately. The Law Council of Australia, in its submission to the Senate Education and Employment Legislation Committee, raised concerns in relation to schedule 1, amendments relating to corrupting benefits. The Law Council indicated that, as a general proposition, whenever the legislature creates new offences, it should take care and use precise terms to ensure that it does not criminalise conduct that was not intended to be caught by the proposed provisions. The Law Council indicated there was little guidance on the related term 'legitimately due' in section 536D(5) and section 536D(6). The Law Council indicated that some clarity is provided in section 536D(4); however, section 536D(3), according to the council, significantly complicates the interpretation of these terms by providing that the defendant's intention does not need to be 'in relation to a particular registered organisation's officer or employee', or in relation to an official 'performing or exercising duties, functions or powers in a particular way'. The Law Council indicated that it is difficult to see how the test of requisite intention is to be ascertained, given the apparent indication that the defendant's intention might be as little as a hope that giving something to an official might influence them to perhaps formulate some unspecified idea to do something unstated. We would start to get the idea that this is a poorly drafted bill. It is not precise. It has come under criticism from the Law Council, the Ai Group, the ACTU and, as I have said, the Law Council.

The Labor Party sent some amendments to the Law Council to ask them to have a look at those amendments in relation to the issues that they had raised and ask them whether our amendments would deal with the concerns that they had. They wrote back to the shadow minister, Brendan O'Connor, on 6 June and said:

I write in response to your letter of 30 May 2017 to Mr Ingmar Taylor SC, Chair of the Law Council's Industrial Law Committee, concerning the Fair Work (Corrupting Benefits) Bill 2017. Your letter summarised certain amendments to the Fair Work (Corrupting Benefits) Bill 2017 which the opposition intends to propose.

You asked the Law Council whether the proposed amendments reflect and are consistent with the submission made by the Law Council of Australia in its written submission to the Senate inquiry.

The Law Council in its submission to the Senate Committee stated that it supported the objective of the Bill, but identified some concerns as to the draft text of the Bill, suggesting amendments be made to ensure that it did not criminalise conduct that was not intended to be caught by the proposed provisions.

The proposed amendments that you summarised in your letter have been considered by the Industrial Law Committee of the Law Council. The Committee advises that the draft amendments summarised in your letter on page one at items 1 to 4 inclusive are consistent with the Law Council's submission to the Senate Committee on the Bill.

Please do not hesitate to contact me if we can be of further assistance.

Yours sincerely

Fiona McLeod SC

President

So not only have the Scrutiny of Bills Committee and the Joint Committee on Human Rights—and these are bipartisan committees; they include senators from the coalition and members from the coalition—raised concerns with the drafting of this bill and the implications of this bill but the Law Council have also raised concerns, the Australian Industry Group have raised concerns and the ACTU have indicated they don't know of any laws in this country where provisions like these are implemented. This is another example of the attacks on the trade union movement to force increasing inequality in this country. This is an attack on workers' capability to collectively bargain and operate independently of the government. The amendments should be adopted. (Time expired)

Senator IAN MACDONALD (Queensland) (13:43): For those listening to this debate, you may not have understood from my friend and colleague, the previous speaker, what this bill, the Fair Work Amendment (Corrupting Benefits) Bill 2017, is about. I just mention initially that this bill is about banning secret and corrupting payments from businesses to unions. The bill also requires that, for legitimate payments arising from enterprise agreements, there be a full disclosure. That's what this bill is about.

The previous speaker indicated that the bill was about demonising unions. I say to Senator Cameron: they don't need this bill or me or anyone on this side of the chamber to demonise unions; they are doing it themselves. I will shortly give you just some of the corrupting payments which do demonise unions, not by anything the government or I or the minister have done but by what the union officials themselves have done. This is what is demonising unions. You only have to look at the paper any day of the week and you will see some report of yet another union being fined because they believe they are above the law. The law is for everybody else except the unions. Fortunately, the courts are taking the appropriate action and fining them. This is probably why membership of unions is at a record low of 10 per cent of the workforce in the private sector. Ten per cent of workers in the private sector choose to join a union. I suspect that workers are leaving the unions in droves because of this inappropriate and corrupt behaviour that the Fair Work Amendment (Corrupting Benefits) Bill 2017 seeks to address.

I know every member of the opposition in this place is here only because of the unions. The unions control the preselection process. They then tell senators, once they are elected here, what they should do. I reiterate, that might be sort of acceptable if the unions represented all workers, but the unions represent less than 10 per cent of workers in the private sector. So it's that very small coterie of workers and union bosses who direct the Labor Party and write their speeches for them in these sorts of debates.

The union movement should be above reproach and above suspicion. Where the unions do perform a worthwhile purpose, they should be allowed to do it without having attributed to them the sort of corrupt conduct that this bill is trying to address. This matter went before the Heydon royal commission, which uncovered a raft of payments between unions and employers that were designed to ensure that companies got favourable treatment from the unions. He called these payments 'corrupting benefits'; hence the name of this bill. The benefits were often disguised by false invoices marked as payments for 'training' or similar, and made as part of a deal in enterprise agreement negotiations or accompanied by lists of employees' names that were used secretly to join employees to a union without their knowledge. Some officials have been paid private kickbacks—and this is all documented in court records—that they used for their own personal expenses. We know the example of Mr Craig Thomson, formerly, I am ashamed to say, a member of this parliament and for many years protected by members of the Australian Labor Party, including one senator, who was at the time the guy who was protecting him and paying his legal bills, or was arranging for someone to pay his legal bills. Whether that arrangement came from within Australia or outside, we will never know.

In return for this corrupt behaviour, employers expected to gain more flexible and cheaper employee pay conditions, and win work and avoid strikes and other industrial powers. It's not only directed at the unions; this is also directed at those businesses that participate in the corrupt actions. Mr Acting Deputy President O'Sullivan, I have a list of some examples, which will take me to the end of my speech to go through. These are facts; these are not Ian Macdonald making things up—facts found by the courts to be corrupting actions. I said these are not made up by Ian Macdonald. I talk about me, Ian Macdonald, an LNP senator from Queensland. I don't want that to be confused with another politician, a Labor politician, named Ian Macdonald, who is currently, I understand, serving jail—for what? For allegedly—well, he's serving time, so it must have been proven—for giving a licence to a union official for a very, very valuable coalmine. As I understand it, both the union official and my namesake, the Labor politician from New South Wales, are serving time at Her Majesty's pleasure.

Mr Acting Deputy President, I will mention just a few of the other instances that this bill is trying to address. There was a secret payment—this was revealed by the royal commission—of $100,000 from Toll to TEACHO, a TWU entity, to secure an enterprise agreement with a promise to pay a further $50,000 for information about Toll's competitors. This is not only about cleaning up union corruption; it's also about cleaning up some business activities that are less than fair. There was a payment of over $350,000 from SapuraKencana to the Maritime Union of Australia at the time it was planning to use foreign-crewed boats. Why would they do that? There is nearly $1 million from Dredging International to the MUA apparently to secure an enterprise agreement. There is a $2,500 payment from an underworld figure, Mr George Alex, to officials of the CFMEU in New South Wales to ensure favourable treatment of Mr Alex's companies, even though they were repeatedly phoenixed—I see Senator Dastyari here so he'll no doubt tell us more about phoenix companies—leaving workers without jobs and with unpaid wages and entitlements. There was the $150,000 in-kind home renovations made by Mirvac to former CFMEU Queensland president Dave Hanna to secure industrial peace and favourable treatment. The payments were disguised by inflated invoices from subcontractors on their existing Orion shopping centre project.

I repeat: this is not me making up some facts or the minister making up tales. This is evidence to the royal commission—it is factual. There was over $118,000 from the owner of several construction companies to the CFMEU New South Wales to avoid entering its enterprise agreement. These payments were disguised as donations for various charitable causes, including safety industry dinners at a Friends of the Sinn Fein speaking tour. This sort of thing has to stop; this bill is meant to stop these corrupt practices. Where there are payments made that might be legitimate, they should be clearly explained so there is full accountability.

Unfortunately, I'm not going to have time to go through this very long list, but it's a list that should be understood, because this sort of activity is corrupt and it needs to be addressed. I congratulate the minister for having the courage to bring this bill forward. I know she's consulted widely, including with the opposition, on the terms of the bill. I certainly urge its support so that this matter can be addressed by the parliament and by the law.

Senator RHIANNON (New South Wales) (13:54): This bill is based on a lie. It's a scam from a government that couldn't lie straight in bed. The Turnbull government peddles the lie that corruption only happens in the industrial setting. Obviously, that raises many questions. Why would they go with such a scam? Why? Because they have certain interests to uphold—the interests of their constituency, and their constituency is corporate Australia. What does corporate Australia want? What do they have to do, according to the law? Work out how to increase their profits. What is one of the easiest ways to increase your profits? Go after unions—and that is what this bill effectively does.

Again, if you were serious about fighting corruption then you would go for it across the board. You would come in here with a bill that would deal with corruption wherever it rears its ugly head, whether it be in the industrial sphere—as this government has suddenly discovered—in the corporate board rooms, in the public sector, or in this parliament. Do we really think that there is no corruption at the federal level? We have heard that time and time again from the government. The government is showing us how biased it is. It is not taking on corruption wherever it appears, which is clearly the responsibility of any federal government, but is using corruption as a cover to continue its agenda to weaken the union movement. It is doing this even to the point where it will make it difficult for employers. You will find, when you dig into this bill, that, because of how broadly this bill has been drafted, it will become very difficult for employers and employees to engage in what are often normal practices.

What the government should do—because it really is so blind to where corruption appears—is apply the famous pub test it often trots out when it is hard-up for an argument. It should go and ask the regular punters what they think about corruption and where they think corruption is. I think even it would know, in its heart, that the answer it will get back is: politicians, corporate board rooms and, maybe, the public sector. That is what the regular punter would say if you went and asked: what do you think about corruption? But, looking at this bill, the government must be thinking, 'We can probably get away with it; we'll just go hard on the union movement again.'

What we've got here is a pathetic bill that would have been an embarrassment to draft. If passed, this is what would happen: it will only be the industrial sphere that will be targeted. Corrupt activities elsewhere have been ignored. The message coming from the government to areas other than the industrial sphere is: 'No worries. You can get away with it. There is no corruption in the federal parliament, or the corporate board rooms, or government agencies. No legislation is needed. You'll be right; you'll be able to get away with it.' That is effectively the message that's coming from this government when it brings in a bill like this. It is a bill that should be withdrawn.

Senator McKenzie: Oh, come on!

Senator RHIANNON: I'm happy to take that interjection. Again, it was a National Party MP defending a pretty dodgy bill. The bill was brought forward by the Liberal Party, but the Liberals and Nationals are in cahoots together—and they're not helping the country out at all.

What the government should do is come in here and, with some courage, admit that it's been outed and that it's been wrong, show it's committed to fighting corruption and bring in a national corruption watchdog. Every state has one, and they do a good job. There are MPs—and a lot of Liberal MPs, by the way—falling over like ninepins in state parliaments, particularly New South Wales and Victoria, because there are corruption watchdogs that can look at and check these things. But what do we get at a federal level? We get: 'Oh, no, we don't have a problem.' We've heard MPs in this parliament say that we don't need a federal corruption watchdog because we don't have corruption at this level. That's not what should be happening now. That's the bill we should be debating, if this government was sincere, rather than covering the backs of the government's mates and not doing the real job that needs to be done.

What you also see with this bill is that the government doesn't care about fighting corruption, because it is only targeting people with a blue collar. Let's be frank: that's what's going on here. If you're a traditional blue-collar worker, look out! The government's after you, in one way or another. It's after you; it's after your union. But, when it comes to fighting corruption across the board, if you're a white-collar worker, hanging out in corporate boardrooms, everything's okay. If you're in the upper echelons of society, nobody's going to go after you while this government is in power. How long will it keep turning its back on what is so clearly needed?

