5th National Whistleblowing Symposium keynote speech and Q&A, Sydney

Subjects: review of whistleblower legislation Just to remind everyone, Dr Daniel Mulino is the Assistant Treasurer and Minister for Financial Services for Australia. And he’s also the minister responsible for Treasury [inaudible] workshops this afternoon. Thank you so much, Dr Mulino.

I’ll let you take it from here. Daniel Mulino: Thank you very much. And, look, I hope you only took the good bits out of the bio and not the more troubling bits.

But thank you in anticipation. But, look, can I begin by acknowledging the traditional owners of the land on which we meet and pay my respects to elders past, present and emerging. And can I just acknowledge all of the very important organisations that are helping to bring this symposium together.

And I also acknowledge all of the people in the room who have been whistleblowers and just to acknowledge the courage that it took to do that and the important positive impacts that that has had. I just want to say that to start with by saying that whistleblowing is obviously very important to market integrity and public trust and that whistleblowers play a critical role in holding organisations to account, in uncovering misconduct and wrongdoing that in many cases may have otherwise have gone undetected.

And we see this frequently in the public realm. We’ve obvious seen this very recently with the public hearings in relation to KPMG that came to light in large part because of a whistleblower. And that is a set of issues that are squarely in my portfolio.

So whistleblowing obviously occurs right throughout the community and many sectors, many areas, but I’m very conscious in my own portfolio as to how important it is. Can I say that, again, I want to stress how important the role of individuals is here, but also it’s very important to think about the pathways that they go through when they do undertake whistleblowing.

And I want to, again, acknowledge the bravery of people who undertake that very important activity. I’ve met with a number of whistleblowers as part of the conduct of the review that we’re currently undertaking, and that’s been very insightful for me, and I’m very grateful to them for having made the time to meet with me to explain each of their individual stories, the challenges that they experience and, in many cases, continue to experience.

Can I also acknowledge the many organisations that operate in this space. And, again, I always worry about listing organisations because I’m concerned that I might miss important ones. Transparency International Australia, the Governance Institute of Australia, the Human Rights Law Centre, Griffith University – all of those organisations have been reaching out to me over a long period of time in relation to these issues and certainly as part of this review.

So I’d like to acknowledge the work of all of those organisations. And then, of course, there are many experts in this field, and the review that we’re undertaking at the moment will require a lot of expert input because – of course – as we think about strengthening protections and changing incentives, the legal changes often require considerable finetuning to ensure that you get things right.

I’d like to focus my remarks today on Australia’s tax and corporate whistleblowing frameworks, which are within my portfolio. But, of course, I do want to acknowledge that there are whistleblowing arrangements much more broadly across the community. And I just want to stress that I work very closely with the Attorney‑General on these matters more broadly.

And we are very keen to ensure that the work that each of us does dovetails with each other. I want to firstly look at the purpose of the review that’s currently underway, then I’ll touch on some of the emerging themes, albeit that the review is midway through, and then clarify some of the next steps. So in terms of this review, part of the context is that parliament passed legislation in 2019 which did 2 significant things: firstly, it consolidated the corporate and financial sector whistleblowing regimes into a single framework in the Corporations Act, and that was important to provide more alignment and clarity.

And, second, it introduced a new tax whistleblowing regime in the Tax Administration Act. So these reforms aim to broaden protections and coverage, to increase consistency across sectors and to encourage the disclosure of misconduct while protecting whistleblowers. That legislation also required a review of both the tax and the corporate whistleblowing regimes, and that’s what we’re undertaking at the moment.

I think that was an important step forward, but this review now allows us to pose the question as to whether the whistleblowing arrangements in the tax and corporations areas are still fit for purpose and whether they need to be strengthened. And, of course, this does matter, as I said at the right start. It matters because whistleblowing is so critical in many contexts for ensuring compliance and governance and ensuring that organisations are held to account.

The review is considering whether the current arrangements are working effectively to provide sufficient protection to whistleblowers, whether there are ways we should consider greater encouragement or incentive for disclosures and ways in which the whistleblowing arrangements support compliance with tax and corporate laws. Some of the main elements that are currently under consideration include the scope and coverage of protections and what kinds of actions are protected, access to remedies and justice, the way in which these arrangements are administered, incentives and barriers to disclosure and looking at incentive arrangements in other jurisdictions, and the interaction with other regimes.

