The Scandal That Just Won't Die


The union movement owes Australia’s minority government a considerable debt.

Not many will see it like that, so let me explain. If Labor enjoyed a strong majority on the floor of the House of Representatives, the revelations of impropriety and possible white-collar crime at an obscure trade union would be of comparatively little public interest.

But Julia Gillard is Prime Minister by dent of only two votes in Parliament. As a result, after 2010, the deeds or misdeeds of a backbencher named Craig Thomson, a former official at the Health Services Union, suddenly acquired an outsized significance. If Thomson were forced from Parliament by resignation or criminal conviction, it is very possible Julia Gillard’s government might fall.

As a result, the goings-on inside the Health Services Union have been exhaustively scrutinised. For a long time, for instance, we’ve known that a Health Services Union credit card was used to pay for visits to escort agencies. We’ve known the HSU was riven by internal conflict and that its financial controls were, to say the least, alarmingly lax. There were threats of libel against investigating journalists and threats of a more concerning nature against former HSU official Kathy Jackson, who has been vocal in her criticism of her former union colleagues.

Inevitably, the Opposition got involved. Queensland Senator George Brandis, the Opposition’s sharpest legal mind, has taken a special interest in the case and has been assiduously following the various twists and turns. A former barrister, Brandis has shown a dogged determination to keep the scandal alive, pursuing it through Senate committee work as well as in the media and through letters of complaint to police. Should Thomson eventually fall, it will be Brandis to whom Tony Abbott and the Opposition will owe thanks

Since 2009, the HSU has been under investigation by the relevant federal body, Fair Work Australia. Yesterday it delivered the results: an 1100 page report which is presumably highly critical of the HSU and its financial management.

Unfortunately, the report has not been released. Even so, it appears likely to be hugely damaging to Thomson and the Gillard government. At any rate, we know that it was handed to the Commonwealth Director of Public Prosecutions and details 181 breaches of workplace laws and internal HSU regulations.

Now, the Commonwealth DPP must decide whether to proceed with criminal investigations against HSU officials named in the report, one of whom we imagine is Thomson. As of late yesterday, the DPP was citing legal advice to say it didn’t have to, given that the report is not a brief of evidence. Despite taking three years and costing a million dollars, the Fair Work investigation as not in the nature of a criminal investigation. As such, "Fair Work Australia has not conducted a criminal investigation" and "the material forwarded is not a brief of evidence".

Does that mean Thomson is off the hook? Not necessarily. A brief of evidence could still be worked up and the DPP could still proceed if and when such a brief arrives. And even if he escapes any criminal proceedings, there is still the court of public opinion, which an be expected to take an increasingly dim view of this distasteful affair.

The Australian Council of Trade Unions is not waiting any longer. It’s decided to suspend the HSU from membership of the ACTU, pending an investigation into whether it should be kicked out altogether. "The union movement has zero tolerance for corruption or misuse of members’ funds, and is committed to transparency and democracy," the ACTU’s Jeff Lawrence said yesterday, adding that "the issues facing the union are so substantial that we believe strong action must be taken."

There’s no doubt that the HSU imbroglio is a bad look for unions in general. The HSU mainly serves hospital cleaners and other low-income workers, who appear to have had their union fees treated in cavalier fashion by the people supposedly representing them in the workplace. With union memberships in long-term decline across Australian society, the movement has been fighting hard to prove its relevance in a time of casualised labour and rapid economic change. Unions need to work harder than ever to win and keep members. The last thing the labour movement needs is a notorious scandal like this.

Nor is the scandal helping Julia Gillard’s cause. The government’s studious disinterest in the Fair Work investigation has been an impressive effort, but the continued pretence that it doesn’t have to comment about the alleged crimes and misdemeanours of a key backbencher is starting to wear thin. Sleaze never looks pretty, and the tortuous investigations have had the effect of a slow drip of bad news. Given how unpopular this government is, that’s no help to Labor’s rapidly diminishing re-election prospects.

It must be said, of course, that Thomson has always denied any wrong-doing and that no charges have ever been laid. If the eventual report of Fair Work Australia contains nothing devastating about Thomson personally, he may be able to claim that he’s been cleared. Releasing the report may even help his cause in this respect, removing as it would any hint of a cover-up.

And, at least so far, there is no smoking gun. The Thomson affair will therefore rumble on. While it does so, it will continue to inflict low-level damage to Labor’s brand, without bringing down the government, which in any case now has an extra number on the floor in the wake of the clever move last year that brought Peter Slipper to the Speaker’s chair.

In any case, the government has bigger problems just now — like how to find the extra billions it needs to deliver a budget surplus this year. Once hoped to be a political triumph, the prospect of a budget surplus now seems like a millstone around the government’s neck, with many business figures and economists calling for the pledge to be abandoned, and the government faced with huge new spending cuts to keep the bottom line in the black.

That clean air the government keeps hoping for may never eventuate.

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