What is clearly needed is a national anti-corruption watchdog. It should have been introduced long before now. We've had them for such a long time, and done some important work in our state governments, exposing the depth of the problem. It's also worth putting on the record that the Liberal-Nationals around the country are getting a real name for themselves of working together to water down anticorruption measures. In New South Wales, where 10 or 11 Liberal MPs have fallen over because they were caught out by the investigations of the anticorruption watchdog, what does the Liberal government do? The Liberal-National government in NSW turns up and weakens the law.

The PRESIDENT: Order! It being 2 pm, we move to questions without notice.

Senator SINGH (Tasmania) (16:47): I move:

That the Senate take note of the report.

I rise to take note of the Joint Committee on Law Enforcement's report into human trafficking, slavery and slavery-like practices, which was presented out of sitting, on 18 July. As the deputy chair, I'd like to speak to the recommendations of the Joint Committee on Law Enforcement. The committee's inquiry into human trafficking actually commenced in the last parliament. However, then parliament was prorogued, and we know the status of committee inquiries at that time. The committee was reinstated in this parliament and has continued with its deliberations and its work, which has culminated in the report before the Senate. The terms of reference and, indeed, a number of the submissions that were received for this report were the same as for the original inquiry in the last parliament, but a number of submitters chose to add to their original submissions, and extra submissions were received. There is a lot of interest in the issues of human trafficking, slavery and slavery-like practices in Australia. They have gained a lot of momentum, not just here in Australia but, indeed, around the world. That culminated with the UK recently, in 2015, moving legislation known as the Modern Slavery Act, which came into force in 2015 to deal with the supply chain issues of big businesses when it comes to slavery. What that found in relation to the UK was that a number of businesses are unaware of the fact that they do indeed have slavery or slavery-like practices in their supply chain.

In relation to this report, because it came out of the parliamentary Joint Committee on Law Enforcement, its focus was on law enforcement. That led to it having a number of recommendations which address those issues of law enforcement. But, at the outset, the terms of reference for this inquiry didn't just focus on slavery in supply chains. It did look at issues of forced labour, debt bondage and the like, but it also looked at a number of other issues, such as the prevalence of human trafficking in Australia, including those in culturally and linguistically diverse communities. It also looked, very much so, at the effectiveness, or lack thereof, of Commonwealth law enforcement agencies in responding to human trafficking. Out of the committee's deliberations and the evidence that it received, it was found that there were a number of inefficiencies in the way the Commonwealth government deals with human trafficking and slavery in Australia. It also focused on organised crime, transnational organised crime into human trafficking, the extent to which human trafficking is facilitated by migration visas, including marriage, partner, student and work visas, technology and false identities, and a number of related issues.

There are a number of recommendations that I could refer to, but I did want to highlight one issue which goes beyond the issue of slavery, in the sense of a modern slavery act, and that is the issue of forced marriage. Firstly, to be honest, it is amazing that we are here, in 2017, talking about slavery, slavery-like practices and forced marriage. But, nevertheless, here we are. Forced marriage for women and girls is still occurring here in Australia. A number of the victims are too scared to come forward, and their access to the support they need to make their situation known to law enforcement services is not always very straightforward or helpful. Alarmingly, there seems to be a number of women and girls still in forced marriage situations in Australia. Between 2013 and 2015, of the 49 reported referrals that the Australian Federal Police looked into, 32 of them were for girls under the age of 18. Since that time, the number of referrals of forced marriages to the AFP has only increased.

Out of all of the referrals and investigations the AFP carried out into human trafficking and slavery, 50 per cent of them are in the area of forced marriage. The committee did focus, therefore, on recommendations in relation to not only forced marriage but also the role of the AFP in identifying these situations. It recommended that the Commonwealth government increase the number of AFP officers with specialised human trafficking and antislavery training in all states. In relation to forced marriage, the committee took some of its information and advice from what occurs in the UK and recommended that the government consider extending the application of protection orders relating to forced marriage to people over the ages of 18 years. This is because of statistics showing that it happens not just to young women under the age of 18 but also to women over the age of 18, and they also need to be given the same protection at the airports that the current law gives to those under the age of 18.

The other issue, when we talk about forced marriage here in Australia, is that there are a number of organisations that do a lot of work in education in relation to forced marriage, yet they simply are not funded to reach out to enough schools to do that work. In the past year, ACRATH, for example, which does a lot of that education on forced marriage in schools, only had enough funding to reach out to about nine schools in the whole country. So we also recommended that the Commonwealth continue to fund organisations and programs that engage in outreach, education and awareness-raising activities on forced marriage issues and that the Commonwealth consider the inclusion of education on forced marriage in the school curricula, because that would make it a mainstay and, I would hope, bring extra funding on the issue to those schools.

We also recommended that information on forced marriage be consistently and routinely provided to newly arrived migrants in Australia through their engagement with government officials and agencies as well as appropriate community groups and programs so that they realise that forced marriage is outlawed in this country. It is not allowed. In fact, it has been legislated in this place to be against the law and should therefore not be occurring, yet we know from those Australian Federal Police statistics that, unfortunately, that is the situation that a number of young women and girls in Australia find themselves in.

One of the really important recommendations that I want to raise in the time I have left is the issue of compensation. We know that human trafficking and slavery comes under the federal Criminal Code, and yet there is no national compensation scheme for victims of human trafficking and slavery. Instead, they have to rely on the various nuanced state victims-of-crime compensation schemes, which differ depending on which state you look at. I think in Tasmania it's around $10,000 and in Queensland it's $100,000. If you're in a situation where you're trafficked, where you're in a forced marriage and slavery or slavery-like conditions—whatever situation you are in that warrants some form of compensation—then it shouldn't matter whether it occurred to you in Queensland or Tasmania; the compensation should be the same. So we recommended that there should be a national compensation scheme for victims of human trafficking and slavery that can be funded out of proceeds of crime funds, so that it doesn't have to come out of consolidated revenue.

All of these recommendations will now be considered by the government, I am sure, and I hope that they look upon them favourably. I will continue my work in this space on the Joint Standing Committee on Foreign Affairs, Defence and Trade, which is inquiring into a modern slavery act for Australia, specifically focusing on the supply chains of businesses. I hope that inquiry considers the recommendations of this inquiry as well.

Senator KAKOSCHKE-MOORE (South Australia) (16:58): I welcome the tabling of the report of the inquiry into human trafficking, slavery and slavery-like practices by the parliamentary Joint Committee on Law Enforcement. The human trafficking inquiry has raised many crucial issues for this parliament that must be urgently addressed. The committee heard harrowing evidence of human trafficking and slavery occurring both in Australia and through Australian channels. Submissions and evidence received by the committee painted a picture of modern human trafficking in Australia and abroad. This evidence shone a light on the many forms human trafficking can take. Be it the exploitation of foreign workers in Australia, women being trafficked into the sex industry or children and, in some cases, adults being subjected to forced marriages, it was abundantly clear that we could be doing more to protect victims of trafficking, but that we should also be doing more to prosecute the offenders. I welcome the recommendations made by the committee in this important report and call on the government to act on them without delay.

This inquiry also heard evidence about a relatively new but rapidly growing form of human trafficking—cybersex trafficking. Cybersex trafficking, or the live streaming of online child exploitation, is a form of trafficking that is transnational. It involves offenders in Australia who commission the abuse of children in developing countries on a pay-per-view basis. The Nick Xenophon Team supports the committee's recommendation that the Commonwealth government investigate the adequacy of current legislative provisions in criminal offences to address cybersex trafficking, but we believe the committee could and should have gone further.

The Australian Federal Police and the Commonwealth Director of Public Prosecutions have reported increases in cybersex trafficking cases over the past three years. The International Justice Mission has helped rescue 201 children who were forced to participate in online sexual exploitation between 2011 and May this year. Our current legislation is failing to ensure that adequate protection is provided to victims, especially to children, who are exploited through cybersex trafficking by criminals in Australia. The Nick Xenophon Team believes the government must amend offences under the Commonwealth Criminal Code to ensure that the conduct of offenders engaging in cybersex trafficking falls within the relevant criminal provisions and can be effectively prosecuted by Australian law enforcement bodies.

In June this year, I moved amendments to the government's Passports Legislation Amendment (Overseas Travel by Child Sex Offenders) Bill 2017 based on very real concerns that by taking passports away from paedophiles they would in turn use the internet to satisfy their sick desires. My amendments related to sections of the Criminal Code concerning Australians who travel overseas in order to engage in sexual activity with children, as well as those who use the internet to procure or groom children for sexual activity. My amendments would have made abundantly clear that a person committing an offence under these sections do so when they are in the presence of a child by a means of communication that allows the person to see or hear the child. In other words, committing the offence virtually should make them no less culpable.

Since I moved these amendments in June, the International Justice Mission has reported that 12 victims of cybersex trafficking in the Philippines, some as young as two years, were rescued by authorities. But these are just the victims that we hear about. Hundreds, possibly thousands, of children remain vulnerable to online predators who seek to commission the sexual abuse and torture of these innocent victims. The government had the opportunity to deal with cybersex trafficking in June, when I moved these amendments. Instead, it allowed valuable time to go by before announcing legislation to deal with cybersex trafficking.

It was revealed in The Australian today that the government plans to introduce a broader package of reform which considers all aspects of the child sex offender crime cycle. This is a welcome announcement, but no details of the proposed legislation have been forthcoming, except for what has been reported in the media. The gaps in current the legislation need to be closed to stop these horrific crimes and to ensure that perpetrators are held accountable.

Efforts of law enforcement agencies must also not be hampered by internet service providers being unwilling to cooperate with Australian agencies undertaking investigative work into cybersex trafficking. In June, I also moved amendments to strengthen the Criminal Code by clarifying what information must be provided by ISPs and internet content hosts where the information requested is in the possession or control of the internet service providers. In almost a fifth of cybersex trafficking cases, police are not getting the vital information they need from internet service providers. Police say cooperation from ISPs is not always forthcoming, and it is often difficult to obtain crucial evidence, such as subscriber records, IP addresses and mobile data, to track down these paedophiles. Internet service providers should have greater responsibility to report this abhorrent crime when it occurs on their networks.

The Nick Xenophon Team is deeply concerned about the increase in cybersex trafficking and, in particular, the exploitation of young, vulnerable children. We believe Australia needs to take a strong stance against cybersex trafficking and for it to be a world leader in the prevention and eradication of this crime. However, legislation alone will not be enough to achieve this. That is why we strongly support the committee's recommendations regarding adequate funding for Commonwealth government programs, including the Australian Federal Police staffing and training and the national action plan to combat human trafficking and slavery. We agree that funding needs to be provided to law enforcement agencies to ensure that they are able to effectively combat and investigate human trafficking offences.

The parliament must act immediately on the recommendations made in this report. It is not enough to expose the depravity of human trafficking in Australia. We must do all we can to end it and to support the vulnerable people who are victims of these horrific crimes.

The ACTING DEPUTY PRESIDENT ( Senator Marshall ): Senator Kakoschke-Moore, would you like to seek leave to continue your remarks later? I think other senators would appreciate it.

Senator Kakoschke-Moore: I seek leave to continue my remarks later.

Leave granted; debate adjourned.

Senator DASTYARI (New South Wales—Deputy Opposition Whip in the Senate) (17:04): On behalf of the Chair of the Senate Standing Committee of Privileges, I present the committee's 166th report entitled Possible improper influence of a witness before the Environment and Communications References Committee.

Ordered that the report be printed.

Ordered that the report be adopted.

Senator XENOPHON (South Australia) (17:13): In relation to the Joint Select Committee on Government Procurement's report Buying into our future, I move:

That the Senate take note of the report.