So we are currently inviting written submissions. Treasury has undertaken a very extensive consultation process. We’ve sought views from a wide range of stakeholders as part of this process, including whistleblowers themselves, of course, and I expect to receive a number of submissions from whistleblowers.

And as I’ve said, I’ve met with a number of whistleblowers, and that has been a very useful part of this consultation process. We are also engaging in depth with advocacy groups, with legal experts. We are, of course, engaging in an iterative way with regulators such as ASIC and also with industry.

So, I want to thank, again, the whistleblowers who are a part of this process and all of the advocacy groups. It has already been a very constructive process. What has stood out to me in terms of themes, firstly, is the complexity of arrangements.

It’s a regime which probably won’t be able to be completely simplified in a totally straightforward way, but one thing that strikes me for individuals who have gone down often quite lengthy and fraught processes is the complexity that they face and the uncertainty on a number of fronts. Another thing is the potential gaps in legal protections from whistleblowers, and through the review we’re looking at where there might be gaps.

Another element which has struck me – and this isn’t necessarily something that can be easily addressed in legislation – is the importance of culture. Obviously, there is at the heart of whistleblowing action generally a misconduct, a failure to comply. But I think one of the things that struck me from a number of the engagements with whistleblowers is the importance of the culture of organisations in how they deal with people who have undertaken whistleblowing, but also in many cases the culture of organisations in how they might accommodate people after the actions that have been undertaken have resolved themselves.

And these issues of culture are very important. And, again, I don’t want to over simplify that and suggest that a piece of legislation can resolve all of that, but that certainly has been something that has come through in the discussions that I’ve had with whistleblowers. And, of course, there are also issues of culture with regulators and the way that they enforce laws and administer laws.

I think that side of things is something which is certainly we’re thinking through. The other one is balancing some of the different policy goals. There can be policy trade‑offs in frameworks like this, and that’s one of the issues that we’ll have to deal with.

And then finally areas of support for whistleblowers and one of the areas that has been raised is incentives, obviously. That’s something we’re looking closely at and we’ve had some direct representations from whistleblowers and advocacy organisations on those matters. We’ve seen a lot of examples of whistleblowing in recent years which can help to inform what we’re looking at, at the moment.

This includes whistleblowing in the public sector framework under the Public Interest Disclosure Act and also, of course, under the Corporations Act, which is very much within the realm of what we’re looking at. The courts obviously play a critical role in this. They are often required to determine whether a disclosure qualifies for protection and are required to assess claims of detriment, victimisation and obviously make decisions in relation to compensation.

The Human Rights Law Centre’s The Cost of Courage , a report in 2023, mentioned that in 3 decades since the first whistleblower protection laws was enacted in Australia just one Australian whistleblower has received court‑ordered compensation under these laws for the detriment they suffered. So that’s obviously an important piece of context. The ability of whistleblowers to access justice and retribution for retaliation against them is one of the key issues that Treasury is looking at as part of this review.

Obviously, another piece of context is the fact that there’s been so much attention to accounting, auditing and consulting firms and their behaviour over recent years. And I just wanted to flag that we have also in parallel with this issued a discussion paper in relation to a number of areas of governance in that sector in particular. And I did want to highlight the role of the joint standing committee and the work of Senator O’Neill when it comes to that particular sector but also, again, to repeat the fact that the actions of a whistleblower were so central to those ongoing inquiries.

I think that that inquiry does point and reinforce the importance of whistleblowing. In terms of where we’re heading from here, the Treasury consultation paper, which is a detailed piece of work, is open for 8 weeks, which is, I think, a reflection of the complexity of the issues that we’re talking about. Consultation remains open until July 29.

Following that consultation period, Treasury will consolidate all of the views and obviously with their own analysis provide me with a written report, and according to the requirements of the review I will then table that report in parliament. I think it’s within 15 days of having received it. Ultimately this is about a strong set of protections for whistleblowers and a sound framework that supports the early detection of wrongdoing, that reduces regulatory and enforcement costs, that strengthens market integrity and fairness, and that makes sure that a set of actions that have been demonstrated in recent times to be incredibly important in the health of our financial services sector and our tax system receive due protection.

Again, I just finally want to stress that we also have to undertake our review and undertake actions in this specific sector, in light of some of the other considerations in the work of the Attorney‑General and whistleblowing protections more generally. So thank you very much for having me here today. It’s very timely.

This is a review that is front and centre for me at the moment, and I’m very keen to hear your thoughts now but also to hear the results of this symposium conveyed to me as part of my broader consideration. So, thank you. Thank you.

