Vol. 7, No. 5
SUMMARY
The trade union movement and the Labor Party are open about their close relationship and it is well known. The nature and extent of the relationship of the union movement with the Federal Labor Government is less well known.
Features of the relationship include:
- A strong, often decisive, influence on Government policies, one important effect of which is to prevent or delay economic reform.
- Grants by the Federal Government to the union movement of $92 million over the terms of the Hawke and Keating Governments, and now running at around $16 million per year.
- The tax-free status not only of contributions to unions (as to employer organisations) but also of income from property owned by unions. (Unlike the grants, this is not a recently-granted privilege).
- In total, taxpayers could now be underwriting, in various ways, activities of the union movement to the tune of $130-140 million per year.
- Financial and other assistance provided to the Labor Party by the union movement.
- Appointments of unionists to government bodies which, on the face of things, exceed those that are justified.
Trade union membership is now down to 35 per cent of the workforce, and only 26 per cent of the private sector workforce; the time has long passed when unions could claim to represent even a majority of workers. There is certainly no longer any case for unions or their members to receive privileged treatment by the Government, if there ever was such a case.
Privileged relationships between governments of any political stripe and particular sections of the Australian community are inappropriate. Central elements of the relationship between the union movement and the Labor Government -- when assessed against broad national interest criteria -- cross the bounds of acceptability, accountability and even propriety in some cases. This is a matter which involves issues which are of national interest and concern.
INTRODUCTION
The trade union movement plays a special role in the Federal Labor Party and the present Federal Labor Government. This special role gives it unprecedented influence and power as well as access to government financial assistance.
Yet the membership of trade unions is declining -- since 1990 by almost 500,000 to around 2.5 million in 1994. (1) With the workforce now approaching 9 million (including 750,000 unemployed), the right of the union movement to claim to speak even for the majority of the workforce has long since ceased to exist. Further, if unions were not given such a privileged position, and were not permitted to enforce compulsory unionism in some areas, there is no doubt that membership would be much lower than it is.
This paper examines the extensive and tightknit relationships between the current Federal Labor Government, the Australian Labor Party, and the trade union movement. It questions the appropriateness of the relationships which have developed in many areas. In particular, it examines the role of grants and donations between these parties, the influence exercised by intertwined appointments and by the unions' dominant role within the ALP, and just how the Australian taxpayer is footing the bill for financial arrangements which can scarcely be seen as in the national interest.
It should be emphasised at the outset that the issue being raised in this paper is not that the trade union movement has an association with the Labor Government (and the Australian Labor Party), and vice versa. It is, rather, the appropriateness of that Government having such a close association with an outside (non-elected) organisation and whether that outside organisation has an undue influence on Government policy, and receives undue support from the Government. The same issue would arise were a Liberal-National Government to have an unduly close association with a business group or groups, and to provide undue support to such group or groups.
BACKGROUND
It is a matter of history that the Australian Labor Party (ALP), formed just over 100 years ago, was created as the political arm of the trade unions. Union leaders felt that one of the most effective ways to pursue their -- predominantly industrial -- agenda was through a formal role in the political system. Hence the Australian Labor Party was created as the entrée card of the unions into the various Parliaments of the land.
The Labor Party contested the first election for the new Federal Parliament in 1901, and the first Federal Labor Government came to power in 1908 under the leadership of Andrew Fischer. Although short-lived, lasting only 6 months and 21 days, it set a precedent for future union-sponsored Federal Labor governments.
The ALP became the main left-of-centre/socialist party in the Australian polity, in much the same fashion as its United Kingdom inspiration, the British Labour Party.
The Labor Party has continued to be the political wing of the trade union movement. To this day, unions dominate the ALP's policy decision-making bodies and preselections. While some moves have been made to reduce the extent of union influence at ALP Conferences, the Labor Party has taken less action than its UK counterpart to establish itself as a genuinely broad-based party.