This committee was established on 1 December 2016 to inquire into the Commonwealth procurement framework, particularly the amended Commonwealth Procurement Rules. At the outset, I wish to give special thanks to Dr Narelle McGlusky and Lynley Ducker from the committee secretariat and all their staff, who did such tremendous work in assisting the joint select committee, and also Senator Kitching, my deputy chair in that committee. Amendments to the Commonwealth Procurement Rules, the CPRs, came into effect on 1 March 2017, as a result of negotiations I entered into with the government, on behalf of the Nick Xenophon Team, to significantly improve those rules.

The aim of the amendments is to make sure that the full benefit of the Commonwealth's $57 billion worth of procurement flows to the Australian economy as much as possible. They will also ensure Australian regulations and standards are upheld. The amendments are designed to deal with the disadvantages faced by Australian suppliers accessing government procurement opportunities to level the playing field to give Australian companies, and Australian jobs, an opportunity to be part of that $57 billion worth of procurement.

The evidence received by the committee showed overall support for the amendments to the CPRS; however, there are concerns over effective implementation. Many of the new clauses were found to be too open to interpretation and to leave too much to the discretion of officials. The committee made suggestions to tighten up the clauses by refining or expanding the terms, and we have a good foundation to do so. The committee heard about several problems with the implementation of previous CPRs. These included a procurement culture that focused on lowest cost rather than value for money, a lack of accountability and transparency and unacceptable risk shifting. There is also a perception that, due to a lack of technical skill and expertise, the government has become an uninformed purchaser. The absence of a requirement to comply with Australian standards is considered another deficiency—something that the amended CPRs have dealt with by insisting on Australian standards.

There are several flow-on risks that may be detrimental to Australia more broadly. These include a loss of a skilled workforce, safety, economic and environmental risks and potential wastage—all matters that the CPR 17s are dealing with. Of real concern to the community is the possibility that the procurement system itself may present barriers for domestic businesses attempting to take advantage of procurement opportunities. The committee considered that comprehensive guidelines are essential to address the current deficiencies and ensure successful implementation of the new clauses. This is about shifting the culture of procurement in this country. New guidelines are required to remove the discretionary nature of decision making and replace it with specific standards that must be met. The guidelines should also mandate the evidence required from tenderers, in particular, an explicit definition is required for economic benefit and a weighting system to properly assess suppliers' claims, similar to the South Australian procurement system. The committee also considers that procurement-connected policies are needed to provide guidance for environmental sustainability and human rights. These guidelines and policies should be supplemented with a Public Service-wide training program, and improved record keeping is essential to address the lack of transparency and accountability in the current system. Contract management is another area that the committee would like to see better utilised to control implementation and maximise procurement and contract outcomes. Good contract management ensures tenderers meet their obligations and responsibilities.

If the amended CPRs are to encourage Australian suppliers, the Australian government must not enter into international trade agreements which diminish the benefits that underpin these amendments. Additionally, procurement officers must be better informed of the exemptions currently available in international agreements to preference domestic businesses. I am particularly concerned, as were members of the committee, about the GPAs —that is, the WTO GPAs—which have the potential to water down the benefit of these stronger procurement rules. The committee was made aware of a range of best-practice models able available for Australia to draw on to improve our procurement system.

At this stage, I refer to a procurement case study in the report into Rossi Boots Pty Ltd, but I want to pause briefly here to inform the chamber that, sadly, the former chairman of Rossi Boots, Dean Rossiter, passed away yesterday. He was an extremely passionate South Australian who came from a proud heritage of bootmakers. He was SA-proud and will be sadly missed, not just by the greater business community but also by his extremely loyal workforce and the many hundreds of thousands of customers of Rossi Boots. With this in mind, I pay tribute to Dean Rossiter. Rossi Boots is a family-owned company, established in South Australia in 1910. It makes 250,000 pairs of boots each year and employs approximately 80 people in its small factory in Adelaide. In 2014, the company missed out on a $15 million contract to supply 100,000 pairs of non-combat boots to the Australian Defence Force. The company was told their tender was compliant, but did not measure up on value for money. Instead the contract went to an Indonesian company. A former defence minister, Senator Johnstone, admitted that the cost differential was only 10 to 15 per cent, compared to boots made here in Australia. The company included information in their tender regarding the broader economic benefits that would have accrued from choosing an Australian supplier. They gave evidence to the committee that:

We certainly put forward in the tender the benefits that we believed would be forthcoming both to the economic situation in South Australia and in Australia in general, because we would be buying supplies from other places. We certainly talked about the desire from our own research and development of the Australian troops wanting to wear Australian made product.

The company also identified the anomalies that are not always taken into consideration when an Australian bid is assessed against an overseas bid. For example, government-imposed costs such as the superannuation guarantee levy, payroll tax, annual leave loading or long service leave, penalty rates and workers compensation all have to be factored into any tender bid for an Australian business—as it should be and as it must be—but they are not necessarily part of the cost for an international tenderer, and higher standards of safety are, in many cases, included when we're dealing with Australian made goods. Again, they gave evidence:

The point is that these are rarely seen when we start to look at the pricing overseas. They make up about a 25 per cent additional cost on top of whatever your manufacturing costs are.

Rossi Boots emphasised they were not implying that these costs should be removed. In fact, they are proud of the fact that they pay above-award wages to many of their employees. They have very low turnover of their staff. They are an excellent employer. On the contrary, they acknowledged that this was not taken into account. These absolutely appropriate high Australian standards are not taken into account when we're dealing with companies overseas.

We saw this contract go offshore. The money was effectively exported. Rossi Boots had expected to increase its workforce by 15 to 20 people, some 20 per cent. They would've purchased a lot of raw material from local manufacturers, so there would've been a spillover effect, and they probably would've invested in some new advanced computerised stitching. None of that occurred, because the defence department chased price, not value. We have seen our Army ration pack contracts go offshore. We have seen largely wasted discussion on shipbuilding, in terms of our supply ships, being conducted offshore. This has to stop, and the amended CPRs in this report are the key to that.

The committee believes that a three-pronged approach is necessary to address the implementation issues identified in this report and ensure the new rules are applied consistently, transparently and to maximum effect. We would like to see the publication of comprehensive implementation guidelines coupled with Public Service wide training to support officials to apply the rules effectively, the introduction of procurement-connected policies to safeguard the Australian government's role as a model procurer and the formation of an independent industry participation advocate modelled on the South Australian system to facilitate consideration of Australian benefit. Accordingly, the committee has made 16 recommendations to that effect.

The report had cross-party support and negotiated the amended CPRs in good faith in 2017. It provides a foundation that Senator Kim Carr, a former industry minister, acknowledged were a quantum leap of improvement in terms of what we've had in previous CPRs. But, of course, I always want to do better. I want to and intend to work with the government and all my colleagues in the opposition and on the crossbench to see that the CPRs are implemented and executed in full. I look forward to a positive government response to the report and its recommendations. I note the final recommendation of the committee to conduct a further review on the implementation and execution of the rules in 18 months time.

This is an important report. This is something that will make a big difference to Australian industry. At a time when we are losing manufacturing in our auto sector, this will build up our manufacturing sector. This is about good Australian jobs being able to be supported by having a level and fair playing field when it comes to procurement in this country. That is why this is so important. These rules are not perfect, but they are a significant improvement on what we've had previously, and this inquiry has been a very positive process to ensure that we are vigilant in terms of these rules, that we improve them and that we ensure that Australian government money—taxpayers' money—is, wherever possible, at every opportunity, used to promote Australian jobs and Australian industry so the manufacturing sector in this country, which is so absolutely important, can be revived. I seek leave to continue my remarks.

Leave granted.

Senator KITCHING (Victoria) (17:23): I rise to support the tabling of the Joint Select Committee on Government Procurement report, Buying into our future. I would like to take this opportunity to thank my colleague, the Senator for South Australia, Nick Xenophon, who served as chair of the committee and who I, as Deputy Chair, found very easy to work with, as well as the other members of the committee, those who gave evidence and those who made submissions. I'd particularly like to thank the committee secretariat, who are the vital backbone of every committee, so thank you Ms Ducker, Dr McClusky, Ms Leahy, Ms Lim and Ms Rowland.

The Australian government has a significant role to play as an investor and employer in Australian jobs and the Australian economy, which is why it's so important that all of our departments and agencies get procurement right. This review came about as the result of amendments to the Commonwealth Procurement Rules which were introduced in December last year and came into effect in March 2017. The committee was formed, and we've now handed down 16 recommendations, which are contained in the report. We received 53 submissions and held three public hearings across Melbourne and Canberra. Although it may sound rather dry, government procurement holds so much exciting potential for Australian industry. It can be a model procurer for other levels of government and, indeed, can have processes relevant for anyone procuring supplies and services.

To put some context around it, in 2015-16 Commonwealth agencies and departments reported entering into 70,338 contracts with a value of $56.9 billion. This direct expenditure is in addition to the funding provided by the Australian government to state and territory governments who procure goods and services on its behalf, predominantly in the form of infrastructure spending. Our biggest ticket items are vehicles—commercial, private and military; healthcare services; management; business and administrative services; building construction and maintenance services; and engineering, research and technology based services.

If I could refer to an inquiry currently being undertaken by another Senate committee, the Foreign Affairs, Defence and Trade References Committee, which is currently looking at the impact of Defence training activities and facilities on rural and regional communities, I would like to use this as an example of why the exemptions to the Commonwealth Procurement Rules contained in 'Appendix A: Exemptions from Division 2' allow flexibility and can enable the Commonwealth to be a more effective procurer. The example I'd like to use is the Department of Defence, who take their procurement policies and outcomes very seriously. As an example, Defence was awarded recently for being the No. 1 procurer supporting Aboriginal and Indigenous procurement in the Commonwealth. They use exemption 17, which is 'the procurement of goods and services from an SME with at least 50 per cent Indigenous ownership'. The Department of Defence have used this, particularly in northern Australia, to ensure that they are responsive to the communities that are there, particularly—obviously—the Indigenous communities. The reward for that has been better relationships in the North of Australia. The CPRs therefore have the flexibility contained in the exemptions, but the committee did have regard to whether they were the most appropriate and whether those exemptions were sufficiently broad.

Going back to whether the Commonwealth is an effective procurer, every time the Commonwealth spends taxpayer dollars, it provides a chance for a company to provide its services. These companies then employ people to carry out their work. In doing so, government procurement directly contributes to the health of the Australian economy. Government procurement, if done ethically, effectively and strategically, has the potential not only to create jobs and contribute to the economy but also to boost the skills of the Australian workforce, foster innovation and even create new industries. I will come back to that.

The Australian Labor tradition is of fiscal responsibility. Australians deserve to be sure and certain that the Commonwealth is spending Australians' money wisely and well. Additionally, government procurement has the potential to create what the CFMEU and the Textile, Clothing and Footwear Union of Australia have termed a 'multiplier effect', where government investment increases economic activity in downstream industries and communities and stimulates private investment in Australian industries.

Given the magnitude of Commonwealth spending on government procurement and the significance of this investment to the health of our economy, it was concerning to hear of some of the loopholes and inconsistencies which did exist and may well still exist under the new CPRs. The amendments to the CPRs were generally well received by those we heard from over the course of the review; however, there were significant concerns raised over the capacity for those amendments to be implemented effectively. Did clauses lack clarity? Did they leave too much up to the discretion of officials? Was there a culture of procurement focusing on lowest cost rather than genuine value for money? Was there a lack of accountability and transparency?

There was also a discussion regarding former procurement plans that some submitters believed had operated well. The ICT sustainability plan was mentioned by a number of submitters. As an example of that, Australian paper, for example, a business in the Latrobe Valley, invested in a $90 million de-inking and recycling plant. This is now the largest private employer in the Latrobe Valley, an area of Victoria which needs more investment whether that be private or public. It is also the largest exporter from the Port of Melbourne. It is Victoria's largest value-added processor of local wood. It generates $900 million of Australia's GDP. It supports 5,786 direct and flow-on jobs. It supports $494 million in household income. It generates $452 million in annual revenue to government, which equates to $1.88 for every ream of office paper manufactured. The Maryville operation supports 7.9 per cent of the Latrobe Valley's household income and 6.8 per cent of Latrobe's gross regional product. As you can see, good can come from government plans.

