Trade union hypocrisy in decrying corporate tax minimisation

Sally McManus’s stirring Bolshevik call to arms at the National Press Club on March 29 decried the injustices of corporate tax minimisation schemes.

“Inequality in our country is the worst it has been for 70 years and 679 of our biggest corporations pay not one cent of tax,” the ACTU president said.

“We are here to fix the imbalance that has eroded people’s rights and wrongly empowers corporations, big business and the ­already wealthy.”

What McManus was really complaining about was how unfair it was that companies be ­allowed to do what unions have been doing for decades: pay no ­income tax.

The hypocrisy of the union ­argument is exposed by the wealth of key trade unions, which rivals that of some of the companies they disparagingly call the “big end of town”.

Yet there is no mention of the deepening gap between the prosperity of the unions and that of their members. Considering the perpetual decline in the number of members that McManus claims to represent, the question begging to be answered is how the combined asset wealth of the key trade unions has skyrocketed to $1.5 billion, with annual income now of $900 million, when members’ fees revenue has fallen for 30 years.

One explanation is the growing income provided from ­industry super funds and worker entitlement funds — aka union investment vehicles — which through exemptions for unions paying income tax by virtue of being registered organisations opened the sluice to rivers of gold.

The inescapable truth is the union movement can no longer be regarded in the same fashion it once was. It is less reliant on union membership as its source of fin­ancing as it is even less dependent on membership numbers for political influence.

A fairer description of the relationship between unions and the ALP is that the latter is now the political wing of the former rather than the unions being the industrial wing of the party.

The influence the union movement wields, not just over the ALP but through third-party campaigning on any number of social issues that may be of little interest to many of its members, now far exceeds and outweighs the number of workers it represents.

The perverse irony is that corporate Australia is helping to fund the increasing wealth of its enemy.

On the boards of various worker entitlement funds — operating without prudential regulation — are representatives of various corporates and industry groups. While the unions represented on the board receive the vast bulk of the income streams paid from these funds — determined at the discretion of the board — industry groups also receive a take. It’s a cosy relationship that might explain why the industry and business groups aren’t as vocal about it as other workplace issues.

Hypocrisy in this case is not confined to a lonely bed.

Industry groups happily accept this collusion but then go and complain to government that it isn’t doing enough about industrial relations reform.