Union boss appointed to $15b government fund board without checks

7 hours ago 3

Prime Minister Anthony Albanese’s $15 billion fund to boost domestic manufacturing approved funding without finalising its strategy, did not obtain conflict of interest declarations from all suppliers and has a union boss on its board who received the role without due diligence checks.

The Australian National Audit Office’s review of the National Reconstruction Fund Corporation found that since its establishment in September 2023, the organisation had mostly functioned effectively, but one board appointment stood out.

It concluded that the appointment of Australian Manufacturing Workers’ Union president Glenn Thompson in October 2023 by then-industry minister Ed Husic did not have the checks that every other board member underwent before joining the fund.

The report casts doubt on federal Labor’s commitment to ending the practice of handing political allies plum government appointments, after Finance Minister Katy Gallagher announced a review in 2023 to end “jobs for mates” culture.

When the fund was created in 2023, Husic boasted it would have an “independent board making decisions in the national interest.”

“We are making a clean break from what you saw out of the Coalition, using grants driven by political interest,” Husic said.

The audit office said the design of the NRFC was “largely effective” but noted there were opportunities to improve the fund’s governance and strategies. It found the board was “yet to develop a financial strategy” as of March 31 this year, and had other plans in draft format.

“A draft investment strategy and stakeholder engagement framework limit the effectiveness of the NFRC Board’s fund promotion activities to achieve the performance measures it has set to deliver NRFC’s performance outcomes,” the report stated.

The fund had also failed to obtain conflict of interest declarations and confidentiality agreements from suppliers.

Before the audit, the fund required conflict of interest declarations for its staff and board and since the review has extended that to suppliers.

“ANAO has recommended that we also require such declarations for external experts used as part of due diligence processes. NRFC has accepted that recommendation. No conflict of this kind was identified by the audit,” a spokesperson for the fund said.

Board members were found to have been appointed appropriately, except that “due diligence checks were not documented for one member appointed to the NRFC Board in October 2023”, referring to Thompson. There is no suggestion that Thompson is not qualified for the role. He was contacted for comment.

The fund itself does not make board appointments, the Department of Industry, Science and Resources makes them.

Husic announced Thompson’s appointment in October 2023. The long-time unionist had previously been on the boards of Cbus, the Coal Mining Industry Corporation and the Construction Industry and Property Services Industry Skills Council.

Former assistant national secretary of the Australian Manufacturing Workers Union Glenn Thompson.

Coalition spokesman for industry Alex Hawke said there were “serious concerns” about the auditor-general’s findings.

“I have requested an urgent briefing from the auditor-general and will formally raise these issues when parliament resumes,” he said.

Upon the release of the audit, the fund agreed with and began to implement all recommended changes. A spokesperson said the organisation welcomed the findings.

“Some of the areas identified for improvement have already been addressed, and others are currently being addressed,” they said.

“While it is important to make sure we are continuously improving in these areas, as an organisation we are focused on delivering impactful investments on behalf of all Australians. We are on track to meet our investment targets and are getting on with the job.”

Husic’s successor as industry minister, Tim Ayres, a former official with the same union as Thompson, defended his former colleague’s appointment.

“Mr Thompson has experience that has been recognised by both sides of government,” a spokesperson for Ayres said. “Appointments will be made throughout the life of the corporation to suit the needs of the NRFC and their functions. A well-balanced board with the right expertise is vital to ensuring that the NRFC can successfully fulfil its investment mandate.”