The committee's 16 recommendations make up a three-pronged approach which aims to address the implementation issues identified and ensure a consistent, transparent and effective application of the new rules. This involved the publication of comprehensive implementation guidelines which would explicitly address hither-to ambiguity terminology, such as the practical definition of economic benefit and the threshold for a business to be considered Australian.

As Senator Xenophon has already highlighted, we heard from South Australian footwear manufacturer Rossi Boots. He lost a Defence Materiel Organisation tender to a company which was based in Western Australia but manufactured their products in Indonesia. The South Australian Industry Advocate, which the committee looked at as a best practice model, reported that they considered where the majority of the workforce was based in assessing procurement, with 65 per cent of South Australian procurement going to companies with a predominantly South Australian workforce.

In addition to the publication of explicit implementation guidelines, we recommended that public service wide training be developed and undertaken to support and empower officials to interpret the rules as intended. The second prong, if you will, was the introduction of procurement related policies in order to safeguard the position of the Australian government as a model procurer, a role which has been overshadowed by doubt and the perceptions of the government as a procurer lacking skills and expertise. Again, we looked at another state-based best practice model in Victoria, where the Andrew's Labor government Project 10,000 policy has a major project skills guarantee where projects over a relatively low limit require at least 10 per cent of jobs on it to be set aside for engineering cadets, graduates or apprentices. As such a major investor in the Australian economy, the government has a responsibility to create policies which support and strengthen the procurement framework. The third and final element of the committee's recommendations involves a formation of an independent industry participation advocate modelled on the South Australian system, which would facilitate consideration and evaluation of the Australian economic benefit.

To summarise, the amended CPRs do provide a good working point for the structure and form of future government procurement in Australia. However, it was the opinion of the committee that more can be done in the implementation to safeguard standards of safety, human rights and ethics, sustainability and the environment, consistency and transparency, and a more effective evaluation of economic benefit. I recommend the report to the Senate and look forward to hearing the results of the inquiry, if established. I seek leave to continue my remarks.

Leave granted.

Senator BIRMINGHAM (South Australia—Minister for Education and Training) (17:34): I table a document relating to the report of the Environment and Communications Legislation Committee on its inquiry into the provisions of the Carbon Credits (Carbon Farming Initiative) Amendment Bill 2017.

Senator BIRMINGHAM (South Australia—Minister for Education and Training) (17:35): I move:

That this bill may proceed without formalities and be now read a first time.

Question agreed to.

Bill read a first time.

Senator BIRMINGHAM (South Australia—Minister for Education and Training) (17:35): I table a revised explanatory memorandum relating to the bill. I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

I am delighted to introduce this bill, which includes two important amendments to the Export Finance and Insurance Corporation Act 1991.

The first amendment in this bill will ensure that Commonwealth entities and companies can benefit from the Export Finance and Insurance Corporation's, or Efic's, financing expertise.

Following Efic's provision of services to the Northern Australia Infrastructure Facility, we know there is latent demand within the Commonwealth Public Service to leverage Efic's specialist expertise around financing. However, in its current form, the act does not allow Efic to share its expertise within the Australian government.

This amendment unlocks the potential for Efic to provide assistance to Commonwealth entities and companies in the operation and administration of financing programs, when required. Access to Efic's expertise will be on a fee-for-service basis and will be subject to ministerial approval to ensure there are checks and balances. The fee will be compulsory, but must not be such as to amount to taxation.

The second amendment to the Efic Act will enable Efic to better support small and medium sized enterprises (SMEs). SMEs are the engine room of the Australian economy. The majority of Australian exporters are SMEs. Despite this, SMEs traditionally find it more difficult to secure export finance, especially when their target market is an emerging or frontier one.

This is where Efic plays a valuable role. Efic helps Australian SMEs bridge the finance gap when their bank is unable to assist – enabling them to tap into new overseas markets for their products and services and grow their exports. This is great news: more exports means more economic growth, more job opportunities and a better standard of living for all Australians.

This bill further strengthens Efic's focus on supporting Australian SMEs that cannot obtain private sector finance to expand their reach overseas. This focus is paying dividends. During the course of the last financial year, Efic provided 130 SME exporters with over $150 million in funding. However, Efic could do more to help Australian SMEs.

This bill responds to the new ways in which our SMEs are growing Australian exports and expanding their reach overseas. The amendment keeps references in the Efic Act to support for manufacturing and expands the definition of an "eligible export transaction" by adding references to support for tourism operators, online businesses, exporters of intellectual property and other related rights, and businesses engaged in overseas direct investment.

The changes give these businesses the ability to benefit from an Efic loan. Previously, Efic could only provide a guarantee for a loan from another bank for these types of exporters of Australian goods and services. This change will save these businesses time and money by allowing them to borrow directly from Efic.

For example, consider the case of a small charter business running whale-watching tours out of Brisbane or the Gold Coast. The business wanted to increase its capacity to meet the needs of the growing number of international visitors. With its bank unable to help, they approached Efic. However, Efic could not assist under the existing legislation. The changes in this bill will enable Efic to loan to tourism operators like this one, which provide services directly to retail customers.

The amendment does not change Efic's purpose of operating only in the market gap where banks are unable to help, and any support must still be attached to exports. For SME exporters, this proposed amendment is estimated to save up to $12,000 per application by providing Efic the ability to provide a direct loan rather than just a guarantee.

The changes also introduce a legislative stipulation to ensure there are more Australian jobs where Efic supports Australian businesses to expand overseas. I note that it is already Efic policy that applicants for its overseas direct investment financing product must not use it to fund the outsourcing of jobs. The changes will require businesses to certify in writing their reasonable belief that Efic's support for overseas direct investment will result in a net increase in the number of people employed in Australia by their business or an affiliate.

In summary, the changes contained in this bill will benefit a wider range of Australian SMEs, often family-owned, as they seek to export, innovate online, sell intellectual property, expand their reach overseas and grow jobs at home. This bill will ensure Efic remains agile to respond to their financing needs. It will also enable Commonwealth entities and companies to leverage Efic's financing expertise when required. These reforms will make it easier for Efic to support our exporters in their contribution to the growth of Australian jobs and the promotion of trade, tourism and investment.

Leave granted; debate adjourned.

Senator BIRMINGHAM (South Australia—Minister for Education and Training) (17:36): I move:

That these bills may proceed without formalities, may be taken together and be now read a first time.

Question agreed to.

Bills read a first time.

Senator BIRMINGHAM (South Australia—Minister for Education and Training) (17:36): I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

CUSTOMS TARIFF AMENDMENT (TOBACCO DUTY HARMONISATION) BILL 2017

This bill will increase the excise equivalent customs duty imposed on roll your own tobacco to align it with the rate applied to cigarettes.

Consistent with the cognate Excise Tariff Amendment (Tobacco Duty Harmonisation) Bill 2017, the rate adjustment will correct a disparity in the tax treatment of cigarettes and roll your own tobacco.

To correct the disparity, this bill will adjust the per kilogram tobacco duty rate to reflect the new assumption that the average cigarette contains 0.7 grams of tobacco and not 0.8 grams of tobacco as applies under the current rate.

This adjustment, to be made over four years, will make sure the Government taxes tobacco more equally, regardless of its form.

Full details of the measure are contained in the explanatory memorandum.

EXCISE TARIFF AMENDMENT (TOBACCO DUTY HARMONISATION) BILL 2017

This Bill will increase the excise imposed on roll your own tobacco to align it with the excise rate applied to cigarettes.

The Bill will phase in the rate adjustment over four years to match the timing of existing excise increases. The first adjustment to the roll your own tobacco excise rate will occur on 1 September 2017.

The rate adjustment will correct a disparity in the treatment of cigarettes and roll your own tobacco. This disparity exists because there are two excise rates that apply to tobacco, a stick rate which is applied to manufactured cigarettes with 0.8 grams or less of tobacco per cigarette and a per kilogram rate which is applied to all other tobacco products, including roll your own tobacco and most cigars.

The stick rate simplifies the taxation of cigarettes and reduces compliance costs. Consequently, cigarettes have excise imposed at the same rate regardless of their tobacco content, as though they contain 0.8 grams in tobacco.

However, the average cigarette contains less than 0.8 grams of tobacco, which means the Government imposes excise on the average cigarette at a higher rate than roll your own tobacco.

To correct this disparity, this Bill will adjust the per kilogram tobacco excise rate to reflect the new assumption that the average cigarette contains 0.7 grams of tobacco.

This adjustment, to be made over four years, will make sure the Government taxes tobacco more equally, regardless of its form.

A cognate Bill, the Customs Tariff Amendment (Tobacco Duty Harmonisation) Bill 2017, will increase the excise equivalent customs duty on roll your own tobacco.

Full details of the measure are contained in the explanatory memorandum.

Debate adjourned.

Senator PRATT (Western Australia) (17:39): In rising to speak to the Fair Work Amendment (Corrupting Benefits) Bill 2017, I want to place on record Labor's complete intolerance for corruption. While the bill is based on the recommendations made by Commissioner Heydon in the final report of the royal commission into trade unions, there has been no movement from the government to introduce these changes for more than 12 months. Unfortunately, the process in drafting this bill has been manifestly inadequate, which has led to significant issues in the drafting of offences and definitions in the bill. I'd like to reflect on those in my remarks today.

The Department of Education and Training confirmed that there was no stakeholder consultation during the drafting of this bill. That is a very problematic thing when you are looking at trying to create operational law. I simply cannot see how a lack of consultation with stakeholders can make for effective law. So we on this side of the chamber will be moving amendments to the legislation based on consultation with stakeholders and a number of recommendations from them. I would like to call on all my colleagues in this place to listen to the voices of those stakeholders—professionals from across the community, including from businesses, unions and the legal profession—and fix the very real issues that are in this bill. I implore you to pass Labor's amendments.

The changes before us in this bill are in theory very important, but they won't work unless they are done properly. The kinds of offences that are in this bill should not be drafted because of ideology or a misguided anti-union sentiment. They must be drafted in a way that ensures consistency and fairness and does not bring risk to those people who are clearly doing the right thing. Employee and employer groups alike have raised concerns about this bill. The drafting of the offences in the bill could have significant unintended consequences for both unions and employers. Changes are necessary to make sure that the bill is fair, and so Labor is proposing some amendments. We believe that our amendments will improve the bill but they will not change its intent. So I encourage all of my colleagues in this place to support these amendments and to address the flaws in this bill and address some of the overreach in the drafting of the offences that could cause significant and unintentional harm to the good operation of unions and the businesses with which they work.

The bill establishes penalties of up to 10 years in prison and 5,000 penalty units for what is called 'corrupting benefits' offences. Stakeholders, including people from business, unions, academia and the legal profession, including the ACTU and the Law Council of Australia, have raised significant concerns with the drafting of these offences. Stakeholders are concerned that the bill makes it an offence, for example, for activities which are not corrupt or corrupting and are standard activities in the conduct of good business. These include things like unions requesting and receiving payment from employers for wages or entitlements that were owed to ex-employees; unions negotiating the settlement of disputes with employers before court proceedings are commenced; and standard hospitality during negotiations—for example, an employer might make a conference room available, with morning tea, for a negotiation, or a union might need to travel to a remote location by company aircraft.

There is very real concern that this bill includes such activities and many more and will place the ordinary day-to-day work of unions, employers and employer groups at significant risk, when there is no corrupt behaviour or malpractice taking place. While this may not be the intention of the bill, the poor drafting that's displayed here means that many stakeholders have expressed that this is, indeed, a very real risk and one which should be rectified prior to the passing of this bill. Labor's amendments mean that these perfectly proper activities are within the statutory exemptions.

