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At age 6 George Washington told his father “Father I cannot tell a lie. It was I who chopped down the cherry tree”. This story is reputed to be mythical but has remained in American (and other) history as an example of the importance of leaders displaying honesty. Here in Australia are we awaiting such confessions – or, as questions continue to be asked by the Opposition, just more rebuttals about the cherry tree?

Meantime, what I have called “the announcements strategy” has continued. In an “annual” (since what year?) speech, Gillard reminded us about the performance of our troops in Afghanistan but also hinted that, except for special forces, they may be out by year end. A prelude to an election?

Minister Shorten has also been an active announcer with legislation introduced to give equal pay rises for 150,000 social and community service workers, to allow the FWA to establish its own “expert” advisory panel to select default super funds, and to establish two new vice-president positions in FWA. Another  prelude to an election?

Opposition MP Jamie Briggs has launched a savage attack on the Shorten VP legislation, although (surprisingly) it is reported the Opposition will not oppose it.

Des Moore
31 October 2012

Gillard again refuses to answer explicit slush fund questions

The Age, October 31, 2012, Mark Baker

Done: Julia Gillard says she has dealt with the matter already.

PRIME Minister Julia Gillard has refused for a second day to answer explicit questions about her role in helping set up a union slush fund her former boyfriend used to steal hundreds of thousands of dollars.

Ms Gillard again responded angrily to a question from Deputy Opposition Leader Julie Bishop about her work as a lawyer in 1992 establishing the Australian Workers Union Workplace Reform Association.

Ms Bishop had asked in question time why Ms Gillard - then a partner at law firm Slater & Gordon - had drafted terms for the incorporation of the association that claimed it was for training and workplace safety when she knew and had since publicly admitted it was a slush fund.

''I have asked why the PM made a false statement in this document, which I do wish to table, and she should answer that,'' she said.

Ms Gillard responded by quoting a report in Tuesday's Age in which some Liberal backbenchers advocated a change in opposition tactics to focus more on policy and less on muck-raking.

''I've dealt with these matters extensively on the public record and no amount of muck and filth from her, to the dismay of her Liberal colleagues, will change that simple fact,'' she said.

In rejecting leave for the incorporation document to be tabled, Labor Leader of the House, Anthony Albanese, said: ''No, the Deputy Leader can file it in their mud bucket.''

The Age revealed two weeks ago that the association was incorporated only after Ms Gillard wrote to the West Australian Corporate Affairs Commission vouching for its bona fides. Under WA law, such an association was not permitted to deliver financial benefits to its members or officials.

Ms Gillard said in late August that the association - which she set up without consulting her senior legal partners and without keeping normal records - had been established as a ''slush fund'' to finance union election campaigns.

WA fraud squad investigators later confirmed that more than $400,000 had been stolen from the association by Ms Gillard's former boyfriend, senior AWU official Bruce Wilson.

Ms Gillard broke off her relationship with Mr Wilson after the fraud was discovered in 1995 and has repeatedly denied she knew of any wrongdoing.

On Monday, Ms Gillard also refused to directly answer a question from Ms Bishop on whether she was aware when she assisted with registering the association that WA law prohibited such organisations providing ''personal profit or benefit to individuals''.

Ex-HSU boss Michael Williamson faces 28 new charges

Ean Higgins, The Australian, October 31, 2012

FORMER health services union boss Michael Williamson has been charged with 28 new offences including cheating and defrauding the union and dealing with the proceeds of crime.

Detective Superintendent Col Dyson told The Australian the charges involved an alleged $620,000 worth of allegedly defrauded money.

At a press conference outside Waverley local court this morning, Mr Dyson said that 27 charges of defrauding the union of money had been laid.

One additional charge concerned dealing with the proceeds of crime. Police allege Mr Williamson issued cheques totalling around $400,000 to his wife’s company, Canme, for invoices for services, when, police allege, no services were provided.

Mr Dyson said that if convicted, Mr Williamson faced a sentence of up to ten years in jail for cheating and defrauding the union, and 15 years for dealing with the proceeds of crime, which he said could be described as 'money laundering'.

