AUSTRALIA is ranked equal ninth with Canada on the Corruption Perceptions Index published by Transparency International. That ranking will no doubt be in for a bit of a hiding as the Royal Commission into unions gets underway.
The previous year (2012) Australia was equal eighth, so we are already falling.
New Zealand is equal first with Denmark — but then New Zealand’s national hero is Edmund Hilary and ours in Ned Kelly.
The Royal Commission has been described as a politicised witch-hunt. It has been likened to McCarthyism — the burning of reputations by Senator Joe McCarthy in the US in the 1950s as he hunted out communists in the US Government, Hollywood, the unions and anywhere he could find them, accusing them of “un-American activities”.
The similarities are that Royal Commissions, like the McCarthy hearings, are usually great public spectacles and that the inspiration for this Royal Commission (like the McCarthy hearings) was political.
The public spectacle and political inspiration go hand in hand. The Coalition Government will take great joy in the political embarrassment caused by the very public uncovering of misdeeds of officials of unions connected to the Labor Party.
But there the similarities end. Those who make the comparison are exaggerating and off the mark.
In the US the inquirer/inquisitor was a politician and the offences were not standard criminal law offences. In Australia, the inquirer – former High Court Justice Dyson Heydon – is obviously not a politician. And the offences he is inquiring into are standard criminal-law offences – particularly bribery.
It is not the first time a federal government has launched a Royal Commission into union or labour malfeasance.
The first was in 1909 into “industrial troubles on Melbourne wharfs”. It was followed in the 1920s into “pillaging of ship cargoes”. Then we had the commission into the Painters and Dockers Union in 1980-84 and one into the BLF in 1981-82. Other inquiries also touched on the malfeasance of organised labour.
Australia appears to have a chronic history of union malfeasance. And Royal Commissions have been a common way to get to the bottom of it – about half of the 132 federal Royal Commissions since federation.
Opposition Leader Bill Shorten’s argument that the matters should be dealt with by police, does not wash. Without wide coercive powers to question and search, police have not been very successful.
Moreover, police can only pursue individual cases and only after being presented with evidence of reasonable suspicion. The systemic problems remain unchecked.
But sometimes Royal Commissions uncover stuff that the commissioning government would have preferred to remain uncovered. My guess is that the latest one might well be like this.
Every bribe received was paid by someone – and both payment and receipt are criminal.
Dyson Heydon may well be a political conservative, but he is first and foremost a lawyer.
In some ways, the Painters and Dockers Royal Commission backfired on the Fraser Coalition Government.
Like Prime Minister Tory Abbott, Malcolm Fraser wanted to expose the malfeasance of unions, particularly exposing rorts on the waterfront that were costing Australia dearly.
And there were rorts. Manning scales dictated a certain number of employees were required, even if the job could be done easily with fewer people. The union created dummy people and divided their wages. Then some bright spark thought it would be a good idea to do tax returns for these dummies and get tax returns.
Artificial tax identities were created.
Those identities were very useful for tax-avoidance schemes, particularly the bottom-of-the-harbour schemes where assets and accumulated assets were stripped from companies before tax was due and the company sold to dummy identities.
The Royal Commission uncovered bank account transactions for millions of dollars.
So the commission – set up with the political aim of exposing evil, corrupt unionists — also uncovered widespread tax rorting by the big end of town.
It seems quite likely that the new Royal Commission will find that not only did unionists receive bribes, but also that big construction companies paid them.
It may well be that the bribes were paid in ways that might not stick in a criminal court – training “fees” and the like – but who knows what Heydon might uncover.
Most likely the construction companies will say they paid because that was the only way to get a project built. It will be the same excuse that AWB and the Reserve-Bank-owned Note Printing Australia gave — we can’t do business unless we bribe.
The trouble with this is that it builds a culture of corruption. The costs get past on to all of us. Left unchecked, the culture of corruption can cause a dysfunctional economy, dashed opportunity and poverty.
That’s why people should not worry too much about Abbott obvious political grandstanding and welcome this Royal Commission.
As the chair of Transparency International, Huguette Labelle, said, “It is time to stop those who get away with acts of corruption. The legal loopholes and lack of political will in government facilitate both domestic and cross-border corruption, and call for our intensified efforts to combat the impunity of the corrupt.”
No doubt Australia will fall on the Perception of Corruption Index in the short-term, but if we are seen to do something about it and show that corruption is not tolerated we might creep back up the index to be alongside New Zealand and the Nordic countries.
CRISPIN HULL
This article first appeared in The Canberra Times on 15 February 2014.
How about a permanent ICAC style federal agency? It would be cheaper than many royal commissions, be truly independant, and be bale to investigate and prosecute in real time.
Imagine how many less kids would have been abused by charities and churches if we had a ICAC.