The drafting of this bill is also a departure from the usual approach to criminal offences of a similar nature—that is, it does not require the defendant to act dishonestly. In similar crimes of this kind of seriousness, the Commonwealth Criminal Code contains two analogous offences of bribery of Commonwealth officers, where the fault element is dishonesty. This should be included in the bill. There's no reason that the test for corrupt behaviour of officials of registered organisations and employers should be any different to those of Commonwealth officers.

Rather than the test being that someone must act dishonestly, what we have before us is a bill that requires the corrupting benefit to be sought or provided with the intention of influencing an official or employee of a registered organisation to carry out their duties or obligations 'improperly'. Yet, this term is not even defined in the bill. That is of extraordinary concern in regard to the good function of the legislation before us. It creates far too much ambiguity for what are quite heavy penalties, and it may even widen the scope of the offence beyond what is intended by even those in the government. These are, indeed, strict liability offences. There is no fault element, no requirements for the receiver to intend it to have purposes that are dishonest, corrupt or improper. This is completely out of scope for what this legislation should be putting forward. And that is why Labor will be moving amendments to address these significant issues.

The amendments will require that the actions of the defendant are, indeed, dishonest, and bring it in line with the standards under our Criminal Code. This makes complete sense given the purpose of these offences is to prevent corrupt or illegitimate payments. We should not be inadvertently criminalising conduct that, indeed, is not corrupt. Labor is also moving an amendment to provide that the advantage of any kind not legitimately due, intended to be obtained by the provision or request of a corrupting benefit, must be related to the affairs of the registered organisation. However, what we have got in the bill in its current form is quite problematic because there's no requirement that the advantage not legitimately due as quoted from the bill, intended to be obtained by the provision or request of a corrupting benefit, is connected to the affairs of the registered organisation. This is problematic. As a result, this would create a very wide field of potential operation for the new offence, one which travels beyond the circumstances that should be addressed by these provisions. This is a key provision that should be included and that was, indeed, included by Commissioner Heydon in his model legislation.

Another issue that Labor seeks to address in our amendments is the differing tests for the person making the bribe and the person taking it. In its current form, the bill sets out the test of intention for offering a bribe at intention of influencing, while the intention for receiving the bribe is intention to tend to influence. Again, this differs from the Criminal Code in which offences of giving a bribe to a Commonwealth officer and a Commonwealth officer receiving a bribe set the intention at influence with a maximum of 10 years in prison. So while we have a Criminal Code that sets a lower test—that is, tend to influence—the penalty is lower, and that is five years. So there is no justification for setting intention at 'tend to influence' for the offence of receiving a corrupting benefit while also imposing a maximum penalty of 10 years. Labor's amendment will address this by making the intentions the same.

Another issue I want to address briefly before I finish my remarks relates to the definition of 'related party'. The current drafting requires unions to disclose any potential benefits from an enterprise agreement which may flow to a related party. This term is currently defined in a way that is unreasonable. Our amendments, which will come before the chamber, will instead define 'related party' in a way that is more direct and specific—that is, as the branch or branches of the organisation, officers of that branch, an entity controlled by the organisation, a spouse of a person mentioned in paragraph (b) or a member of the national committee of management, or divisional committee of management, of which an officer of the branch is also a member.

All of our amendments that will come before the chamber seek to ensure that the intention of this bill remains while also making sure that the legislation is fair and does not adversely impact on the usual and standard operations of unions and employers. It makes sense to me that this legislation should be in line with our Criminal Code and that we should seek to genuinely punish dishonesty and corruption in all areas, ranging from government officials to private enterprise. I hope that that makes sense to my colleagues in this place and that Labor's amendments to this bill are supported.

Senator SIEWERT (Western Australia—Australian Greens Whip) (17:51): I would like to move the second reading amendment that Senator Rhiannon was going to move. She mentioned it in her speech, but then, due to question time, did not actually move it. I move the second reading amendment standing in Senator Rhiannon's name:

Leave out all words after "that", insert:

"the bill be withdrawn and redrafted to provide for the establishment of a national Independent Commission Against Corruption."

Senator BERNARDI (South Australia) (17:52): It's hard to follow that outstanding contribution, but I'll do my very best. I rise tonight with some concerns about this bill, the Fair Work Amendment (Corrupting Benefits) Bill 2017, which I've spoken with the minister about, and I have made some suggested amendments which, contrary to other assertions in this place, the minister has said she will look towards accepting and resolving. I say 'contrary to other assertions' because, somehow, there is a mythology about how those on that side of the chamber are supportive of a clean and transparent union movement and those on this side of the chamber are somehow opposed to the union movement—and it's not quite as binary as that at all.

I and Australian Conservatives support the right of the people to work together cooperatively and to form gilds and trade unions to represent their interests. I, personally, don't believe that the union movement's interests or the workers' interests and the business owners' interests should be diametrically opposed—in fact, quite the opposite. My experience has been that good employers, particularly in small businesses, go out of their way to look after workers. They go out of their way to look after those who they feel a responsibility towards, both a financial one and a personal one. They accommodate requests and demands that are outside the scope of any formal agreement because it is a cooperative venture. By that I mean, without employers, you don't have employees and, quite frankly, without employees, you don't have a union movement—a union movement which has become somewhat engorged and somewhat recalcitrant in some aspects and has become, indeed, a law unto itself. That concerns me, and it should concern a lot of people. That's why, in principle, I support this bill. I will be supporting this bill notwithstanding the fact that it does need some amending, and I'm confident that will take place in the committee stage, before we get to the third reading.

But I do note that, earlier, Senator Doug Cameron, who is one of the hardliners in the space, said, 'There will be no negotiation. The minister refused to discuss and negotiate.' That's not my experience. I just want to put that on the record. The minister has been very cooperative and very helpful. She hasn't got everything that she wanted from me as a result. Nonetheless, I found that to be a very positive effect.

The Dyson Heydon royal commission on trade unions had this headline finding:

It is clear that in many parts of the world constituted by Australian trade union officials, there is room for louts, thugs, bullies, thieves, perjurers, those who threaten violence, errant fiduciaries and organisers of boycotts …

I don't know too many people who think that's a respectable finding from a royal commission or think that's an appropriate contribution from sections of the trade union movement to Australian business. It is little wonder that our competitiveness is struggling and that we have difficulties with smaller businesses who are competing with larger businesses who, it turns out, in many instances, are in bed, figuratively, with the union movement.

I welcome the decision by the coalition to attempt to legislate their election commitment. It's worth noting that it took several times to legislate their previous commitments on the royal commission. It takes persistence, it takes courage, it takes resilience in the face of an ongoing diatribe in some respects and public abuse. It took the calling of a double dissolution election to prompt it—

Senator Farrell: That was a great idea.

Senator BERNARDI: Not that it was really that good of an idea, as Senator Farrell suggests. Although, it did allow Senator Farrell to return to the bosom of the Labor Party where he was previously knifed and treated so poorly on account of his gender—because he was a man. He was knifed because he was a man. I don't support that. I know Labor may support that. Nonetheless, if you would like to continue to interject, Senator Farrell, I would be delighted to engage further.

Nonetheless, they called a double dissolution election. I have to say, it is a welcome thing that, after so much discussion about marriage inequality, we're actually returning to what I think is, really, truly important business for the businesses and employees of Australia. We're talking today about corrupting benefits. Corrupting benefits is something that I don't think anyone can truly argue for. We need to be arguing against the benefits of corruption, whether it be in the union movement, in the business movement, in politics or anywhere else in life. The government—full credit to them—has got on with the job. It is trying to deliver a result for the people of Australia in the face of what is a rather intransigent Senate at times.

This bill, though, comes in a landscape where we are, essentially, not having a free market. I'm a supporter of free markets. I'm a supporter of competition. I'm a supporter of level playing fields. But this bill is being delivered where there is not a level playing field. We do not have a free market. We have sweetheart deals between big business and the union movement. I could, in some ways, maybe say I could justify sweetheart deals in favour of small business, because they are the ones that have everything on the line. But, no, rather than support small businesses—the engine and the backbone of the economy—the union movement has chosen, instead, to get into bed with big business to trade off employees' conditions and rates of pay for a benefit for themselves. It is an indictment on sections of the union movement. I am pleased it has been brought to light through both the Dyson Heydon royal commission but also through the detective work of this government and those in the media.

The sweetheart deals are disadvantaging small business. You don't have to look very far from the existing labour movement to identify some of the key players. Mr Shorten, the leader of the Labor Party and the alternative Prime Minister in this country, was head of the AWU, and he negotiated the Cleanevent deal. This was a deal where the AWU automatically received every new staff member of Cleanevent as a member of the union unless they opted out. It was a manifest benefit to union numbers which increased their weight and influence within the Labor movement itself, and it swelled their coffers. That money, of course, came at the expense of employees. Cleanevent paid the AWU Victoria branch $25,000 a year in return for maintaining a Work Choices era agreement. They did not pay penalty rates. That, in itself, saved Cleanevent an estimated $2 million by underpayments to workers. Let's get that right. Cleanevent saved $2 million by underpaying workers through a cosy sweetheart deal with the union movement that delivered members to the union and $25,000 a year in cash. That is an indictment upon Mr Shorten. But somehow he likes to think that he is a representative of the workers. It just goes to show you cannot trust what they say but you can rely on what they do, and Mr Shorten's history speaks for itself.

I also note that there have been other cosy deals done in the union movement, and the SDA, my sometime allies in some matters of critical importance to the country, have nonetheless let me down on this occasion. In some respects, I have a great deal of respect for them because of the views that they've generally upheld within the Labor movement, but they did a cosy deal with Coles and Woolworths. It has been suggested that the AWU, Mr Shorten's union, assisted in the negotiation or brokering of the deal and that it was about getting the SDA members to strengthen their voice in the Labor movement itself. It turned out that the deal was done between Coles and Woolworths, but then, on reflection, the Fair Work Commission threw out the deal and ordered Coles to pay $100 million in underpaid wages. The cost to workers of the sweetheart deal negotiated by the AWU between Coles and Woolies and the SDA was $100 million in underpaid wages. I don't think that's alright. Why is it that big business, through its influence or ability to fill the coffers and swell the ranks of the union movement, can somehow pay less than the award rate and compete unfairly against struggling small business owners?

There are also question marks over the deals in place with McDonald's and KFC, where unions have signed off on workers getting less than the Fair Work Commission's levels. Under those circumstances, it's little wonder there is this proliferation of institutionalised fast-food joints, like McDonald's and KFC, at the expense of small family-run businesses—the local chicken shop; dare I say, the local fish and chip shop that one of my former colleagues used to run. The small business that somehow struggles to survive has to pay $3 an hour more in comparative pricing in competition or they will get savaged by the very same union movement that has sold out the workers in big business. That doesn't pass the commonsense test, and it's why this legislation is absolutely important.

We could also ask ourselves: why is it that a company like Target, for example, pays all its staff superannuation into the relevant union's REST industry super fund? These are not benevolent institutions. These funds now go on to fuel media outlets, they provide jobs to union bosses to supplement their incomes, and they are political players in this space. That may be okay, but let's not pretend that it should just be accepted as the norm. Let transparency shine upon it and ask ourselves: why is Target doing this? What is the cosy deal that's attached to it?

There are all sorts of hints and allegations of corruption that have taken place in years past. You have to look no further than what dogged former Prime Minister Julia Gillard in the sense that she assisted in setting up the AWU reform association at the request of Mr Blewitt and Mr Wilson which co-opted funds for Thiess, the construction company, under the guise of training that never took place. That money was used to buy a house, it was used to pay solicitor's fees for Ms Gillard at Slater & Gordon and it was allegedly used for renovations. In the end, it was a dodgy deal. I don't know if anyone has been charged with that, but it was a dodgy deal and I think it is directly relevant to these sorts of things. If unions can think it is okay to coerce or trade away benefits or entitlements in the name of interest for the union and companies think it is okay and that is the cost of doing business, we need to fix it—not to diminish the union movement and not to diminish workers, but to strengthen business in this country, to strengthen the confidence in the system that there is a level playing field. That is the challenge, and this bill goes some way towards that.

