Chapter 1 Introduction
Background to the review
On 28 March 2012 Fair Work Australia (FWA) completed its report into the
investigation of the National Office of the Health Services Union (HSU). The Report
of the Delegate to the General Manager of Fair Work Australia: Investigation
into the National Office of the Health Services Union under section 331 of the
Fair Work (Registered Organisations) Act 2009 will be referred to as the
A copy of the FWA report was provided to the Senate Standing Committee
on Education, Employment and Workplace Relations. On 7 May 2012 the Senate
committee published the report, excluding the annexures.
The FWA report examined the administration and expenditure of the HSU
National Office. In particular, the FWA report examined and made adverse
findings about Mr Craig Thomson MP, who was the National Secretary of the
HSU before being elected to the Federal Parliament in 2007.
Chapter 7 of the FWA report examined expenditure of National Office
funds for the purpose of assisting Mr Thomson’s election to parliament for the
seat of Dobell. Chapter 20 of the report detailed contraventions in relation to
matters raised in Chapter 7.
On 16 May 2012 the Australian Electoral Commission (AEC) responded to a
request from the Special Minister of State, the Hon Gary Gray AO MP. The
Electoral Commissioner noted in his letter that he had been asked to advise the
Special Minister of State on ‘whether or not there have been any failures to
comply with the provisions of the Commonwealth Electoral Act 1918
(Electoral Act) as disclosed by the information in the recently published Fair
Work Australia Report into the Health Services Union National Office’.
The AEC response included a 22 page document entitled Reporting
obligations under the Commonwealth Electoral Act 1918 and the Report of the
Delegate to the General Manager of Fair Work Australia (AEC analysis). It is
reproduced in Appendix B. The Electoral Commissioner stated:
In summary, the document concludes that most of the expenditure
described in the FWA report has been disclosed by relevant entities under the
Electoral Act, with queries surrounding four payments totalling $17 014.88.
In addition to responding to issues in the FWA report, the AEC also
provided a ‘list of matters’ for consideration. In his letter, the Electoral Commissioner
In relation to limitations contained in the Electoral Act
which have been highlighted by the circumstances of this matter,
Attachment B is an initial list of possible matters that could be
considered. The AEC notes that some of these matters have been considered
previously by the Joint Standing Committee on Electoral Matters without being
On 16 May 2012 the Special Minister of State referred the AEC analysis
of the FWA report and the ‘list of matters’ to the committee for its consideration.
The Special Minister of State’s letter of referral, the AEC’s letter to the
Minister and its ‘list of matters’ are in Appendix A.
This inquiry focuses on matters relating to political funding and
disclosure obligations, as defined by the Electoral Act, and the AEC analysis
of the FWA report.
FWA report on the HSU and AEC analysis
The FWA investigation into the HSU took more than three years to
complete and the report comprises over 1100 pages. Chapter 7 of the report covered
the following areas:
n the Dobell campaign;
n Ms Criselee Stevens;
n Coastal Voice;
n Mr Matthew Burke;
n Central Coast Rugby
n Dads in Education
Fathers Day Breakfast;
n Golden Years
n Central Coast Convoy
for Kids; and
n The requirements of
section 237 of Schedule 1 to the Workplace Relations Act 1996 in
relation to donations. This issue has not been reviewed by either the AEC or
The FWA report concluded that Mr Thomson expended $71 300.23
of HSU funds on the Dobell campaign. In relation to this
expenditure, the HSU stated:
Mr Thomson contravened Sub-rule 32(n) and Sub-rule 36(b) by
incurring and purporting to authorise each item of expenditure of National
Office funds listed in the table at paragraph 197 of chapter 7 totalling
$71,300.23 for a purpose which was not the business of the HSU in circumstances
where neither National Executive nor National Council had authorised the
spending of any monies in support of the campaign for Dobell (apart, possibly,
from monies which were specifically referable to the Dental Campaign) and none
of this expenditure was for, or for a purpose incidental to, the general administration
of the HSU.
On 21 May 2012 Mr Thomson made a statement in parliament responding to
the findings in the FWA report. In that statement Mr Thomson claimed that ‘since
these allegations were first raised I have consistently and on many occasions
made it clear that I have done nothing wrong’.
The AEC examined the FWA report against the overlay of the reporting and
disclosure obligations contained in the Electoral Act. In relation to the
$71 300.23, the AEC advised that it was seeking further information about
four items of expenditure which total $17 014.88.
The AEC drew attention to two key aspects of electoral law in its
analysis of HSU funds used in relation to Mr Thomson’s election to parliament.
First, is the question of whether Mr Thomson (or his candidate agent) ‘had an
actual disclosure obligation in relation to the items of expenditure that have
been identified in the FWA report, particularly those contained in Chapter 7’.