The charge sheet tendered in court today said police allege Mr Williamson tried to recruit other people to assist in carrying out criminal activity in the form of hindering an investigation.

These people were his son Christopher, an executive associated with Mr Williamson’s information technology company United Edge, Brad Bird, and the principals of a graphic design company, John Gilleland and Carron Gilleland.

Outside the court, Mr Williamson's lawyer, Vivian Evans declined to comment. Prior to being charged with allegedly hindering a police investigation and making false financial statements to union members, Mr Williamson strenuously denied the allegations against him and any wrongdoing.

Mr Dyson said he now expected that more people would be charged in coming weeks and months, including former senior staff of the now dismantled HSU East.

He said there would be at least one other charge relating to the original charges against Mr Williamson of hindering a police investigation.

At least two people were expected to be charged, he said, in relation to defrauding money from the union.

Difficult days ahead in Afghan withdrawal

The Age, October 31, 2012

Australia is ramping up its preparations for withdrawal from Afghanistan after a decade of costly war but the Prime Minister, Julia Gillard, has acknowledged there remain "difficult days ahead".

In an annual speech to Parliament about Australia's role in the Afghan war, which has seen 39 Australian soldiers killed and more than $10 billion spent, Ms Gillard said this year had been an important one in Australia's efforts in the war-wracked country.
"Our commitment to Afghanistan is in Australia's national interest. We are there to deny international terrorism a safe haven, to stand firm with our ally the United States," she said in Parliament on Wednesday.

She also revealed that the military will have to commit extra resources and troops over the next year to help as part of Australia's gradual withdrawal from the southern province of Oruzgan.

"It is likely that we will identify the need for some additional personnel and resources to complete these final phases of practical extraction and repatriation," she said.

As Fairfax reported this month, Australia's combat role in Afghanistan will be all but over in a matter of months, as ADF troops pull back from the province's patrol and forward operation bases to the main military base, Tarin Kowt.

That is expected to occur by the end of the year. After that only the special forces — rotations of about 300 SAS and commandos — will continue combat operations. A quick reaction force based in Tarin Kowt and comprised of a few dozen soldiers will also remain combat-ready.

Ms Gillard also sought to assuage public commentary here and abroad that the US-led war in Afghanistan is increasingly turning into an undignified rush for the door.

"Our progress . . . should give Australians cause for measured confidence and resolve. We are part of a sound international strategy: transition to Afghan-led security, the support to Afghanistan for development and peace."
She also acknowledged that while there had been progress in Orzugan and across Afghanistan, the situation was not "perfect".

"We know this – I know this – and our plans reflect this," she said.

"Throughout the three years of the new international strategy, the international coalition and the Afghan government have held a very realistic view of the evolving environment and changes in the nature of the insurgent threat."

Ms Gillard's comments are a far cry from the optimistic expectations outlined in the heady days following the successful 2001 campaign which unseated the Taliban government in three months.

In December 2001, the international community gathered in Bonn to discuss the future of the newly democratic Afghanistan.

One of the main aims of the so-called Bonn Agreement was "the establishment of a broad-based, gender-sensitive, multi-ethnic and fully representative government in Kabul".

The agreement also said the international community was determined "to end the tragic conflict in Afghanistan and promote national reconciliation, lasting peace, stability and respect for human rights in the country."

While progress has been made since then, the US-led war has also been criticised for allowing the war in Iraq to divert attention and resources — in turn allowing the Taliban to undertake a remarkable military reformation — and failing to ensure a cohesive state.

Earlier this month the outgoing head of the International Committee of the Red Cross in Afghanistan, Reto Stocker, painted a particularly bleak picture.
"I am filled with concern as I leave this country," he said. "Since I arrived here in 2005, local armed groups have proliferated, civilians have been caught between not just one but multiple front lines, and it has become increasingly difficult for ordinary Afghans, particularly out in the rural areas, to obtain health care when injured or sick."

A report by the International Crisis Group, released on the same day, also said action had to be taken to prevent the Afghan state "sliding towards collapse".

