Senator SINODINOS (New South Wales) (17:40): This is an important debate. It is good that speakers from all sides can reflect on the role of trade unions in our society. May I begin by saying that there is no-one in the coalition who says that trade unions should not exist. This is not a debate about whether unions should or should not exist. This is not a debate about freedom of association. This is not a debate about governments taking action to rub out an important component of civil society. We all recognise the role that unions can play in society. But it is one thing to recognise the contribution of unions, one thing to say that they have an important role to play in our civil society, and it is another to ask: 'Do they have too much power, and is part of that power exercised by their ownership of one of the great political parties of Australia, the Australian Labor Party?' That is what we are talking about here. We are talking about who calls the shots, ultimately, in the Australian Labor Party. We saw no better evidence of that on that night in June 2010, when a sitting Prime Minister was bundled out of office, overnight. He was basically persuaded that he did not have the numbers in caucus the next morning; he had to go. He did not put up a fight in the end. He saw that the numbers were against him and he went. That was the night when the faceless men—they were all men that time—were identified as the people who coordinated and put together the plot. Those faceless men: David Feeney, Don Farrell and Bill Shorten—before he was a superstar. These are people who have several things in common. They are members of the Labor Party and formerly members of the trade union movement in some form or another. We had the spectacle that night of a member of a very senior union in Australia, the Australian Workers Union, Paul Howes—that shy and retiring Paul Howes, who shuns the media spotlight, who is afraid of the camera; he runs from the camera and the spotlight!—getting on national television to give a running commentary on what they had done to a sitting Prime Minister. The announcement was not even being made by a member of parliament. It was being made by a sitting trade union official: 'Oh, gee, oh, shucks, I've got an announcement to make: we've just removed or are in the process of removing a Prime Minister.' The gall! The Liberal Party did not have to do anything except sit back and watch as the trade union movement ordained, for whatever reason, that Kevin Rudd had to go. The order went out, and Rudd went. One of the things that was not in Rudd's favour is that from time to time he had had the temerity to speak out against the unions. He had had the temerity to talk about how the Labor Party was meant to be a broader based, more representative organisation. He had the temerity to do that. In 2007, he showed that temerity by watering down the even more extreme proposal that Julia Gillard, the then shadow minister, I think, for employment and workplace relations, was bringing forward to unwind the coalition's Work Choices legislation. The first draft of the Fair Work amendments, as drafted by Julia Gillard, were even more extreme than the version which finally saw the light of day as Labor Party policy in the run-up to the 2007 general election. It was watered down by Kevin Rudd. It was watered down by Kevin Rudd because Mr Rudd could see the damage that would be done to the image of the Australian Labor Party if the public were to see how much the parliamentary party appeared to be in the pocket of the trade unions. We know that they have to be in the pocket of the trade unions. They are owned: lock, stock and barrel. There are so many members of the Labor Party in this place—almost all of them—who owe being here to the union movement. They therefore have an obligation—a filial obligation, if you like—to defend the union movement to the last, and this creates a lens that they put on any piece of legislation which comes before us; a lens which has a very heavy trade union bias. That is why it is always a furphy when people say only 13 per cent of the private sector is unionised—yes, but through the union movement that is in control of the Labor Party they exert a disproportionate influence over the legislation and policy of the country. That is the point. The only thing ultimately that stops the Labor Party from doing more extreme things in favour of the unions is the potential for a public opinion backlash. In 2007, Kevin Rudd watered down the Fair Work Act. We can imagine how more extreme it would have been if Julia Gillard had had her way in. Julia Gillard came to the prime ministership owing her position to those faceless men and to the trade unions behind them. So often during her prime ministership we have seen that she has had to genuflect to those unions because of how she owes her position to them. When she came back from overseas and found that the redoubtable, long-suffering, beleaguered Minister for Immigration and Citizenship, Chris Bowen, had put together the first enterprise mining agreement involving Roy Hill Mine, owned by Gina Rinehart, she feigned surprise that this had happened. When the unions got in touch with her, they said, 'We've got a problem with this.' All of a sudden she turned around, dropped Bowen like hot coals and said: 'We've got to have a proper review of this. We've got to have a jobs board. We've got to do this and we've got to do that.' This was the case of a policy which had been carefully put together over 12 months, coming to fruition in this first enterprise mining agreement, suddenly being brought to a halt and requiring a further review because of a union backlash. That is not good for the culture of good government in Australia that there can be that sort of backlash and that sort of quick backtracking by a Prime Minister. We hope to be administering the