Feb 10, 2014

The Coalition’s poor record on political royal commissions

The government is poised to announce a royal commission into unions. But if there's a systemic problem in Australian commerce, it's not corrupt officials in our ever-shrinking trade unions -- look instead at ASIC and the AFP.

Bernard Keane — Politics editor

Bernard Keane

Politics editor

There are, formally, two types of royal commissions -- investigative commissions and policy advice commissions. But in reality there are those you can't avoid politically, and those you think will hurt your opponents. A investigative royal commission, of the kind the government will announce today into trade unions, assumes some major systemic failure in a regulatory system, whether it's police corruption, whether religious groups turned a blind eye to sex abuse, or the failure of financial regulation. In a well-ordered democracy with the rule of law, investigative royal commissions should be few and far between -- normal regulatory systems should function with reasonable effectiveness. And in practice, because of their expense, length and unpredictability, governments are reluctant to instigate royal commissions, particularly if the systemic failure being investigated might be close to home. There's never been a royal commission, for example, into how Australia joined the attack on Iraq on the basis of a falsehood, which cost taxpayers billions of dollars and served, as is now widely agreed, only to make Australians less safe. But, naturally, none of that applies if you regard royal commissions as political tool with which to pursue your opponents, which is a Coalition speciality. It was the Howard government that went after the CFMEU via the construction industry royal commission, and insisted on a second royal commission into the Australian National Audit Office's Centenary House lease in order to attack Labor. As it turned out, both were damp squibs. The Cole Royal Commission into the Building and Construction Industry -- an industry we all assume is rife with racketeering and organised crime -- produced no prosecutions of unionists, building companies or property developers, and found no evidence of organised crime in the industry -- a poor return for over $70 million of taxpayers' money. Nonetheless, the Howard government insisted the outcome justified the extraordinary, Stasi-like powers of the Australian Building and Construction Commission. This time around, the Abbott government hasn't bothered with having the royal commission first -- it introduced the restoration of the ABCC, complete with its powers of secret interrogation and overriding the right to silence, the moment it was elected.
"As long as the royal commissions generate a stream of negative stories about your opponents, it's not quite so bad if no matters get referred for prosecution ..."
And nearly 20 years after the first royal commission found no problems with the propriety of how ANAO lease was negotiated, the Centenary House Royal Commission Mark II found no evidence of any impropriety by the ALP or its arms-length negotiators, Lend Lease -- merely poor negotiation by bureaucrats charged with finding accommodations for the ANAO. The Coalition already has one royal commission, which commenced in December, into the housing insulation program, already the subject of a detailed ANAO review and an independent review by Allan Hawke, both scathing and detailed in their analyses of what went wrong, as well as state coronial inquiries and prosecutions of employers. Still, as long as the royal commissions generate a stream of negative stories about your opponents, it's not quite so bad if no matters get referred for prosecution, or if those that do never make it to court. As the aftermath of the AWB royal commission showed, even clear evidence of wrongdoing can be hard to translate into criminal prosecutions or civil actions, especially when you have a toothless regulator like the Australian Securities and Investment Commission on the case and the AFP can't be bothered resourcing a follow-up investigation. Indeed, if there's a systemic problem in Australian commerce, it lies less with unions, which now cover just 13% of private-sector workers, or crooked union officials, who can be dealt with via the criminal justice system -- there didn't seem to be any problems prosecuting former ALP president Michael Williamson, who faces sentencing soon for his HSU fraud. No, the problem lies more with Commonwealth regulatory and enforcement bodies -- most especially ASIC, which currently faces a Senate inquiry into its singularly inept performance in relation to the Commonwealth Bank. ASIC has lately further burnished its glittering reputation as a tough-as-nails cop-on-the-beat by waving through the share trading of David Jones directors after the Myer merger proposal. It was ASIC, combined with the Keystone Cops of the AFP, which declined to appeal former Gunns head John Gay's sentence for insider trading -- in which he was given a $50,000 fine instead of a jail sentence, while the AFP, astonishingly, decided to let Gay keep the proceeds of his crime, leaving him to enjoy the $800,000 he made from trading while he had price-sensitive information. Still, it's only shareholders' wealth at stake in corporate regulation -- wealth that, while worth $1.5 trillion in market capitalisation, is obviously a lower priority for the government than union membership fees and assets, which perhaps total a couple of hundred million dollars. If unions were indeed regulated just like businesses, as many in the Coalition (and the Institute of Public Affairs) want, crooked union officials would be over the moon at the prospect of getting to keep their bribes and avoid jail. In the meantime, the government and its media supporters will be hoping it gets more value from the tens of millions of dollars it'll spend on its new royal commission into unions than a few weeks' worth of headlines. If the union movement is indeed as riddled with corruption as the government wants us to believe, there should be a steady stream of prosecutions in the wake of this inquiry.