Thank you so much, Dr Mulino. That was truly interesting. Now we want to open the floor to questions very quickly so we get the full 15 minutes.

I’m just going to sneak a couple in before we allow everyone else. And just to start, I was curious, you were talking about that there’s a legislative piece to this. Like, you yourself have noticed that culture towards whistleblowers within firms within our culture, plays a big part in this as well.

And I was just wondering, what do you think the government can do specifically to shift that culture? I think I don’t want to oversimplify this, but I simply want to flag that the immediate task here in a sense is to look at whether or not the regulatory arrangements need to be strengthened. But it did strike me from talking to a number of whistleblowers across both the tax and corporate realms that in addition to having a strong regulatory environment the attitudes of the entities which are being held to account is critical.

And their openness to information being brought to them, whether it’s directly by a whistleblower or whether it’s through another party, like a regulator, their openness to hearing that message and not being unduly resistant is obviously a key part of this. And I think that having a society where whistleblowing is respected and where the benefits of whistleblowing are understood I think will improve the overarching culture when it comes to organisations understanding that they should be open to dealing with that kind of information, with the exposure of actions that were wrong.

I think it can often make things worse, without wanting to state the obvious, when an organisation’s instinctive knee‑jerk reaction is to defend at all costs using every avenue. And so, I think that as part of the journey that we’re on, the regulatory journey, I do think that will hopefully tend to improve that broader culture and that organisations will see it as better to, in a sense, acknowledge the information that has been brought to bear, acknowledge where wrongdoings have occurred and embrace the opportunity to improve.

And then in terms of the individual pathway of the whistleblower, sometimes they may not want to, for example, return to employment in the organisation. But certainly, having talked to a range of people, sometimes they will want to. And, again, part of the culture I think is that what we want is for organisations to have an appropriate acknowledgement that if somebody has blown the whistle on actions and, in effect, improved the organisation by bringing to light activity that wasn’t appropriate, that all that should be done appropriately to bring that person back into the organisation should be done.

And one of the aspects of what’s made it difficult for some people as far as I’ve seen is where organisations have either resisted future pathways of that person or allowed undermining that person to occur by, in a sense, not paying enough attention to those kinds of activities that can occur. And I’ll open up to questions, but just one more from me, which is: you spoke a little bit about the timeline that you were looking at that for that review to come to you and then for you to give it to parliament.

But once that review reports, what’s the realistic path and timeline to actually get to legislation? Yeah, I mean, look, this is one of the challenges of a portfolio which has an extremely full legislative agenda. So, look, I see this as a really important area.

Treasury, I think, constitutes something in the order of 25 per cent of the entire government’s legislative agenda. That can mean that it doesn’t – it’s not always straightforward to get things into the parliament. As a government, we also are facing drafting constraints, which is a reflection of a full agenda.

To some degree, it would also reflect the nature of the recommendations. If some of the recommendations highlight things that are of a more urgent nature that need to be fixed, that can sometimes result in things being dealt with more quickly. I certainly would want to act on these issues as a matter of priority.

I brought this discussion paper forward because of some of the issues that have occurred in the public realm. We’ve also put out a discussion paper in parallel, in a sense, in relation to a lot of the issues in audit and accounting in the KPMG space, which are different issues. But I suppose what it’s reflecting is there are a whole lot of interconnected issues that I’m certainly seeing as a priority.

So, I don’t want this area to drift, but I’m also – the reality is it’s very hard to put particular timelines on things. Right, well, let’s open up to some tougher questions from the experts in the room. If you want to ask a question, just pop your hand up and we’ll get a mic to you.

Hello, [inaudible]. My question is you talked about issues of organisational culture being obviously [inaudible] kind of strongly in the review. What is the plan to make organisations to do more to make this a stronger framework for whistleblowing So, I hear a lot of about protection of whistleblowers.

We know the last piece of regulation focused on, you know, stronger penalties and direct responses and so on. But if you look at [inaudible] around the world in this space, [inaudible] organisations to do things. What is the plan to [inaudible] to make organisations deal with this, and what does that look like?

Yeah, I mean, look, obviously we’re at a point where we’re receiving ideas. So, it’s too early for me to be definitive in terms of, you know, what we’re going to do in certain areas. I mean, I think that one of the areas that has been put to me is that we need much greater clarity as to what qualifies as a protected action.

