Abetz promises slush-fund crackdown

The federal opposition has promised a crackdown on union slush funds if it is elected, with new rules around greater disclosure.

It comes after Fairfax Media revealed details of a current fund linked to the Australian Workers Union.

Opposition workplace relations spokesman Senator Eric Abetz said it was "completely unacceptable" for the then deputy Prime Minister Julia Gillard to have delivered a speech at the first fund-raiser for the Industry 2020 fund in 2008.

AWU Victorian secretary Cesar Melhem reluctantly went public on Tuesday to confirm that a non-profit company he runs, Industry 2020, had raised about $500,000 since 2008 to support the political activities of his Right faction sub-group within the ALP.

Notable among those activities was a "significant" outlay of funds on the bitter HSU election in 2009.

As workplace relations minister in August 2008, Prime Minister Julia Gillard was a guest speaker at the inaugural fund-raising lunch for the Industry 2020 fund at Flemington racecourse, which generated about $250,000, with nearly half that profit. Fairfax Media does not suggest Ms Gillard knew how the money raised at the event would be spent. Senator Abetz said Ms Gillard should have known what the money was being raised for.

"Excuse me deputy Prime Ministers don't go to functions without knowing who the organisers are and ultimately what the money is going to be used for," he said. "I have no doubt either her office is greatly incompetent or she knew exactly what she was doing."

Ms Gillard's office stressed that her 2008 address was published at the time and remained on a government website. "Questions about the organisation of the function, including the raising and disbursement of any funds, should be directed to the function organisers," it said.

Senator Abetz said the current rules around disclosure on unions had failed. "I believe that union bosses should be required to fully disclose to their membership everything they do in that regard," he said. "You cannot use your authority as a trade union boss to raise money in a separate entity for your own political purposes to get yourself re-elected but to also get your mates re-elected."

"One wonders on what basis all the employers were at this fund-raiser with the benign title of Industry 2020. Were people made aware that the money to be raised at the function would be siphoned off for the Health Services Union, I'd doubt it."

Senator Abetz said Labor was "fully immersed in this culture of slush funds" and were paralysed in responding to it.

"The revelation that some of this AWU slush fund was being used as an HSU slush fund or to fund HSU elections in 2009 when the HSU scandal was already swirling around is just unbelievable."

The 2008 lunch, booked in the name of the AWU, was attended by about 600 employers, union officials and MPs, including current Workplace Relations Minister, Bill Shorten. Two other fund-raisers have been held for Industry 2020, including a small event at Melbourne's Greek Museum in Melbourne last year attended by Mr Shorten.

Asked if the contributors to such events knew how the funds were to be spent - for example, on other unions' elections - Mr Melhem said he thought probably not. "Maybe I should disclose that next time."

He said he did not believe AWU national secretary Paul Howes, Ms Gillard or Mr Shorten were aware of how the funds raised by Industry 2020 would be spent. Mr Melhem said he had formally registered the fund with the ASIC. "People are not committing a crime here."

Mr Shorten issued a short statement: "The Minister believes that any fundraising and campaigning for parliamentary, union or other democratic elections should be conducted transparently and in accordance with the law and any applicable rules of the relevant organisation."

Mr Howes defended speaking at a recent fund-raiser at Zinc at Federation Square for Industry 2020. He said he believed the fundraiser was for Mr Melhem's re-election. "The reality in contested election campaigns, incumbent officials have to raise funds to seek re-election."

Mr Howes has been a vocal critic of the corruption at the HSU and earlier this year said union officials had nothing to fear "from more transparency, from being more open and ensuring we act diligently."

Asked about the transparency of Mr Melhem's fund he directed questions to the Victorian secretary.

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