The AEC commented that ‘it should also be noted the Electoral Act does
not apply to the pre-selection of new candidates or expenditure that they have
incurred before they are actually endorsed by a registered political party’.
The AEC stated:
… as Mr Thomson was not a “candidate” in the 2007 election
until after he was endorsed by the ALP on 13 April 2007, the expenditure of HSU
National Office funds for the benefit of Mr Thomson that have been
identified by the FWA report which occurred before this date could not have
given rise to any donor reporting obligation under section 305A of the
Electoral Act as he was not a candidate in the election.
The second key point made by the AEC relates to the statute of
limitations for prosecution set out in the Electoral Act. Subsection 315(11) of
the Electoral Act provides that:
A prosecution in respect of an
offence against a provision of this section (being an offence committed on or
after the commencement of this subsection) may be started at any time within 3
years after the offence was committed.
The AEC stated:
As the three disclosure returns completed by Ms Jackson were
received by the AEC on 13 October 2009, the three year limitation period in
subsection 315(11) of the Electoral Act has not expired. However, in relation
to the return lodged by the candidate agent for Mr Thomson and the ALP NSW
Branch returns, the three year period to commence any prosecution has expired.
In its submission to the inquiry, the AEC has provided an addendum to
its analysis. The addendum contains an update on the four items of expenditure,
totalling $17 014.88. When considering the FWA report it was unclear to
the AEC whether these amounts had been disclosed by the ALP and HSU. Full
details are available in Annex 3 of the AEC’s submission, and in Appendix C of
The AEC found that the HSU had seemingly failed to report three items of
expenditure in the 2006-2007 and 2008-2009 returns. The AEC also noted that the
HSU had included other items in returns that ‘probably were not electoral
The AEC asserted that ‘the HSU National Office made reasonable attempts
to disclose all electoral expenditure that they were able to identify from the
incomplete records that were available to them in 2009’.
The AEC concluded that given the difficulties with availability and accuracy of
records, it has ‘been unable to identify any public interest that could result
in action being now initiated against the HSU National Secretary, Ms Kathy
Jackson, in relation to the apparent failure to fully disclose three items of
expenditure’. On 13 September 2012 the
AEC provided a further update to its analysis, following the review of additional
material. It is attached at Appendix F.
Objectives and scope of the inquiry
The committee’s objective was to examine the AEC analysis of the FWA
report and the 17 possible measures for improving the Electoral Act that were
contained in the list of matters provided by the AEC. Where deemed necessary,
the committee makes recommendations to strengthen parts of the Electoral Act,
particularly in relation to funding and disclosure requirements.
The FWA report covers a range of matters relating to requirements under
the Fair Work Australia (Registered Organisations) Act 2009 (RO Act).
This included, but was not limited to, disclosure obligations for donations and
political expenditure. The AEC analysis of the FWA report focused on who
incurred a reporting obligation under the Electoral Act and whether the
required expenditure was disclosed.
On 21 May 2012 the Member for Dobell, Mr Craig Thomson MP, made a
parliamentary statement responding to the findings in the FWA report.
In that statement Mr Thomson disputed some of the findings in the FWA report
and claimed that the Delegate who undertook the investigation was ‘selective
and biased’. In evidence to the
committee the Delegate denied this characterisation.
In the context of this inquiry it was not the role of the committee to
forensically examine internal HSU authorisation processes or adjudicate on these
matters. Any alleged contraventions against the Fair Work (Registered
Organisations) Act (RO Act) and rules, or suspected fraudulent behaviour,
are not matters for this committee. There are a number of other processes
underway to deal with those matters.
Conduct of the inquiry
On 16 May 2012 the Special Minister of State, the Hon Gary Gray AO MP, asked
the committee to review the AEC analysis of the FWA report and the ‘list of
matters’ for strengthening the Electoral Act.
On 23 May 2012 the Committee Chair, Mr Daryl Melham MP, issued a media
release to announce the inquiry and call for submissions. Six submissions and
three exhibits were received.
Public hearings were conducted in Melbourne on 3 July 2012 and in Canberra
on 6 and 16 July, and 22 August 2012. Witnesses are listed at Appendix E. Submissions
and transcripts of evidence are available from the committee’s website at: www.aph.gov.au/em.
Structure of the report
Chapter 2 examines the issues raised in Chapter 7 of the FWA report and
overlays this with the AEC analysis of each matter.
Chapter 3 examines the 17 possible measures proposed by the Electoral
Commissioner for addressing limitations in the Electoral Act. The committee’s previous
deliberations on certain matters are provided and recommendations made, where