Of course, the parliamentary party and the Labor Government itself have their own decision-making processes. Even there, however, the unions have been able to exercise a very substantial, if not in the end always decisive, influence on the Government's policy in relation to (for example) the waterfront, privatisation of the airports, airlines, Commonwealth Bank, Telecom (no privatisation), ANL, and industrial relations, where they wield enormous influence. There is little doubt that, through its opposition to productivity-enhancing reforms and its attempts to protect existing jobs at the expense of potential new ones, the union movement has been and remains the biggest obstacle to economic reform in Australia.
An example of this capacity to determine policy was the unions' success, after the 1993 election, in forcing Prime Minister Keating and Industrial Relations Minister Brereton into a humiliating backdown on industrial relations reform. The unions insisted, instead, on the Industrial Relations Reform Act, containing employment-inhibiting unfair dismissal provisions and a union right to intervene in all non-union enterprise agreements in a way that can provide an effective veto, and thereby making the labour market less flexible.
The unions have also pressured the Government to introduce changes in economic and social policies, such as the compulsory employer-funded Superannuation Guarantee Charge (SGC), the (now suspended) Training Levy, and the maternity allowance contained in the 1995 Budget. The Superannuation Guarantee arrangements have effectively required employers to fund a national superannuation scheme via a de facto payroll tax -- but the Government has avoided the odium of imposing a payroll tax itself.
The introduction of the SGC has led to the establishment of industry superannuation funds, with union representatives constituting half the board trustees. These funds, which now cover about 30 per cent of all members of superannuation funds and hold about 4 per cent of total superannuation assets of about $190 billion, provide the union movement with the potential to influence the investment policy of funds in ways which could create difficulties for individual firms in an industry. To date, no such problems have emerged, and such action would necessarily be constrained by other trustees and by the professional advisers who administer each fund, as well as by prudential requirements. Even so, the concern remains.
The Accord -- now about to enter its eighth incarnation and the centrepiece of the Labor Government's wages policy -- is an extraordinary example of the influence which a group outside Parliament has been able to exert on a range of Government economic and social policies. Particularly during the 1980s, the effect of the Accord was to inhibit industrial relations and other microeconomic reforms. It was also a central part of the most interventionist macroeconomic policy ever pursued in Australia -- a policy which, during the 1980s, gave Australia an inflation rate twice the OECD average, the highest current account deficit in the OECD, and culminated in an enormous blow-out in foreign debt, prolonged recession and record high unemployment. (2)
In announcing the new Accord on 1 May 1995, a joint statement by the Prime Minister, Mr Keating, and the ACTU said: "Today the ACTU and the Government reaffirmed their Accord partnership and their joint pursuit of progressive economic, social and industrial relations reform". Reinforcing the closeness of their relationship -- but also, perhaps unwittingly, highlighting the unjustified nature of the claim that this relationship necessarily represents the interests of the workforce as a whole -- they added: "Partnerships between governments and the representatives of workers, and the substantial benefits that they deliver, should not be taken for granted. What has been achieved over the last twelve years would not have come about under the Federal Coalition. Future gains in the social wage, and fair and orderly transitions to more efficient working environments, would not be possible under the Federal Coalition". Needless to say, no mention was made of the role of business, or of investors generally, in providing employment opportunities and in ensuring the investment without which neither the normal nor the social wage would be forthcoming.
The union influence on Labor Governments is not simply a matter of influence currently exerted from the outside; Labor Governments are also a favoured career path of many former unionists. Indeed, it is almost a natural progression from the union bureaucracy into the political party in some cases. Prime Minister Keating and his predecessor Bob Hawke were both union men. Current Ministers who emanate from unions include Treasurer Willis, Industry Minister Cook, and Employment Minister Crean, all from the Australian Council of Trade Unions (ACTU), plus Trade Minister McMullan who was a Labor Party and union official, and Parliamentary Secretaries Sherry, O'Keefe, Snowdon, and Bevis.
ACTU President Martin Ferguson's brother, Laurie, is a NSW Federal MP. Newly-elected NSW Senators, Belinda Neil (3) and Michael Forshaw, and the Victorian ALP's preselected candidate to replace the late Olive Zakharov, Ms Jacinta Collins, have had careers with the Federated Ironworkers, Australian Workers Union (AWU-FIME), and the Shop, Distributive and Allied Employees Association, unions respectively.
