Union commission witch-hunt and budget booby trap
The suspicion is George Brandis rushed to extend the royal commission into unions for one great purpose – to damage the Labor Party in the run-up to the 2016 election. Certainly its commissioner – the attorney-general’s favourite judge, who he referred to as “The Great Dyson Heydon” in a recent speech – has thrown a huge spotlight on the dark side of organised labour’s fundraising, featherbedding and criminality.
But the shadow attorney-general, Mark Dreyfus, smells a big rat. “Criminal behaviour, whether it’s in a union or a private company, should be immediately sent to the police to investigate,” he told the ABC. He accuses the government of an abuse of executive power to pursue political advantage. He says money spent on the $60 million inquiry should go to better resource crime fighting.
On the face of it, there is weight to the opposition’s suspicions that Brandis is playing politics. Nowhere in his letter to the attorney-general does the royal commissioner ask for an extension of time. In fact, he makes a point of saying he would be able to discharge his commission by the appointed time later this year.
“By December it will be possible to illustrate conduct falling within (the first four) terms of reference,” he wrote. These relate to slush funds, superannuation funds, income protection schemes and the like. “The evidence relevant to these topics has been comprehensive and will enable appropriate findings and recommendations to be made.”
The commissioner, who has a reputation for a Dickensian work ethic, has pushed his staff relentlessly to meet the deadline. There is a view among them that he’s been doing this because he wants to take up an academic appointment overseas after Christmas.
The government, though, couldn’t resist extending the terms of reference to better cover the criminality Heydon says he is also uncovering. It’s not clear how much convincing the commissioner needed to stay at the task, but he’s been given a whole year more to complete it. The final report will be handed down at the end of 2015, enabling the government to respond in 2016, which just so happens to be an election year.
But this is where Labor’s bleating should stop. Brandis is giving the Labor Party and the union movement reason for urgent reform, to make them more transparent, accountable and democratic.
Party elder senator John Faulkner pulls no punches on this front. “The stench of corruption which has come to characterise the New South Wales Labor Party must be eliminated,” he urged in a major speech during the week. “Failing to act is not an option. The party which gave you Eddie Obeid, Ian Macdonald and Craig Thomson, and promoted Michael Williamson as its national president, must now be open to scrutiny and its processes subject to the rule of law.”
All of these men came to exercise their power and influence in the Labor Party via their membership or connection with affiliated unions.
Faulkner is urging a radical overhaul of the relationship between the unions and the party. The war cry of B. A. Santamaria in the 1940s and ’50s, as he sought to purge communists from the ALP and install his own “Groupers”, still holds: “Whoever controls the unions controls the Labor Party.” Power should be taken away from the factional powerbrokers and their delegates and handed back to rank-and-file members. Union influence over preselections should be significantly reduced, if not eliminated.
But recent Labor conferences at the state and federal level don’t inspire confidence there is any real appetite for serious change. Apart from clinging to power, the Labor Right fears its pragmatic “mainstream” approach would be swamped by the more ideological Left. Indeed, this was on show in the Rudd reforms that led to the direct election by party members of the parliamentary leader after the 2013 defeat. The largely factionally controlled caucus checkmated the grassroots support for the Left’s Anthony Albanese.
Albanese backs the Faulkner push. “The Labor Party needs to go through a process of reform,” he says. “It needs to have more engagement with the community and be more responsive.”
Labor leader Bill Shorten is claiming some success already, after a reform speech he gave in April. “I said we need to be a member-based party not a faction-based party. Since I spoke, another 10,000 people have joined the Labor Party.”
But dampening enthusiasm for radical reform, potentially very bloody along the way, is the performance of the ALP in the opinion polls since the election. Despite Australian military personnel now “at war” in the Middle East, and the associated uptick for the government, Labor still leads in all the published polls.
Not even the appearance of former prime minister Julia Gillard at the unions inquiry dented the opposition in the way that perhaps Tony Abbott was hoping. Voters can smell a political witch-hunt and this could explain the lack of enthusiasm. The fact that John Howard has expressed negative views about going after defeated political opponents also feeds into this sentiment.
Yet Brandis is unrepentant: “I agree with what Mr Howard said, but the point I’d make to you is that this is not about politics, this is about the criminal law and the compliance by important and powerful institutions in our society and economy with the law.”
While Labor has to grapple with the challenge or opportunity the extended probe into its union comrades presents, the government has to recover from the battering it has received since the bungled budget strategy. And here, Abbott isn’t helping. He set a booby trap during the week that may blow up just when voters are weighing up his government’s economic credentials in 2016.
After three years of relentless attacks on Labor for spending the nation into a fiscal Armageddon, the prime minister brushed aside any concerns over how he would fund the $500 million-a-year Iraq deployment: “We think we can afford it.” He put his answer in the context of a $400 billion a year budget. That’s the one showing we’re heading for a projected $30 billion deficit, which is expected to blow out substantially in the mid-year review.
Incredulous reporters asked whether he could rule out tax increases to pay for Australia’s contribution to the conflict. Without blinking, Abbott said, “Yes, I can.”
He continued: “This is a government which believes in lower taxes, not higher taxes. We will pay what we must to do our duty by our country and by the wider world.”
That cut right across the bows of Finance Minister Mathias Cormann, who began the week keeping the government’s options wide open when he was asked on Sky News’s Agenda if this would include tax increases: “I am not in a position to give you an indication one way or the other, except to say that we are looking right across the board for ways and means to deal with additional expenditure and any impact on savings from slower passage of various measures.”
The finance minister, like his colleague the treasurer, spent the week none too subtly trying to reposition the government in the face of deteriorating revenues. Reminiscent of Labor treasurer Wayne Swan, whom he mercilessly attacked for getting his forecasts wrong, Joe Hockey warned his projections would be substantially revised because of faltering world growth and falling commodity prices.
Labor has no doubt Abbott’s adamant assurances about what he would and would not do in government have played a substantial part in the shredding of the electorate’s trust. You can’t get much clearer than this, in 2011: “I absolutely guarantee to the Australian people, absolutely guarantee to the Australian people, that the tax burden will be less under a Coalition government.”
The Essential Poll this week found the electorate has significantly hardened its view of the budget’s most controversial reforms. Making young people wait six months for the dole, for instance, is now opposed 52 per cent to 38 per cent. The Medicare co-payment, the so-called “doctor’s tax”, 66 per cent to 27 per cent, is another example. So it makes a lot of tactical sense to embark on a credibility repair job while there’s time.
Shorten was able to effectively query whether the prime minister was telling the truth when he ruled out raising tax. The budget, he said, demonstrated Abbott had “form” when it came to tax increases.
The Liberals made much of Swan’s failure to deliver a budget surplus. Not even the global financial crisis was a valid excuse. Abbott and Hockey taunted Labor over it in parliament last week. They are staying with their promise to get the budget back into balance the year after the next election. The credibility of that will depend on how the budget and the economy are travelling by 2016. And the traps Abbott is setting for himself now are much bigger than anything Brandis’s royal commission is likely to find.
This article was first published in the print edition of The Saturday Paper on Oct 11, 2014 as "Out of commission". Subscribe here.