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Ken Phillips is co-founder and Executive Director of Independent Contractors of Australia. He is a published authority on independent contractor issues and directs research on related commercial and trade practices issues. Through his numerous articles in newspapers and think-tank and academic journals, Ken is known for approaching issues from outside normal perspectives and is frequently sought out for media comment.

The government’s misstep on the Heydon corruption report is a gift for Labor

Monday, January 04, 2016

The Turnbull government’s response to the Heydon Royal Commission Report into union corruption sets the scene for policy and political failure. It has responded just as the union movement and Labor hoped they would.

Further, Labor and the unions have already started their process of a slow and steady ‘kill’ of the Coalition on the issue. They have a surprisingly high chance of success. For the government, my perspective is probably a counterintuitive unsettling of their obvious glee over the Heydon report.

The essence of the government’s strategic ‘misstep’ is treating the Heydon report as an exposure of union corruption. This panders to the Coalition’s ingrained culture that running an anti-union campaign is electorally appealing. Wrong! Such an approach appeals to rusted-on Coalition voters but unsettles and makes nervous much of the swinging middle ground. Labor is supreme at tweaking this swinging voter nervousness into ready suspicion of Coalition intent.

Further, what’s plainly illogical of the Turnbull government is that their anti-union trumpeting is inconsistent, distorts and degrades the quality of Justice Heydon’s report.

The Heydon report is not anti-union. It’s an anti-corruption report.

Heydon has not recommended deregistering any of the unions found to have ingrained corrupt practices. This includes leaving in place the construction union, the CFMEU, and the maritime union, the MUA.

What Heydon has found is a level of systemic corruption of business practices and businesses in their dealings with unions. Some of Australia’s biggest businesses and their executives have been found to have acted corruptly. So too have some of Australia’s biggest unions and their officials been found to have acted corruptly.

Heydon has recommended referrals for potential prosecutions of some 45 individual union officials, business executives, unions and companies. But if prosecutions were the only Heydon recommendations the report would be useless. Corruption is not stopped simply by targeting fall guys and gals!

Corruption happens most frequently where the law and social custom gives people the opportunity to be corrupt and get away with it. Where this happens corruption becomes ingrained, systemic and considered ‘normal’ practice.

What Heydon has done is to expose that Australia is a corrupt society. Contrary to Australia’s usual pontifications about the cleanliness of our business practices in an advanced economy, we are in fact dirty and grimy. Heydon says, “These aberrations (corrupt practices) cannot be regarded as isolated. They are not the work of a few rogue unions, or a few rogue officials. The misconduct exhibits great variety. It is widespread. It is deep-seated.”

Heydon goes further. “It would be utterly naive to think that what has been uncovered is anything other than the small tip of an enormous iceberg …” Heydon condemns Australia as widely corrupt.

But what has been the response of the Turnbull government?

The government’s immediate media release screams about “…‘widespread’ and ‘deep-seated’ culture of lawlessness among many union officials” and “ … grave failures of governance and a dangerous lack of accountability and transparency which has allowed corrupt conduct by union officials to go undetected or ignored….”

Not once in their media releases or comments can a reference to employer corruption be detected. The government is ignoring arguably the most important part of Heydon’s report, that corruption is widespread.

Thankfully Australia’s peak employer body, the ACCI, is of greater substance than the Turnbull government. The ACCI says “We also note that the adverse recommendations are not confined to unions and union officials. … we do not distinguish between unions or business …. Appropriate action must be taken to ensure that everybody plays by the rules and does the right thing.”

That is, the peak business body recognises that the Heydon exposed corruption problem involves both unions and businesses. The Turnbull government’s only public focus is unions. This is where Labor is moving in to do a political kill.

Labor’s response to Justice Heydon all along has been to accuse him of being a conservative political stooge. Now he is ‘sleazy.’ Labor says the report was “written by a B-grade subeditor of a sleazy tabloid.” Attack the man!

After this attack Labor plays the ‘worker versus bosses war’ card! “The iceberg is the thousands and thousands of workers in this country that are underpaid and exploited by employers,” they say.

Labor needs Turnbull to be anti-worker. By contorting the Heydon report as anti-union the Turnbull government opens the door for Labor to present the government as anti-worker. The Coalition has learned nothing from the experiences of its humiliating 2007 defeat induced by WorkChoices!

More on this tomorrow!

[First published in Business Spectator, January 2016]


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