That’s a kind of starting point, that sometimes organisations can end up creating disputes which can be long lasting and very difficult as to whether the action was protected. So that’s one aspect that I think would improve the overarching regime. I think that you’re right – there’s a set of issues around what are the obligations on organisations.

I think that that is a key area. I think that there’s also a set of issues around the regulator and their obligations. And there’s a set of issues around, I think, which organisations disclosures can be made to in order to receive protection.

You know, my understanding is that at the moment that’s an area that’s seen as having too much uncertainty but also they’re too narrow. Look, at the moment we’re receiving a wide range of ideas as to how the currently regime could be strengthened. And I think some of the issues that you’ve touched on are certainly in the mix.

Do we have some more questions? Dr Mulino. I’m Jeff Morris.

I was the [inaudible] whistleblower starting in 2008. I have 18 years experience in your portfolio area of living the whistleblower journey and [inaudible] I’m heartened by [inaudible] the regulator being a problem, because in the end I regard myself more as a whistleblower more than ASIC and all the banks. And as a whistleblower if the regulator [inaudible] complaint [inaudible] doesn’t do their job, then it’s all for nothing.

There’s a number of things that I would like to talk to you about, but they’re possibly best said in a private setting. And I’d just like to indicate I’m certainly [inaudible] Canberra and [inaudible]. I’ll be putting in a submission, so I’m happy to share my experience of the past 18 years.

Thank you. Yeah, no, thanks. Well, look, again, can I acknowledge what I can only imagine would have been a very difficult journey for you.

Well, what I’ll do, Jeff, is get your details and look, whether we meet in Canberra or maybe Melbourne or Sydney, let’s work out a time. I’ll obviously read your submission, but if at all possible, let’s try and set up a time and we can talk and in private as well. [inaudible] from the Uniting Church. Just with the government losing billions of dollars through fraud against the Commonwealth and in the US the rewards system [inaudible] demonstrated significant returns to government by having incentive reward schemes, are there any legitimate argument for not having a reward incentive scheme?

Yes, so, look, I think with incentives like that, I just want to make sure – look, it’s certainly part of our inquiry. And it’s explicitly referred to in the discussion paper. I would just preface by saying it’s not like I have any obvious arguments against it, but I just want to make sure that we step through all the potential unintended consequences.

With any kind of new arrangements like that, you just want to make sure that you think through all the different possible impacts. So it’s certainly something that’s in the mix. And it has come up in a number of discussions that I’ve had both with experts and with whistleblowers.

I suppose one aspect of it that occurs to me, and again, I say this acknowledging that we’re at a very preliminary stage and I just flag this as one consideration, if you were to go down the path of somehow having an incentive system based on the fact that in some instances the Commonwealth might directly benefit, for example, through a reduction in fraud or an increase in tax payments or whatever it might be, I think one would have to think through the fact that there are some areas of whistleblowing where there might be that link.

There might be other areas of whistleblowing which are also very worthwhile, also very difficult for the person undertaking the whistleblowing, but where there isn’t any kind of benefit to the Commonwealth. And so, one, I suppose, caution I would have or one consideration would be that you wouldn’t, I think, want to necessarily have a system where there’s big incentives for one type of whistleblowing and not for others.

Does that mean that you would have to consider some kind of pooling arrangement? You know, again, I’m just putting things out there that I think would be considerations. I think when you look at an isolated case when there’s a benefit to the Commonwealth, one can say, ‘Yeah, well, look, an incentive coming out of that benefit seems to make sense.’ One thing I think you would need to think through is how you try and achieve consistency and appropriate alignment across whistleblowing across a range of sectors, some of which won’t have that characteristic.

I’m going to have one more quick question, if someone’s got a quick one. Steve from Woodside. I’ve seen a casual reference to a whistleblower protection authority.

Is that part of the scope you have here? So, look, we’re not looking at that explicitly in terms of this current review. This review that I’m undertaking is really focused on the corps law and tax.

But I think it’s fair to say that more broadly, you know, when you look at whistleblowing more broadly across the full gamut, I think that is something that has been flagged. So, I wouldn’t want to exaggerate the likelihood of that being a key feature of this particular inquiry. But, as I said, I’m talking to the Attorney‑General.

I’ve certainly had a number of people flag with me the importance of that. It has been something that’s been flagged for quite a while now. So, look, I’ll talk to the Attorney‑General about that as part of our inquiry and see how that features in what she’s doing more broadly.

Wonderful. That’s probably all the time that we have. Thank you so much, Dr Mulino, for your time.