Ms Jennie George, the ACTU assistant secretary, was also preselected for a winnable position on the Victorian ALP's Senate ticket for the next election. However, in May she announced her withdrawal from the ticket so that she could concentrate further on her work for the trade union movement. Leading unionist Mr George Campbell, who is a vice-president of the ACTU and national secretary of the powerful AMWU, was once accused by Mr Keating of having the jobs of 100,000 workers "around his neck" after Mr Campbell's (then) union instigated an employment-destroying wages surge in the early 1980s. Despite this, he has been publicly supported by Prime Minister Keating for an ALP Senate ticket and reports suggest that he is likely to obtain endorsement for a safe position on that ticket.
The foregoing are only a handful of the union-trained Labor Federal politicians. The majority of Labor members of Federal Parliament are current union members (see Attachment A). Moreover, the staff at offices of Federal Labor Ministers and MPs are reportedly "required" to join the ALP if they are not already paid up members.
There is a symbiotic relationship between the unions and the ALP. Success in the ALP, it would seem, is advanced by one's union affiliation. This is not, in itself, necessarily a bad thing. But it becomes a bad thing if one sub-set of the community is given preferred access to the favours of Government and is able to exert undue influence on public policy.
GRANTS
The most obvious aspect of the relationship between the trade unions and the Federal Labor Government is the substantial financial assistance provided, each to the other. This is also the most visible element from the taxpayers' perspective. The Federal Government provides significant grants to trade unions, while trade unions provide significant donations and subscriptions to the ALP. A Federal Labor Government brings a lot of money into unions' coffers.
Over the life of the Hawke and Keating Labor Governments, the trade unions have received a very handsome $92 million in grant funding. Table 1 (below), which outlines all the grants paid to trade unions over the life of this Labor Government, brings out the significant increase in grants over this period. Annual funding has, in fact, risen by a massive 800 per cent over 12 years.
In 1993-94 (the last available full-year figures), (4) the Keating Labor Government handed over $16.5 million of taxpayer-funded grants to the trade union movement for one reason or another. This is the highest amount to date to be handed over in one year.
In 1992-93 (an election year), the unions received $14 million. In the same year, unions donated $2.2 million (5) to the ALP's re-election campaign.
This is not the full extent of Commonwealth financial support. Unions also receive $10 million per annum from the Department of Industrial Relations to run the Trade Union Training Authority, and the Australian Electoral Commission (AEC) provides its services -- worth millions of dollars -- for union ballots free of cost. In 1993-94, the AEC carried out 590 union elections and amalgamation ballots, at a cost of $4.8 million.
Taking account of the tax free status of union income and the value of tax deductions for contributions to unions (see below), it seems likely that taxpayers are now underwriting the activities of the union movement to the tune of $130-140 million per annum.
As Table 1 shows, grant funding to unions is provided through a number of Commonwealth departments. The extent and level of funding is quite extraordinary.
The grants are provided for a wide variety of purposes, but always the stated purpose is legitimate public policy goals. These include: grants for musicians-in-residence; grants to fund the "yes" case in union amalgamations; grants for input into government decision-making processes; money for advising migrant workers of the value of trade unions and their industrial relations rights; support for overseas aid programs -- through the ACTU's overseas aid body Australian People for Health, Education and Development Abroad (APHEDA); and grants for developing workplace bargaining arrangements, and health and safety guidelines.
Table 2 (below) provides a list of the major union recipients of grants in the last financial year, 1993-94. The largest benefactors were: the ACTU ($2,065,000); APHEDA ($2,078,000); the Construction, Forestry, Mining & Energy Union ($1,141,000); the Maritime Union ($548,000), the Textile Clothing and Footwear Union ($565,000) and various teachers' unions ($4,852,389). In all, 25 unions each received in excess of $100,000 for the period.
So who do the unions represent that could possibly justify this enormous amount of public funding?