But it is no surprise that many unions are complaining about this bill and they are talking up civil disobedience. In short, like any organisations that have had it too easy for too long, they get a bit lazy about representing their workers' interests, about recruiting new members and about justifying the positions that they have had. They want sweetheart deals to continue because it is easy for them, and it gets excused and covered up by successive administrations. Even though I am not part of this administration any more, I am proud of the fact that the minister and the government have pursued this doggedly because it is the right thing to do—and I will come back to that.

I'm not here to beat up on the union movement. They have their place. They have played an important role and guilds and associations and freedom of that is part of this country. But we have to make sure that it's not going to be the dominant part of the future of this country. We want to empower small business to grow into big business. We want to empower people to be able to get in and compete and be innovative and provide good returns whether they are going to generate one job or a thousand jobs or who knows how many millions of jobs in the decades to come. But you can't do that when you have to deal with potentially corrupting benefits or corrupt bodies. Not all unions are like that but clearly some are—and I think we have to fix it.

I will finish by saying that Minister Cash, on 20 March in the AFR, said that legitimate payments would include those for genuine services provided by a union or genuine payment of membership fees. Genuine services by a union movement can be for anything. It can be for a legal representative for employees. It can be for help with their industrial relations. It can be help with any manner of things. We're not trying to stop a union from helping people. We are trying to stop dodgy unions from trading away workers' rights in order to help themselves. Minister Cash also said:

If payment is made into a safety training fund—

a bit like the AWU reform association that Ms Gillard set up all those years ago—

you would need to show that you actually have a program of, basically, safety training—

Who would have thought?

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.

Not engorged rates—not three times the going rate—but at market rate. In short, if a company is paying a union, it has to be to the benefit of the employees and the company, not just for the benefit of the union or to get the company some sweetheart deal.

Australian Conservatives support this bill. We support a level playing field. We support transparency and our institutions, like unions, functioning within the rule of law and everyone in business getting a fair go.

Senator ROBERTS (Queensland) (18:09): Australia has enormous potential. Listening to Australians right across the country—from Cape York through to Melbourne through to Perth, South Australia, parts of New South Wales and the regions of Queensland—this is abundantly clear. The secret of our success, until recent times, has been, No. 1, our great people—competent, caring and highly creative, reflecting the human spirit. We also had cheap energy until recent times, and we used to have stable government. These are the hallmarks of human progress. We had a level playing field, a fair go, entrepreneurialism, innovation and wages growth that spurred the economy, based on productivity increases.

I am fiercely pro-human, and I am fiercely pro-Australian. My allegiance is only to Australia, and, in listening to people around our country, we can see serious blights that are undermining our future. People are now under increased control from remote bureaucrats, remote not in terms of geography but in terms of their connection with the rest of Australia and their high salaries. Energy prices are skyrocketing. On taxation, why would we tax payroll? We know that when we tax something we decrease its use, so why tax payroll? We don't want to decrease payroll; we want to increase employment.

We are threatened by corrupt union bosses. Notice I said 'union bosses' and not 'unions'. Union bosses have stopped protecting workers and have started to fleece members instead. We are under threat from big companies that are working in a cabal with union bosses, destroying wages and taking away things like weekend penalty rates in secret, cosy deals that have caused union bosses to abandon hundreds of thousands of people, costing them hundreds of millions of dollars in lost wages. They were taken away by people who were in the union movement and who are now in this parliament, in the Labor Party. The engine of employment and innovation is being destroyed by some union bosses.

The Fair Work Amendment (Corrupting Benefits) Bill 2017 has been designed to protect workers from the corruption that is associated with big businesses paying off union bosses to avoid union action or activity. In essence, it aims to stop that cosy relationship where big business buys a union official and undermines rates, including penalty rates.

This bill does three things. Firstly, it outlaws payments to corrupt an official. Secondly, it outlaws all payments from employers to a union, except for a few that Senator Bernardi has discussed. Thirdly, it forces disclosure of financial benefits in enterprise agreement bargaining. These flowed from the Dyson Heydon royal commission, and surely no-one was asleep while that was underway. This bill exists to curtail corrupt activity uncovered in that trade union royal commission. It bans bribes, notably paid to union officials by companies, employers, to influence the outcome of bargaining agreements. Giving, receiving or soliciting such a payment would be punishable by up to 10 years imprisonment or a $1 million fine or both. That is reasonable, because union bosses and some large multinational companies, and Australian companies, have cost honest workers hundreds of millions of dollars in lost wages. This bill also requires disclosure, on the part of negotiating officials, of any personal interests that may be affected by the outcome of an agreement.

Let's pause and go back to the purposes of unions. When they were formed, there were five main purposes: to protect wages; to protect health and safety; to protect working conditions; to ensure security of employment; and to ensure a healthy, long retirement. They were noble organisations, the early unions, and they fought hard for workers' rights over centuries. But now look: what they fought for is now enshrined in legislation. So what is a union to do? Either they can improve the services they offer and earn the right to members' dues, or they can do what some of the larger unions have done and play mischief or be a vehicle for union bosses' power or personal finances and political alliances.

The CFMEU is tied up. It is taking its coalminers' dues and funding people like GetUp! and the Greens to destroy coalminers' jobs. That is what is happening; in cahoots with people like George Soros, the international financier. Who, pray tell, was on the foundation GetUp! board of directors? It was none other than the current Leader of the Opposition, Mr Bill Shorten. Sadly among unions, the union membership is plummeting outside the public service, because people can sense that not only are they not getting value for their money but better alternatives are springing up in the form of modern unions. Even Martin Ferguson can now see the need for an IR reform push. According to the Financial Review today, former ACTU boss Martin Ferguson has called on the Turnbull government to enact a new round of workplace relations reform, backing a resource industry push for new employee rights to opt out of collective agreements and move to individual agreements, restrictions on legal strikes and a higher bar to prove unlawful employer actions—Mr Martin Ferguson, a former leader of the union movement.

Labor and the Greens are locked in a race for cash, corrupting cash, often procured corruptly. Coalminers are paying dues to kill their jobs. This, sadly, is the reality of Australia today. Let me give you some examples, Deputy President. Toll Group paid $100,000 to the Transport Education Audit Compliance Health Organisation, TEACHO, an entity controlled by the TWU to secure approval of an enterprise agreement being negotiated by the TWU, and agreed to two additional payments of $25,000 if the TWU used its rights of entry to report to Toll on the practice of its competitors, and if the TWU got Toll's competitors to contribute, the same amount to TEACHO.

Saipem paid $1 million at the request of the Maritime Union of Australia at the same time it was negotiating the use of foreign-crewed tug boats on the Blacktip gas field project in Darwin. The payment was paid to the MUA's relevant entity, Maritime Employees Training Ltd—sounds nice, doesn't it. SapuraKencana paid more $350,000, a third of a million dollars, at the request of the MUA at the same time it was planning to use foreign-crewed tugs. Dredging International paid almost $1 million, at the request of the MUA, apparently as part of a deal to finalise an enterprise agreement.

Van Ord paid over $1 million at the request of the MUA to avoid industrial disruption. Thiess paid $100,000 to the Building Trades Group Drug and Alcohol Program., an entity controlled by the CFMEU, while it was constructing the Epping to Chatswood rail link in Sydney—apparently to secure industrial peace. The payment was falsely invoiced as being for drug and alcohol safety training, but was siphoned into the CFMEU's general account. Underworld figure George Alex made regular cash payments of $2,500 to an official of the CFMEU NSW to ensure favourable treatment of Mr Alex's companies, even though they were repeatedly phoenixed, leaving workers without jobs and with unpaid wages and entitlements.

Senior Mirvac executives provided around $150,000 worth of free building goods and work on then CFMEU Queensland president Dave Hanna's house in Cornubia, Queensland, in order to secure industrial peace and otherwise favourable treatment by the CFMEU. Mirvac disguised the work by inflating invoices by subcontractors on their existing Orion shopping centre project. A system of NSW construction companies owned by Jianqiu Zhang paid the CFMEU NSW more than $118,000 to avoid entering into an enterprise agreement with the union. The payments were disguised as donations for various charitable causes, including safety industry dinners, picnic day sponsorship, mates in construction and a Friends of Sinn Fein speaking tour. A number of Canberra construction companies paid a CFMEU ACT organiser $210,000 to win construction work in Canberra. The CFMEU did not report these allegations to any authority when they came to light and paid the organiser a generous redundancy payment when he quietly resigned from the union.

There are many, many ways this is going on. Thiess Contractors paid the AWU—which is connected to Mr Shorten—apparently in return for good relations with the union. The payments were invoiced by the AWU as payments to a special education trust. But it was never paid into a trust and was instead paid directly into the AWU's general account and used for general union costs.

Potters Industries made regular payments to the AWU Victoria—there's the AWU again—apparently in return for good relations with the union. The payments were invoiced by the AWU as payments for paid education leave. Can you believe that? But the payments were made directly into the AWU's general account and used for general union costs—money making and a laundering machine.

Huntsman chemicals paid tens of thousands to AWU Victoria—there it is again, AWU—as part of an agreement to have the company pay for the AWU to employ a former union shop steward for work he never did, apparently in return for good relations with the union. The Greens and the ALP would support this to continue.

Thiess John Holland paid AWU—there it is again—Victoria $300,000 plus GST to ensure minimal industrial disruption while they built the east link freeway extension in Melbourne's eastern suburbs. The AWU issued false invoices to disguise the payments as training, back strain research, AWU magazine advertisements, forum tickets and conference sponsorships. But none of these benefits were actually provided. The payments were never disclosed to AWU members or employees—they were hiding it from their own members.

ACI Operations paid AWU—there it is again—Victoria around $500,000 to secure industrial peace while they laid off workers at their Spotswood glass manufacturing factory. The AWU invoiced the payments as paid education leave, but the payments were predominantly used to offset a loan to renovate the union's Victorian office and for other general costs.

Cleanevent, as others have known, paid AWU—there it is again—Victoria $75,000 to maintain an enterprise agreement that paid cleaning workers well below award rates and stripped them of penalty rates, overtime and shift loadings. How is that, hey? The payments were detailed in a secret letter between the AWU and Cleanevent and never disclosed to the cleaning workers, who were amongst the lowest paid in Australia. Level 1 casuals working at events were entitled to 176 per cent more per hour under the award than under the agreement sealed by these payments.

Unibuilt paid Mr Bill Shorten $32,000 to fund his 2007 election campaign manager while the company was negotiating an enterprise agreement for the AWU, for which Mr Shorten was then national secretary. In return Unibuilt received favourable treatment from the AWU and were able to promote themselves to potential customers as friendly with the union.

Chiquita Mushrooms paid AWU Victoria $24,000 to avoid industrial unrest while it was transitioning its mushroom picking workforce to labour hire. The AWU falsely invoiced the payments as paid education leave and never disclosed the payments to Chiquita employees.

Winslow Constructors paid AWU Victoria around $200,000 and provided the union with lists of employee names that were used to secretly sign up employees to the union. In return, the AWU provided Winslow with advance notice of terms of a competitor's enterprise agreement, giving them a competitive advantage. AWU hid the payments behind false invoices for OH&S training, workplace inspections and similar.

On and on and on it goes. But actually it started way back. In 1982, the then royal commission found a building company secretly provided materials and free labour worth over $150,000 to the secretary of the Builders Labourers Federation and other BLF officials, which was used to construct various beach houses. These payments were apparently made to secure industrial peace—isn't that blackmail?—and good relations with the unions. And there are many, many others.