In a response to Ms Gillard's speech this morning, the Opposition leader, Tony Abbott, also gave a far from optimistic assessment of the war in Afghanistan.

"Assessments are mixed about whether the Afghan security forces will be ready to cope with taking on prime security responsibility after 2014. There is no certainty that hard-won gains can be held," he told Parliament.
"After we've expended so much blood and treasure for so long, it's fair enough for Australians to ask why more hasn't been achieved."

However, he said Australia should remain committed to the war, because to do otherwise could be a mistake with serious consequences.

"We must count the cost of our continued commitment but we must also count the cost of prematurely abandoning that mission," he said.

"Should the international coalition's mission fail or end too soon, there is a strong risk that Afghanistan would once again descend into feudalism and once again become a base for international terrorism."

Australia provides a yearly average of about 1550 military personnel to the 100,000 strong coalition force and has spent about $10 billion on the war since 2001.

Blow to retail funds as Bill Shorten cements IR umpire's super powers

David Crowe, National affairs editor, The Australian, October 31, 2012

LABOR will entrench the power of the industrial relations umpire to decide who controls $10 billion in annual retirement savings in a devastating blow to retail superannuation funds seeking to open the regime to full competition.

Financial Services Minister Bill Shorten rejected key findings by the Productivity Commission late yesterday to unveil reforms that back the approach sought by the ACTU and the industry super funds that are backed by unions.

The rapid move, just weeks after the commission's final recommendations on the subject, is aimed at legislating Labor's preferred approach as quickly as possible in the hope a future Coalition government would be unable to impose a more open regime.

At stake is access to billions of dollars in employer and employee super contributions under industrial relations awards that generally favour industry funds, creating a lucrative flow of cash that Opposition Leader Tony Abbott has attacked as a "gravy train" for union leaders.

Fair Work Australia has the power to name the funds set as default options in the awards covering millions of employees, giving the funds control of the cash if workers do not select an alternative.

While the Productivity Commission recommended that Fair Work Australia hand this power to an independent expert panel, Mr Shorten announced instead yesterday that the final selection would remain with the umpire's full bench of commissioners.

Retail fund managers including AMP, BT, Colonial First State and MLC pressed for a more open regime in which any fund could be named as a default option as long as it met the federal government's basic MySuper standard for a low-cost fund.

The group representing retail funds, the Financial Services Council, wanted to cut the industrial umpire out of the process altogether so that employers could select any fund provided staff were no worse off.

The ACTU and Industry Super Network were adamant super contributions were an employee's deferred wages and had to be overseen by the IR umpire.

While an expert panel will have a role in the new process, it will offer advice rather than make the final decision on default options.

Mr Shorten said the approach taken in a new bill introduced yesterday would create a "strong and stable" safety net for workers.

Coalition financial services spokesman Mathias Cormann said the Minister had put a stop to genuine competition in order to help the union movement.

"There is absolutely no reason why every product which qualifies as a MySuper product should not be able to compete freely in the default fund market," Senator Cormann said.

Opposition Critique of FWA

Workplace Express report, 31 Oct 2012

Opposition backbencher Jamie Briggs has questioned Fair Work Australia President Justice Iain Ross's impartiality and claimed the federal government's motive in seeking to fast-track its proposed Fair Work Act amendments was to appoint Maurice Blackburn's Josh Bornstein and former ACTU secretary Jeff Lawrence to the new vice presidents positions the bill would create, ahead of a possible change of government next year.

In an extraordinary speech - protected by parliamentary privilege - during the second reading debate on Workplace Relations Minister Bill Shorten's Fair Work Amendment Bill 2012, Briggs - an IR advisor to former Prime Minister John Howard when Work Choices was introduced - also maintained that Justice Ross had "sidelined" current FWA Vice Presidents Michael Lawler and Graeme Watson.

And, he continued, the two new vice president positions the bill would create were more senior than the existing ones, with the Minister's intention to give more work to those who had "similar views" to "the current president and the current government".

Briggs maintained that both Justice Ross and the ALP had "some issues" with Vice President Lawler, the partner of HSU national secretary Kathy Jackson, and that he had been "completely sidelined - is far from busy, as I understand".

