Fourth of eight -Response to PwC – Tax Practitioners Board registration review
The CFMEU can’tfix itself – just ask the banks, casinos and PwC
If union and Labor
leaders really want to win back trust in the CFMEU, only an independent and
transparent inquiry into the union will do.
Jul 17, 2024
n the Hayne royal commission’s public hearings were in full swing, Australian Council of Trade Unions secretary Sally McManus wrote to the chief executives of union-backed industry super funds to demand they review their commercial ties to financial institutions.
“The retirement savings of working
people should not be used to prop organisations that house rotten, corrupt and
unethical behaviours like those revealed over the past weeks at the banking
royal commission,” she thundered, declaring herself appalled by the “outrageous
and illegal behaviour” revealed in the hearings.
Renovation rescue: CFMEU national
secretary Zach Smith says the union is best placed to clean up its mess. David Rowe
Union leaders are often quick to pounce on corporate scandals. From the
banks, to the casino giants Crown Resorts and The Star Entertainment Group, and
PwC and Qantas, corporate Australia’s missteps have been far too frequent in
the past decade.
But as McManus and other union
leaders attempt to navigate the scandal engulfing the CFMEU and the wider Labor
movement, they would do well to remember one of the big lessons from this
string of scandals: trying to fix yourself never works.
CFMEU national secretary Zach
Smith again insisted on Tuesday there
was no need for an independent inquiry or further
government intervention to root out what Victorian Premier Jacinta Allen
described as a “rotten culture” within the union.
“The union
movement is more than capable of dealing with allegations in their own ranks
and responding appropriately,” Smith told ABC Radio.
Now, where have we heard that
before?
In 2014, Commonwealth Bank’s
insurance division conducted an internal review of allegations concerning
declined life insurance claims. Over the next few years, CBA would lose its
CEO, face a governance review by the prudential regulator, and ultimately play
a starring role at the banking royal commission.
In July 2019, Crown Resorts tried to
bat away allegations about its conduct by insisting it had regularly reviewed
the junket operators who brought Asian VIPs to gamble at its casinos. Over the next few years, two
royal commissions and two government inquiries proved beyond any doubt those
same junkets were backed by criminal gangs – and everyone in the sector knew
it.
PwC had conducted internal reviews
of its culture, accountability and decision-making (including in 2018 and 2021)
before its tax leaks scandal broke in early 2023. The Australian business then conducted an
independent review by former Telstra boss Ziggy Switkowski, but this
failed to prevent a string of parliamentary probes. An internal view conducted
by PwC’s global parent has controversially not been made public.
In all of these cases, the internal
reviews – whether independent or not – badly failed to meet the community’s
expectations for the sort of rigorous and transparent probe that these scandals
deserved.
It’s not about whether an
organisation is capable of reviewing itself or not. When a scandal is as deep
as the CFMEU is facing, with multiple examples of criminals penetrating the
union’s ranks, marking your own homework is simply not going to cut it.
To paraphrase McManus’ spray at the
banks from six years ago, we have clear instances of “outrageous and illegal
behaviour” that demand thorough and transparent investigation.
Late on Tuesday, reports emerged
that the federal government would put the CFMEU under external administration.
But there are no guarantees that will provide the investigation the public
deserves.
James Packer was rightly forced to
explain his actions as a Crown director in front of several public inquiries,
and Crown ultimately had to blow itself up to save itself.
It’s hard to understand why the
CFMEU is any different. If Smith, McManus and other Labor leaders really want
to restore faith in the CFMEU, they should be willing to see former Victorian
CFMEU secretary John Setka face the same scrutiny Packer did.