What we have seen is the fact that the union bosses and some of their large unions are an unaccountable, untaxed, regulated monopoly that prevents other unions entering the market. They seek control for union bosses who manipulate people and provide power over the governments that created the very regulations that protect the union bosses. It gave them power and control over their own members, to the detriment of their own members.

I am going to foreshadow two amendments, because some union bosses are clever and will find ways to circumvent the law so they can continue to shaft workers. Subsequently, I foreshadow two slight tweakings of the bill via amendments that will capture this sneaky behaviour. The amendments I propose seek to close a loophole where a union may charge executives of a business, for example, unreasonably large union membership fees in lieu of no longer being able to obtain cash through other nefarious means as prevented by this bill and, secondly, to ensure benefit funds that are established for union members—perhaps, for example, widows—go directly to those the money was proposed for, not siphoned off somewhere else. We all know that some union bosses are so audacious in their attempts to steal money, they establish fake funds for victims and never give the victims one cent from that fund. My second amendment, seeks to target that specific behaviour and ensure that these funds are only exempted if they directly benefit those the money was intended for.

One Nation supporters have a moral compass and a very strong work ethic. One Nation supporters and the people we appeal to, and speak for, have a strong work ethic and a moral compass. They have a need to get back to identifying with the real Australia and real Australians—a need to appeal to and restore Australian values, which include fairness and being forthright and open. I have been forthright because this bill appeals to both aspects—the moral compass and the strong work ethic.

A workplace free of arbitrary control from union bosses and accomplices at the senior levels of companies doing deals with union bosses will be more productive. That will lead to better wages, better security and always to a safer workplace. We need to restore the secrets of our country's past success—a creative and competent workforce that is unleashed and a caring workforce that is unleashed. We need to get back to cheap energy prices, to restoring property rights; we need to get back to fair taxation and to minimised central government control. While we are going down that path to bring back this country, we must remove the controls that are arbitrary, unelected and we need to restore the secrets that made our country a success. We need to unleash Australians. As a servant to the people of Queensland and Australia, I recommend this bill for support, and we will be moving amendments.

Senator CASH (Western Australia—Minister Assisting the Prime Minister for the Public Service, Minister for Employment and Minister for Women) (18:28): I rise to sum up debate in relation to the Fair Work Amendment (Corrupting Benefits) Bill 2017. I thank all honourable senators for their contribution to this debate and, in particular, I want to acknowledge the important contributions of those who are supporting the government's legislation. The bill will help to restore integrity to Australian workplaces. It is a bill that is pro-worker and anti-corruption. It will end the secrecy, as outlined so eloquently by Senator Roberts, that has marked dealings between employers and unions for decades. It will ensure that corrupt payments between a business, employee, union or union official are banned with significant criminal penalties for anyone who flouts the law. Penalties will apply equally to employers and unions who are both implicated by a secret payment.

The Heydon royal commission uncovered dozens and dozens of payments, secretly changing hands between employers and unions, which were collectively worth millions and millions of dollars. One of the worst offenders, as revealed by the royal commission, was, unfortunately, the Australian Workers' Union in Victoria, the union of Bill Shorten, the current Leader of the Opposition. The royal commission revealed hundreds of thousands of dollars of payments flowing from companies to the union, including payments received from Thiess, John Holland, ACI Operations, Winslow Constructors, Chiquita Mushrooms, Huntsman Chemical, the Australian Jockeys' Association and the Australian Netballer Players' Association. Perhaps the most disgusting example of them all—and the one which, unfortunately, Mr Shorten has again and again failed to apologise for—is, of course, the payments made by Cleanevent to the AWU. In return, in many cases, companies had the assurance that the AWU would not—I repeat, would not—agitate for better conditions or better pay for workers, the very workers they were supposed to represent. And, in fact, we have just heard an example on the Hansard record where the workers, when paid under the award, received 176 per cent more than was negotiated by the employer and the union under the relevant enterprise bargaining agreement.

Commissioner Heydon also observed that these practices were not new but have been carried on for at least the past 30 years. He also found that what he uncovered is just the small tip of an enormous iceberg. The royal commission found that not even existing laws on bribery, extortion, blackmail and secret commissions are enough to outlaw these arrangements. Those laws are not easily applied to payments involving unions and their officials and, even in the cases where they can be applied, have failed to deter the regular practice of such payments being made. Commissioner Heydon recommended that new provisions be introduced into the Fair Work Act to criminalise such payments. That is exactly what this bill does. The bill brings an end to the secretive, corrupting practice that has marked dealings between employers and unions for decades. The bill will rightly ensure that the true beneficiaries of workplace deals are the workers.

I would like to thank the Senate Education and Employment Legislation Committee for their inquiry into this bill and all of those individuals and organisations who contributed by preparing written submissions and giving evidence at the public hearings. In particular, I would like to thank the crossbench for negotiating so constructively with the government. We will be adopting a number of their amendments.

I will just address some matters raised in the debate. There has been some discussion about whether this bill will apply equally to employers and unions. I can assure all senators that the bill has been carefully drafted to capture both sides of a corrupting benefits transaction. As the final report of the royal commission stated, corrupt receipt implies corrupt payment. An employer who offers or provides a secret financial benefit to a union is as heavily implicated as a union that solicits or accepts such a payment. The penalties for both parties are the same, and both parties can be held equally liable for the one transaction. Similarly, each of an employer, union and any employer association will have to disclose to employees most financial benefits they stand to gain under an enterprise agreement before employees vote on the agreement. By banning corrupting and illegitimate payments and requiring disclosure of benefits arising from enterprise agreements, workers will be protected from secret deals that conflict with their interests.

They will also be told what deals have been negotiated into enterprise agreements they are asked to support. For example, in the case of the Cleanevent deal, done by the AWU in Victoria, the royal commission found that, in exchange for payments of $25,000 per year, the Victorian branch of the AWU, in substance, agreed not to seek better terms and conditions for three years for those of its members employed by Cleanevent. For workers employed by Cleanevent, the outcome was appalling. All involved benefitted from the deal, except the people the union was supposed to be representing. That is not why unions exist.

Our bill will help to ensure that workers receive the benefit of honest employers and honest union officials who represent their interests. This bill is anti-corruption and pro-worker. It is about ensuring that the members of the unions are put first by both their union and the employer the union is dealing with. All parties in this place who believe in fairness, honesty and transparency in workplaces should support this vital reform to outlaw corrupting benefits. If you believe in stopping corruption and if you believe that employers and the unions they are negotiating with must put workers first, then this bill must be supported.

In the time I have left I now want to turn to some of the comments that have been made during the debate. In particular, I turn to the opening statement made by Senator Cameron in his second reading speech. He stated:

Labor has unsuccessfully attempted to negotiate amendments with the minister. The minister's intransigence and refusal to take heed of the concerns of the Labor Party, the union movement, employers, the Law Council and academics reinforces the view that this government and its minister are driven by ideology as distinct from fair and effective legislation.

Madam Deputy President, in this place there is a rule that you cannot call someone a liar, so I will not do that. What I will say, though, is this: the statement put on the record by Senator Cameron is false, as I have personally raised with him. Both my office and the office of the shadow minister, Mr O'Connor, have negotiated in good faith for over two months now. I won't table the various emails and the various documents that have been exchanged between the offices. But I will say that I have also raised my concern directly with Mr O'Connor's office, and they were kind enough to indicate that they were unaware of the statement that Senator Cameron was going to make. I take in good faith what the office of the shadow minister, former minister O'Connor, has said to me.

I will also say this: a number of amendments have been put forward by the Australian Labor Party. For the benefit of all senators, these amendments were negotiated, within reason, in good faith between my office and shadow minister O'Connor's office. For the benefit of Senator Cameron, I can advise the Senate that the government will be supporting approximately 90 per cent of the amendments that have been put forward. Again, those amendments were negotiated in good faith between my office and the shadow minister's office. We have also negotiated in good faith with a number of the crossbenchers, and I look forward to supporting One Nation's amendments and Senator Leyonhjelm's amendments. In fact, I would urge Senator Cameron, when we go into committee, to move his amendments straight up—given that we will be supporting the majority of them—and then we can debate those amendments that we cannot support and I will explain the reasons.

In relation to the second reading amendment moved by Senator Siewert on behalf of Senator Rhiannon, the government does not support the second reading amendment. The bill targets a specific issue through appropriate and targeted provisions in the same way that specific provisions apply to prevent corruption in the particular context of extortion, blackmail, bribery and corrupt commissions. The bill implements the recommendations of the Royal Commission into Trade Union Governance and Corruption and targets a specific problem that the commission identified as being widespread amongst employers and registered organisations. With those comments, I commend the bill to the Senate.

The CHAIR: The question is that the amendment moved by Senator Siewert in the name of Senator Rhiannon on sheet 8181 be agreed to.

The PRESIDENT: The question is that the bill be now read a second time.

Senator CAMERON (New South Wales) (18:55): I want to respond briefly to some of that faux anger and Logie-winning performance from Minister Cash in her second reading summing up. The reality is that, if this bill had been properly drafted in the first place, you may not have needed to accept 90 per cent of the amendments that the opposition are putting forward. If you'd have actually dealt with the key issues that the opposition were raising with you during those negotiations, you would have accepted some of the key changes that have been put forward by he Australian Industry Group, the Law Council of Australia and the ACTU and dealt with some of the concerns that were raised by the Joint Committee on Human Rights and the Senate standing committee. This is a real problem in the context of having clarity in this bill. The clarity is not there. If you had drafted it properly in the first place, maybe we'd have had some clarity, as the Law Council, the Scrutiny of Bills Committee and the Joint Committee on Human Rights sought.

As I indicated during my second reading contribution, we indicated that we were keen to work through some of the issues in the bill and that we were not happy and certainly not supportive of the bill as it stood. There are a number of amendments that we have before the chamber now. I would seek some advice from the Clerk. I know that all the amendments on sheet 8143 have been circulated, but I would certainly like to break it up into more manageable bites so that we can understand exactly what the government is prepared to accept and will not accept. We would like to move amendments (2), (3), (4), (5), (7), (9), (11), (12) and (13) together.

The CHAIR: Is leave granted?

Senator CASH (Western Australia—Minister Assisting the Prime Minister for the Public Service, Minister for Employment and Minister for Women) (18:57): I would seek clarification as to what they are.

Senator CAMERON (New South Wales) (18:58): They go to making dishonesty the fault element for the offences of giving and receiving a corrupting benefit. Minister, I should have indicated what they were.

Senator Cash: That's okay.

The CHAIR: Senator Cameron, for the point of clarity, would you state them again?

Senator CAMERON: These amendments make dishonesty the fault element for the offences of giving and receiving a corrupting benefit. They are amendments (2), (3), (4), (5), (7), (9), (11), (12) and (13), and I will be seeking leave to move them together.

Leave granted.

Senator CAMERON: by leave—I move amendments (2), (3), (4), (5), (7), (9), (11), (12) and (13) on sheet 8143 together:

(2) Schedule 1, item 3, page 3 (line 21), omit "to act improperly".

(3) Schedule 1, item 3, page 4 (after line 23), at the end of Division 1, add:

536CA Dishonesty

(1) For the purposes of this Part, dishonest means:

(a) dishonest according to the standards of ordinary people; and

(b) known by the defendant to be dishonest according to the standards of ordinary people.

(2) In a prosecution for an offence against this Part, the determination of dishonesty is a matter for the trier of fact.

(4) Schedule 1, item 3, page 4 (line 29), after "defendant", insert "dishonestly".

(5) Schedule 1, item 3, page 5 (lines 9 to 13), omit subparagraphs 536D(1) (b) (i) and (ii), substitute:

(i) in the performance of his or her duties or functions as such an officer or employee; or

(ii) in the exercise of his or her powers or performance of his or her functions under this Act or the Registered Organisations Act; or

(7) Schedule 1, item 3, page 5 (line 25), after "defendant", insert "dishonestly".