Vice President Watson, meanwhile, had committed "two sins" that Justice Ross - a former ACTU assistant secretary - was "not pleased with".

The first was that he came from Freehills, which mostly represented employers.

The second was that he had the "temerity" to suggest following the "scandal" attached to the FWA's HSU investigation that the tribunal's name should be changed.

"And you know what? The President of Fair Work Australia wasn't very happy" (see Related Article).

He continued that Vice President Watson had since "regretted" giving that speech, "regretted, because professionally he is, how could we describe it, underutilised at this point in time".

"So you've got two vice presidents who are there, not particularly busy, sure they're not flavour of the month with the current president. Then a piece of legislation comes up in this parliament out of nowhere" and "you have to wonder why".

"And then you look at the bill. The bill empowers the two new vice presidents to be more powerful than the current two sitting vice presidents."

And, he said, it gave the president more power when it came to allocating work among tribunal members.

He continued that under the bill, parties - such as the CFMEU - would be able to appeal to the President to have a full bench case if they were unhappy with the tribunal member allocated to their matter.

"Wacko. Guess what you've just done. You've given two vice presidents who just might come from a similar background to which you want with new powers for the president to allocate cases to them."

"This is what this is about. This is being debated urgently because this minister is trying to future-proof Fair Work Australia."

He said he "charged" Shorten with abuse of parliament to "give curry to his vested interest in the Australian industrial relations environment to the union movement".

"It's a disgrace," he said.

Briggs maintained that with a salary of "at least" $350,000 plus two associates and a car, each appointment would cost $1 million a year, or $8m over the forward estimates for both.
"That's an $8m decision made on the basis of no evidence at all," he said.

Shorten introduced his legislation late yesterday and it was listed for debate this morning, meaning the Opposition had less than 24 hours to consider it (see Related Article).

Briggs said he was made aware of some of the matters he raised "with the assistance of outside parties".

However, despite the Opposition's criticisms, backbencher Sussan Ley earlier told parliament the Coalition was unlikely to oppose the bill, but would seek to have it referred to a senate committee for inquiry.
Who's Briggs?
A spokesperson for Justice Ross, asked by Workplace Express if he wanted to respond to Briggs's speech, said the president had "never heard of Jamie Briggs".

Justice Ross said that legislation was a "matter for parliament and appointments are a matter for the government".
Be careful, warns Bandt

Greens workplace relations spokesperson Adam Bandt spoke after Briggs during today's debate, and said members of parliament should be careful "especially when people outside have the status of a judge of the Federal Court of Australia, of not overstepping the mark and suggesting, as one could interpret the previous members' comments, that the current head of Fair Work Australia would not act appropriately".

"I think that's a more serious charge that the one [Briggs] sought to level and that should not be made from this place using privileges that attach to debate that goes on in this chamber. That would be a misuse of those privileges."

The bill at the centre of the debate delivers on the Minister's October 15 announcement that he would legislate about a third of the review panel's recommendations plus create two new vice-president positions in the tribunal and a mechanism to deal with complaints against FWA members - which the bill does by giving the tribunal President sweeping new powers to manage its members

The bill also provides for an expert tribunal panel to assess which superannuation funds are to be award default funds, with a full bench of the tribunal to have the final say.

CFMEU uses drug charity funds for “safety”

AFR 31 October 2012, Mathew Dunckley, Mark Skulley and Claire Stewart

The main construction union used a clause in funding arrangements for a drug and alcohol charity to raise up to $1 million for union activities.

The NSW division of the Construction, Forestry, Mining and Energy Union (CFMEU) has run a rehabilitation facility in Sydney, Foundation House, since 2000, in partnership with the building industry.

Most of the foundation’s board, a mixture of industry and union representatives, quit late last year over the diversion of funds they believed were earmarked for drug and alcohol programs. At least $500,000 and maybe more than $1 million raised through a workplace levy on employees and employers was transferred to unspecified CFMEU “safety initiatives”.

The scheme was run by the union’s former state secretary, Andrew Ferguson, the brother of federal MPs Laurie and Martin Ferguson.