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16 thoughts on “The Coalition’s poor record on political royal commissions

  1. Electric Lardyland

    I see that the ‘budget emergency’ has once again flittered out of existence. Maybe its surreal, on again, off again state, is actually a cunning plan by the Minister for Science, to familiarise the nation with the general concepts of quantum mechanics. Oh, that’s right; we no longer have a science minister, do we? Silly me.
    Though it is interesting, isn’t it: how one week, the government can’t find $25,000,000 to assist SPC-Ardmona, on the stated and bogus grounds, that the factory workers were rorting the system with outrageous entitlements. Then now: why look it’s a $100,000,000 job creation scheme for struggling QCs and legal firms, who purely coincidentally, may just have a connection to the Liberal party.

  2. mikehilliard

    I find it hard to believe this adult government concerned with overspending & on the brink of guillotining welfare in the upcoming May budget would decided to waste millions of dollars of tax payers money for purely political ends.

    Actually I don’t find it hard to believe which is even sadder.

  3. Venise Alstergren

    Way back before my time there was a famous crook called John Wren. He always said the problem with royal commissions is that they’re there to protect the guilty.

  4. David Hand

    I don’t think this royal commission will deliver much. I think there is lack of effective governance in unions, illustrated by Craig Thompson’s defence that he no longer denies spending union money at Tiffany’s but that it wasn’t against the union rules. I doubt that a commission will find much.

    Of more fundamental significance is the fact that Labor is sending yet another union hack, with obligations and debts owed to union power brokers, to Canberra. This tendency to fill the parliamentary party with union hacks, who are then told what to vote for and what leader to elect, will make Labor hard to elect for the foreseeable future.

    Whatever happened to the visionary lefties with heart? People who have a real job? People like Peter Garrett?

  5. Mark from Melbourne

    The qualitative level of government in this country at federal and state levels sucks. How on earth do we improve it?

  6. John Burke

    The thuggery and corruption within the CFMEU is unquestioned, whether the Coalition wants to do something about it or just play politics is another matter. My own company was prohibited by the CFMEU and their antecedents, the BWIU and BLF, from sending product into Victoria from NSW and neither the Federal or Victorian Coalition governments were prepared to do anything about it.

  7. Electric Lardyland

    Oh, I don’t know, David, I suspect that the royal commission will drip feed enough stories, to keep much of the media occupied, just in case some of them look at Tony Abbott’s declining poll numbers and start getting tempted to write ‘Malcolm just about to challenge’ stories.
    And in regards to the Glen Quagmire of Australian politics, I suspect that it is just a somewhat desperate legal argument, to claim that it is not against union rules to spend dinner and breakfast at Tiffany’s. I mean, while there probably isn’t a specific bylaw that states, ‘thou must not spend union money relentlessly hiring prostitutes’, I suspect that this is because it was considered self evident that you shouldn’t behave in that manner, and therefore, nobody thought that it would be necessary to write it into the books.

  8. bushby jane

    Yes, agree at lack of talent and brains, especially in the Libs ranks. The AWU Royal Commission as I understand it was set up NOT to find anything to hurt folks like Alexander Downer, so perhaps this one will be set up to FIND things not-so-wrong with unions. Abbott is running with Shorten’s links to unions, so perhaps we could start running with Abbott’s links to the failures of the Catholic church considering his working for them at one stage and his continuing friendship with George Pell.

  9. Bill Hilliger

    Yes I too thought Abbotts continuing friendship with Mr Pell is a bit odd …but then again?

  10. Mark out West

    As someone who has investigated a number of matters after a Royal Commission I can say with confidence that if you want convictions then this is a way to ensure you get the least result.

    Evidence from a Royal Commission is not permissible in a court of law due to the absence of free will by virtue of their compulsion requirements, whether enforced or not.
    It can use documentary evidence that would not be permissible in a court of law and use hearsay evidence where deemed reliable by the presiding judge.
    Basically any matters referred to police have to be totally re-investigated but with the impediment that all parties knowing what you have and don’t have.

    I would say the most detrimental issue is those bit players who you would normally use to support documentary evidence use their silence provisions because they know fully what are becoming embroiled with. As you are dealing with the threat of bikies those prepared to tough it out would be few.

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