biggest resources boom in Australia's history and we need to be putting in place a consistent, credible policy regime that will stand the test of time and which will be coherent. We cannot have a situation where unions can stop a whole process that has been going for 12 months if they find something wrong with a particular agreement. That is where good government comes up against the institutional ownership of the Labor Party by the labour movement. There are many here who will recall the Cole royal commission into the building industry—something fiercely opposed by many on the other side. Senator Marshall, who spoke before me, formerly an official of the ETU, in his maiden speech to the parliament attacked the Cole royal commission and said it was a 'politically motivated witch-hunt' that was 'desperately trying to uncover non-existent union corruption in the building industry.' Further, he praised the Electrical Trade Union and 'its many fine members who I had pleasure to work with during my tenure there.' Yet this commission catalogued over 100 types of unlawful and inappropriate conduct, including by the ETU. As a result of that the Australian building and construction commission was established as a tough cop on the beat to take a strong stand against union thuggery in the building and construction industry. The Office of the ABCC had helped the building and construction industry to increase productivity by 10 per cent and provided an annual economic welfare gain of something like $6.2 billion, reduced inflation by 1.2 per cent and increased GDP by 1.5 per cent. The number of working days lost annually per thousand employees in the construction industry fell from 224 in 2004 to 24 in 2006. At the same time, building costs fell by 20 to 25 per cent and long project delays were dramatically reduced. What did the Labor government do? In 2007, they promised, under employer pressure, to keep the Building and Construction Commission. But three or four years later, safe from that 2007 election, they watered down the building and construction commission—they defanged it. What has been the result? You only have to go to the Grocon site in the middle of Melbourne to see the result—the upsurge in days lost in the construction industry and the sort of lawlessness that is returning to the construction sector. Governments, apart from anything else, must uphold the law. They must not be seen to be turning a blind eye to the law. Construction is a sector where that is happening and that is not in the interests of good government. Senator Marshall talked about the importance of consultation. He talked about how good government is about consultation. Yes, he is right. As part of that consultation, trade unions and stakeholders on many important matters should be consulted. But this government has a track record of not understanding what genuine consultation is about. We saw that with the mining tax, where they mugged an industry overnight with a punitive tax which was actually designed to extract more revenue than the government had estimated at the time. This was only realised when the mining industry finally got a look at it. They were mugged and essentially told, 'Take it or leave it. The numbers are baked into the budget.' Was that appropriate consultation with an industry? Is that the model of consultation that they want? Contrast that with the consultation that has occurred recently with the trade union movement where we have seen a new shipping reform program put through which offers all sorts of concessions to the shipping industry to help preserve shipping industry jobs, because we are fundamentally uncompetitive in that sector. In return, allegedly, the Maritime Union of Australia have pledged a new productivity compact with the shipowners. We are still to see that productivity compact or any of its content. The reason the 1997-98 maritime dispute occurred is that a lot of people in Australia had had enough—shippers, customers of the shipping lines and customers of the ports. Our wharves were a laughing stock. Our crane rates were amongst the lowest in the world, if you measured wharf productivity that way. People say that what happened on the waterfront was pretty rough. But what had been happening on the waterfront for years with all the rorts was pretty rough. We can go back to the early seventies, we can go back to the painters and dockers, we can go through the whole history of the wharves, but the fact of the matter is that from a history in the thirties of protecting workers from very bad conditions on the wharves the MUA by the eighties and nineties had mutated into this body that was holding Australian exports to ransom. That is why the Howard government took action. Admittedly it was tough action, but things had reached a point where consensus was not achieving anything. Bob Hawke had tried consensus when he was Prime Minister, and it had not worked on the wharves. Sometimes a government has to stand up and say, 'The government runs the country, not any one sectional interest.' If there is one boast I make proudly, as a member of the opposition and particularly as a member of the Liberal Party, it is that we have no institutional owners. We are not owned by anybody. Senator Thorp interjecting— Senator SINODINOS: Yes, we have links with business, Senator Thorp, with big business and with small business. We have links with the middle class. We have links with aspiring working-class Australians. We have links with people who have made it in Australia. We have links all over the place. We are not owned by anybody. There are no bloc votes at our national conferences. Senator Chris Evans: Oh, come on! Senator SINODINOS: Senator Evans, you are a very experienced former trade union official. You know what I am talking about. Senator Chris Evans: You're going to tell me there are no factions next, aren't