The union has a reputation for tough industrial tactics. Leigh Johns, the head of the Fair Work Building & Construction agency, wrote this week in The Australian Financial Review the industry needed to stand up to “the CFMEU’s continuing culture of coercion”.

The board members who quit the charity included Master Builders NSW executive director Brian Seidler, prominent activist and widow of NSW judge Bob Bellear, Kaye ­Bellear, Bovis Lend Lease executive Colin Huntley and Australian Manufacturing Workers Union organiser Greg Cummings.

“I resigned because I believed that all the money from the [enterprise bargaining agreements] was coming to support Foundation House and I discovered it wasn’t,” Ms Bellear told The Australian Financial Review.

“When the board asked for the money to be returned to Foundation House, it wasn’t. So I resigned.”

Ms Bellear said she was a life-long supporter of the union movement but quit the board because she believed funds due to the charity were inappropriately diverted.

Mr Ferguson did not return calls.

Prime Minister Julia Gillard and ACTU secretary Dave Oliver vowed to take a tough line on the use of union members’ funds following the Health Services Union scandal.

Ms Gillard attended, along with Treasurer Wayne Swan, the CFMEU’s annual ball in the Great Hall of Parliament in Canberra on October 10.

The Rozelle-based charity, known as the Construction Industry Drug & Alcohol Foundation Treatment Centre, was funded through mandatory contributions of $2 a week per employee to help people with drug, alcohol and gambling addictions.

CFMEU NSW state secretary Brian Parker denied there was any mishandling of funds collected through the industrial levies and pointed out he had reshaped the system established by Mr Ferguson, his predecessor.
“I’m saying very very clearly that at the end of the day there is nothing illegal, nothing immoral and nothing wrong with what has happened here,” he said.

Mr Seidler said the Master Builders Association was rebuffed after demanding an explanation from the union of where funds were spent.

“There are companies out there who have a large number of employees that want answers about where the money has gone,” he said.

Mr Seidler conceded a clause in the workplace agreement covering the donations did allow for spending on safety but companies had believed their money was going towards rehabilitation.

“It was always understood that money collected in industrial agreements in the building and construction industry relating to the drug and alcohol foundation would go to the drug and alcohol foundation,” he said.
Another construction industry source said the treatment of the funds was a “slap in the face”.

“Here you have got the industry thinking they are contributing to an organisation that helps people with addiction and some of the money is finding its way to the CFMEU to have organisers go out to their jobs and kick the crap out of them,” one source said.

‘I wasn’t prepared to put my integrity on the line’

Another former foundation board member, Anthony Sobb, who is chief executive at the Fairfield RSL, a one-time major donor to Foundation House, said he quit in early in 2011 when his demands for a forensic audit were blocked.

“I wasn’t prepared to put my integrity on the line,” he said.

Mr Brian Parker, the CFMEU state secretary, said the disagreement was created by a misunderstanding of the enterprise agreements which explicitly referred to safety programs.

Mr Parker said the arrangement, which saw half the money go to safety and not to Foundation House was changed in January.

Now all the levied funds go to the charity, he said. Mr Parker said the change was motivated by the foundation’s need for funds.

He said long-serving members of the board of the foundation should have been aware of the arrangements.
“People are maybe ducking for cover, they were on the board, they knew exactly where it was going to. There is a possibility that they walked because they weren’t too happy that they missed issues on the board,” he said.
He said if board members were concerned about transparency, that was a matter for them and he was satisfied the union’s money had been used properly.

Mr Parker said he was not aware that a request for a forensic audit was blocked and denied the board had ever demanded the return of a large quantity of money.

It is understood the board grew concerned when Foundation House came under financial pressure and its income was below what board members believed was collected.

“There was no money. In disgust, the board resigned en masse,” said a source.

Union sources say unrest over Foundation House has been growing in recent months.

The ACTU national executive will receive a final report in early December from a review headed by a former Federal Court judge, Rod Madgwick, about governance in the union movement. The panel will recommend improvements in financial transparency, risk management and managing conflicts of interests.

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