(9) Schedule 1, item 3, page 6 (lines 1 to 5), omit subparagraphs 536D(2) (b) (i) and (ii), substitute:

(i) in the performance of his or her duties or functions as such an officer or employee; or

(ii) in the exercise of his or her powers or performance of his or her functions under this Act or the Registered Organisations Act; or

(11) Schedule 1, item 3, page 6 (line 26), omit the heading to subsection 536D(4), substitute:

Giving an advantage which would not be legitimately due

(12) Schedule 1, item 3, page 6 (lines 28 to 30), omit "whether a performance or exercise of duties, functions or powers would be improper, or whether an advantage would not be legitimately due,", substitute "whether an advantage would not be legitimately due".

(13) Schedule 1, item 3, page 6 (line 31), omit the heading to subsection 536D(5).

The amendments that we would also want to move together are to provide that the advantage of any kind, not legitimately due, intended to be obtained by the provision or request of a corrupting benefit, must be related to the affairs of the registered organisation. They are amendments (1), (6), and (10) on sheet 8143.

The CHAIR: Senator Cameron, could we suggest that we deal with the first ones relating to dishonesty that you just moved, and then we deal with these subsequent ones?

Senator CAMERON (New South Wales) (19:00): Yes, I just wanted to outline, broadly, where we're going so you know where we're going, and maybe some of the minister's advisers can then look at these other issues. I'll come back to them, as I've outlined. The other issue that we would want to deal separately with is item 8, and the effect of that amendment is to make the test the same for the person making the bribe and the person taking it—that is an intention to influence. Then (14) and (15) together—these amendments have the effect of changing the proposed offences of making and receiving cash, and in-kind payments from a strict-liability offence to one where the defendant has to act dishonestly.

The CHAIR: For clarity, we've broken them into four tranches.

Senator CAMERON ( New South Wales ) ( 19:01 ): Yes, and (16) as well.

The CHAIR: So (14), (15) and (16)?

Senator CAMERON (New South Wales) (19:01): No, (16) is separate, sorry. That amendment changes the definition of 'related party' in relation to the new requirements to make disclosures during negotiations of enterprise agreements. So those are the points within those amendments that act together. We would certainly want to deal with them in those terms.

The CHAIR: Is leave granted?

Leave granted.

Senator CASH (Western Australia—Minister Assisting the Prime Minister for the Public Service, Minister for Employment and Minister for Women) (19:02): Senator Cameron, to assist the chamber, will you now deal with the first bloc of amendments that you have put forward?

Senator CAMERON (New South Wales) (19:02): Yes.

The CHAIR: Just so we are clear, we are dealing with (2), (3), (4), (5), (7), (9), (11), (12) and (13) on sheet 8143?

Senator CAMERON ( New South Wales ) ( 19:02 ): Yes.

Senator LEYONHJELM (New South Wales) (19:02): Could you please repeat that?

The CHAIR: We are on Sheet 8143 and we are dealing with (2), (3), (4), (5), (7), (9), (11), (12) and (13). Senator Cameron?

Senator CAMERON (New South Wales) (19:02): I said, the effects of these amendments—and that's (2), (3), (4), (5), (7), (9), (11), (12) and (13)—are to make dishonesty the fault element for the offences of giving and receiving a corrupting benefit. The bill contains two new corrupting-benefit criminal offences with maximum penalties of 10 years and/or 5,000 penalty units. The criticism of the way these offences have been drafted come from stakeholders in business, the Ai Group, the ACTU representing workers, academics, legal experts and the Law Council of Australia. There is no requirement in relation to either of these new offences that the defendant act dishonestly, which creates a situation of strict liability where an alleged offender's state of mind or intention will be irrelevant to the determination of guilt. This is a departure from the usual approach to criminal offences of this seriousness. For example, the Commonwealth Criminal Code contains two analogous offences of bribery of Commonwealth officers where the fault element is dishonesty, and the Criminal Code defines 'dishonesty' as 'dishonest according to the standards of ordinary people and known by the defendant to be dishonest according to the standards of ordinary people'. So instead of being based on these existing Criminal Code offences, the new offences in the bill require the corrupting benefit to be sought or provided with the intention of influencing an official or an employee of a registered organisation to carry out their duties or obligations improperly.

There is no definition of improperly in the bill. The absence of a definition of 'improperly' has the potential to give rise to considerable ambiguity and to widen the scope of the offence beyond what is intended.

The Law Council has identified the lack of any definition of the term 'improperly' and 'not legitimately due' in the bill as causing significant uncertainty and potential overreach. Labor's amendments address the concerns raised by stakeholders by requiring the actions of the defendant to be dishonest. The definition of dishonesty is imported from the Criminal Code, so the test for corrupt behaviour for officials of registered organisations and employers is the same as that which currently exists for Commonwealth officers. I ask the minister if she is prepared to accept these amendments, as moved together, that deal with the issue of making dishonesty the fault element.

Senator CASH (Western Australia—Minister Assisting the Prime Minister for the Public Service, Minister for Employment and Minister for Women) (19:06): In relation to the amendments that you have moved, the government is prepared to agree to those amendments. We have reviewed the Senate committee report and we have obviously discussed this. The amendment is to define 'dishonestly'. The term 'dishonestly' is used, I am instructed, in the comparable Criminal Code offences of bribing a Commonwealth public official.

In relation to the word 'improperly', it was recommended by Heydon as part of the recommendations. I disagree that there is not clarity surrounding the use of the term 'improperly'. There is actually a common-law definition of improperly, which the courts will utilise to obviously determine whether or not something was improperly done. However, for the purposes of clarification, and certainly, as I said, to work in good faith, we are prepared to accept the amendments and utilise the term 'dishonestly'.

Senator RHIANNON (New South Wales) (19:07): I want to indicate that the Greens will also support these amendments. But, first off, we need to give some context as to where the debate is at. When the minister finished up in her second reading speech, she made a great flurry with accusations about false statements. Minister, your comments that your bill is anticorruption and pro-worker is false. It's more than false, it's a bit of a joke. I think it would have stand-up comedians really enjoying themselves dining out on that line that it's pro-worker. It's not pro-worker coming from this government when you see how the bill has been designed. It's drafted so broadly, it will make it very difficult for people to conduct what are currently seen as lawful activities. The Law Council nailed that as a very major problem.

It's not pro-worker and, at times, it's not actually pro-business, because it could well just make things so complex that it could be barely workable. Then when you talk about it being anticorruption—and this also goes to how Labor have just voted. You need to deal with corruption across the whole society. That's what we should be doing now, rather than just targeting a section of the workforce, a section of the business community and industry. It shows that there are other agendas going on here. Everybody just had the opportunity to get behind a national anticorruption commission. What did we see? We saw Liberals, Nationals and Labor voting together to vote against it, once again. It is really extraordinary. It's not anticorruption. It's not pro-worker. It's actually another con job. It could actually be quite destructive in terms of how relationships in the workplace play out.

Senator CAMERON (New South Wales) (19:09): I have to rise to respond to a couple of the points that Senator Rhiannon raised. Senator Rhiannon and the Greens did not raise the issue of a broader anticorruption bill with the ALP at any time during the lead-up to this debate.

I know a little bit about anticorruption issues. I appeared before ICAC as a witness. I've been to the Supreme Court as a witness for the prosecution against former Labor Party ministers in NSW. So I am personally supportive of a broader anticorruption bill coming at some time to this place after proper discussions and consideration between the parties.

Senator Rhiannon interjecting—

Senator CAMERON: You can intervene all you like, Senator Rhiannon. You have not raised this issue with us. We are—and I certainly am—supportive of a broader anticorruption situation in this place, but it is not appropriate to raise that now as an issue that we should be making a decision on right now. We are not going to do that. We think, and you've agreed, that we need to make these amendments to make this bill better. They are based on the consideration of the scrutiny committees of both the House of Representatives and the Senate. We think that is very important.

The issue of the Heydon royal commission has raised its head. As I said, from my point of view this was nothing more than a political royal commission. There's no doubt about that. The commissioner was biased. The commissioner showed no elements of being impartial within that royal commission. The treatment that some witnesses received compared with others was an absolute disgrace. It's pretty typical of this mob across here that they do, as soon as they come into power, run royal commissions against their political opponents. That's their modus operandi. There is also no doubt that ideology from the government benches was driving that royal commission. There is absolutely no doubt about that whatsoever. Heydon was biased. It was politically influenced by the government. It is just unacceptable that this type of approach is taken by the coalition. Every time they get into government they want to run royal commissions against their political opponents. But that's a matter of history. That's a matter of fact.

We have here a badly drafted bill which breaches a number of conventions that have been supported over a long period of time by the scrutiny committees of this parliament. I'm glad to see that the minister has conceded the commonsense position that various parts of the bill were not appropriately drafted and that the amendments will make it a better bill, even though we have to wait and see what the final outcome is. This should be about dishonesty. It should be about giving and receiving corrupting benefits. It shouldn't be about a wider ideological attack on the trade union movement.

One of the issues that has not been discussed this evening in the committee is the fact that the bill does not deal with corruption from company to company. There has to be union involvement before a company can get engaged in this. We are of the view that if there are to be wider discussions and debates about corruption then they should be done in an appropriate manner with proper consultation with the opposition. We will sit and listen to the issues. We will make our decision about where we go with it. But this bill is still deficient in the context that company-to-company corruption is not covered.

Senator RHIANNON ( New South Wales ) ( 19:15 ): Again, for the context, Senator Cameron, I'm certainly not doubting—I have heard you say a number of times—your own personal commitment to a broad-based anticorruption commission. But, again, you are giving cover to your party—saying how there was no notice about our second reading amendment for a national ICAC. There was heaps of notice. Firstly, you know that we've been talking about this for a long time. In the case of this specific legislation, my colleague Adam Bandt in the House of Representatives moved this same amendment. That was back in May. You have had all that time where we could have been working together. We've been saying it time and time again. I know that me colleagues, particularly Senator Richard Di Natale, has repeated it time and time again that we are ready to work with you on a national ICAC. So squibbing it is just not a good enough excuse. That is actually what has happened here.

So, yes, I believe your sincerity. But Labor have to actually step up and get on with the job. At the moment, you are in an extraordinary situation working with the Liberals and the Nationals on something that is targeting the union movement. It's a con job from them.

Senator HINCH (Victoria) (19:16): I want to support something that Senator Cameron said in his dissertation a few minutes ago about Senator Rhiannon. I am just confused—and I thought that I was a member of a national integrity commission Senate inquiry which has been conducting public hearings all over the country—as we all come to the conclusion whether we would need and what form we would need a national ICAC. I personally support it. I think that's what we are meant to be doing at the moment. So I just want to support Senator Cameron's earlier comments.

The DEPUTY PRESIDENT (19:17): The question is that items 2, 3, 4, 5, 7, 9, 11, 12 and 13 on sheet 8143 be agreed to.

Question agreed to.

The DEPUTY PRESIDENT (19:17): The President has received letters requesting changes in the membership of committees. I draw the Senate's attention to there being two nominations for the one position on the Foreign Affairs, Defence and Trade Legislation Committee and on the Foreign Affairs, Defence and Trade References Committee. In accordance with standing orders, ballots will need to be held to determine which one of the two senators who have nominated is to be appointed to each committee. I understand that it is the wish of the Senate that the ballots be held on Wednesday 9 August, 2017, immediately prior to government business being called on.

Senator CASH (Western Australia—Minister Assisting the Prime Minister for the Public Service, Minister for Employment and Minister for Women) (19:18): by leave—I move:

That Senator Rice replace Senator Xenophon on the Economics References Committee for the committee’s inquiry into the Northern Australia Infrastructure Facility, and Senator Xenophon be appointed as a participating member.

Question agreed to.