As noted, ABS (6) data show that financial trade union members are now down to 2.5 million, or about 35 per cent of Australia's 6,525,800 employees aged 15 and over in August 1994. (7) These members are drawn from both the blue and white collar sectors of the economy, although in recent times the former has declined and the latter held steady. Union membership in the private sector has fallen to a mere 26 per cent. The total figures are boosted by the public sector, with its relatively high levels of union membership (62 per cent). Total union membership has fallen by over 8 percentage points since 1986, and is at a record post-Second World War low.
Table 1: Payments To Trade Unions By The Labor Government ($'000) (8)
| Dept | 83-84 | 84-65 | 85-86 | 86-87 | 87-88 | 86-89 | 89-90 | 90-91 | 91-92 | 92-93 | 93-94 | 94-95 | Total |
| DAA | - | - | 12 | 70 | 10 | - | - | - | - | - | - | 108 | 200 |
| DAG | - | - | - | - | - | - | - | - | - | 9 | 8 | - | 17 |
| DASETT | 335 | 663 | 78 | 1,737 | 1,011 | 496 | 436 | 340 | 497 | 1,739 | 75 | - | 7,407 |
| DAAS | - | - | - | - | - | - | - | - | - | - | 522 | - | 522 |
| DHHCS | 63 | 63 | 122 | - | 116 | 43 | 351 | 348 | 797 | 710 | 342 | 329 | 3,284 |
| DEET | 1,411 | 535 | 622 | 282 | 365 | 711 | 518 | 631 | 1,110 | 2,470 | 8,212 | 2,360 | 19,227 |
| DFAT | 26 | 2O | 28 | 12 | - | - | 47 | 34 | 43 | 61 | 58 | 20 | 349 |
| AIDAB | 180 | 159 | 469 | 301 | 726 | 2,197 | 2,863 | 4,253 | 2,638 | 2,473 | 2,610 | - | 18,869 |
| D1LGEA | 210 | 354 | 447 | 570 | 514 | 730 | 693 | 74 | - | 108 | - | - | 3,700 |
| DIR | 143 | 975 | 1,845 | 1,404 | 890 | 1,165 | 1,972 | 4,244 | 4,811 | 4,749 | 3,923 | 6,473 | 32,594 |
| DITAC | - | - | - | - | 122 | - | - | 255 | 94 | 660 | 133 | 126 | 1,390 |
| DPI&E | - | - | - | 21 | 183 | 47 | 64 | 166 | 106 | 112 | - | - | 699 |
| DPM&C | - | 45 | 45 | 47 | 1,053 | 18 | 18 | 31 | 48 | 86 | 6 | 91 | 1,488 |
| DT&C | - | - | - | - | - | - | - | 113 | 15O | 150 | 581 | - | 994 |
| ATO | - | - | - | - | - | - | - | - | - | 540 | 521 | 507 | 1,568 |
| Treasury | - | - | - | - | - | - | - | - | - | 3 | 3 | - | 6 |
| Finance | - | - | - | - | - | - | - | - | - | - | 22 | - | 22 |
| TOTAL | 2,368 | 2,814 | 3,668 | 4,444 | 4,990 | 5,407 | 6,962 | 10,489 | 10,294 | 14,392 | 16,494 | 10,014 | 92,336 |
Commonwealth Department Codes:
DAA = Aboriginal Affaire (now ATSIC)
DAG = Attorney-Generals
DASETT = Arts, Sport, Environment, Tourism & Territories (now Environment, Sport & Territories)
DAAS = Administrative Services (for 1992-93 includes Arts)
DHHCS = Health, Housing & Community Servlces {from 1992-93 includes Local Government)
DEET = Employment, Education & Training
DFAT = Foreign Affairs & Trade
AIDAB = Australian International Development Assistance Bureau
DILGEA = Immigration, Local Government & Ethnic Affairs (now Immigration & Ethnic Affairs)
DIR = Industrial Relations
DITAC = Industry, Technology & Commerce
DPI&E = Primary Industries & Energy
DPM&C = Prime Minister & Cabinet
DT&C = Transport & Communications {now separate depts; Communications now with Arts)
ATO = Australian Taxation Office
* = incomplete/partial year
The appropriateness of this extensive grant funding can be assessed by dividing the grants into two categories.