you? Senator SINODINOS: There are factions in all parties, but there are no bloc votes, and you know that, Senator Evans. Senator Chris Evans: No I do not. Senator SINODINOS: None of this confected outrage from you, Senator Evans; we know your form. The Liberal Party is not owned by any section of society; that is very important to remember. I am disappointed in the contemporary trade union movement. In my maiden speech I talked about the reform surge of the 1980s and the crucial role played by people like Bill Kelty. That was a trade union movement that was forward looking and progressive, that knew Australia had to change. Reform had to happen, and they were willing to help manage the change. Things like the superannuation system that Senator Marshall spoke about were part of the fruit of that sort of partnership. Today the trade union movement has become fearful, defensive and inward looking. The union movement today wants to mandate job security. They are not outward looking, they are not progressing. They are not sponsoring reform; they are standing in the way of reform, and that is not good for the government of Australia. Australia needs to keep reforming, particularly now that in the period ahead the terms of trade will not be rising in the way they have in the recent past. Our productivity has to go up. Our competitiveness has to go up. Our costs are 30 to 40 per cent out of kilter with the rest of the world. Some of that is the Australian dollar but a lot of it is the way our costs have gone up, particularly during the mining boom, and those costs are now locked in. We need to be more productive and more competitive. We need a union movement that is a genuine partner in that task, and that means that we have to review the Fair Work Act, among other things. It means we have to review all the ways in which regulations potentially shackle productivity and innovation. The trade union movement today, unlike that of the eighties, seems incapable of leading that debate and that change. It is too defensive. The trade union movement today is more concerned about the perks and lurks of being involved in the superannuation sector. We need a thorough investigation of the role of unions in industry funds and in the superannuation sector. The reason for that is there are too many instances where trade union officials are doubling up. They have their day jobs as union officials and they are trustees of super funds, and sometimes, as in the case of Bernie Riordan in New South Wales, they are also chairing financial service organisations that are providing services to those superannuation funds with which they are associated. What sort of conflict of interest is that? This is the same Bernie Riordan who was one of the prime movers in blocking the privatisation of electricity assets in New South Wales along with his good friend and now opposition leader in New South Wales John Robertson. How is that good for the government of New South Wales, one-third of the national economy, and therefore good for the state of the Australian economy? Yet today we have the Minister for Resources, Energy and Tourism, Martin Ferguson, who is one of the few Labor people who tells it like it is in the economic sector, saying that states should be looking to privatise their assets. This government should be telling the ETU and everybody else who is in the way to cooperate with state governments to get that done. This will unlock resources which can be used for other, more productive forms of infrastructure. How is John Robertson good for the government in New South Wales? He is now virtually irrelevant as Leader of the Opposition. Doesn't it say a lot about the structure of the Australian Labor Party that in New South Wales they can have a leader of the opposition who is one of the prime architects of the downfall of the former Labor government? This is someone who oversaw the destruction of that government from the time of Morris Iemma onwards. How is that good for the government of Australia? These are the structural problems that Labor has to face. All political parties face their challenges. None of us are exempt from criticism from time to time, but this is a structural problem that is getting worse and worse. It is because Labor in one sense became too successful at gaining power and, to paraphrase Lord Acton, power corrupts and absolute power corrupts absolutely. The trade unions today have absolute power over the Labor Party, and that is the challenge that the ordinary rank and file of the Labor Party face. These are the people who are out there handing out how-to-vote cards; the ones who trudge up, doing their best, because they believe in old-fashioned Labor values. Then they see their party is effectively run by faceless men—mostly men these days. They think, 'There must be a better way.' No wonder so many young, idealistic people on the left have tended to shift to the Greens or other parties. They think, 'I can't get ahead in the Labor Party. The only way I'll get ahead in the Labor Party is to join a union; I'll have to be sponsored by a union.' That is not a great message to give young people. This is a time when most young people look at unions and say, 'What can they really do for me in the modern workplace?' Senator Marshall talks about the protections provided by unions. The protection provided to every worker in Australia lies in the productivity and competitiveness of the Australian economy. That is what ultimately underwrites all the benefits that the labour movement and others have been able to get. Those benefits are there because we are a rich country—and, yes, there can be a debate about how we divide the spoils of being a rich country—but those riches were not gained by trade unions simply existing. They were gained by people working hard and having faith in the future. Sitting suspended from 18 : 00 to 19 : 00