Table 2: Major Recipients Of Grants -- 1993-94 (9)
| ($) |
| ACTU | 2,065,012 |
| Media Entertainment & Arts Alliance | 121,000 |
| APHEDA | 2,077,959 |
| Commonwealth Trade Union Council (via ACTU) | 104,000 |
| Union Research Centre on Organisation & Technology (URCOT) | 507,899 |
| Community & Public Sector Union | 47,761 |
| State Public Services Federation | 30,242 |
| Tasmanian Trades & Labour Council | 468,350 |
| Melbourne Workers Theatre | 191,436 |
| Northern Territory Trades & Labour Council | 397,445 |
| United Trades & Labour Council (SA) | 217,494 |
| Auto, Food, Metals & Engineering Union | 483,596 |
| Construction, Forestry, Mining & Energy Union | 1,141,289 |
| Liquor, Hospitality & Misc Workers Union | 525,465 |
| Textile Clothing & Footwear Union | 565,516 |
| Metal Trades Federation of Unions (NSW) | 223,873 |
| Australian Workers Union | 278,200 |
| Union of Christmas Island Workers | 55,360 |
| Health Services Union | 267,172 |
| Maritime Union | 548,000 |
| Fed Industrial Manufacturing & Engineering Union | 73,274 |
| Trades & Labour Council of WA | 227,436 |
| NSW Trades & Labour Council | 101,111 |
| Geelong Trades Hall Council | 67,070 |
| Victorian Trades Hall Council | 130,428 |
| Shop Distributive & Allied Employees | 129,369 |
| Aust Services Union | 317,043 |
| Education Union | 280,000 |
| National Union of Workers | 50,000 |
| Nursing Federation | 20,000 |
| Trades & Labour Council of Old | 56,387 |
| Disabled Workers Union | 49,692 |
| Secondary Principals Association | 141,100 |
| Teaching Council | 1,315,000 |
| Various other teachers associations & federations | 3,116,289 |
There are those grants which go to the unions for purposes which relate to the core of the unions' own internal arrangements and representative responsibilities to their members. Grants that fit into this category include those to assist with workplace bargaining arrangements or amalgamation campaigns. Other Australian institutions generally pay for the services they provide to their members out of members' subscriptions.
There are also those grants that are going to trade unions for purposes which are not directly related to their role, function or responsibilities, but are, rather, a new-found way for the Labor Government to provide funding that enlarges the role and influence of the union movement with the stated aim of pursuing legitimate public ends. Examples of these kinds of grants are those which are designated for overseas aid projects or arts and cultural funds. Why should a trade union receive public money to fund an artist or musician in residence? If a union, or a company for that matter, wishes to have an artist-in-residence, that is surely a matter for its members/stakeholders, not for the taxpayer.
More generally, it should be asked to what extent union membership generally, as distinct from union bureaucracy, benefits from this and other assistance. It is certainly the case that the other 65 per cent of the workforce, although taxed to pay for it, does not do so. Further, it is at least arguable that, through the protection provided to existing jobholders in highly unionised occupations, the unemployed suffer.
A.P.H.E.D.A.
One of the more "interesting" avenues for grant funding is that which is provided through the Commonwealth's overseas aid body, formerly AIDAB and recently renamed AusAid, to the ACTU's overseas aid body Australian People for Health, Education and Development Abroad (APHEDA).
APHEDA was established in 1984 by the ACTU to support fellow unionists overseas. It is chaired by former ACTU President, Cliff Dolan, and current ACTU President, Martin Ferguson, is the Vice-Chairman. This body has its headquarters at the New South Wales Trades Hall in Sydney. In the last financial year, 1993-94, APHEDA received more grant funding than any single union, $2,077,959.
APHEDA prides itself on the promotion of bourgeois left agendas in the developing countries. One of its key targets at the moment is women workers. It has a history of supporting revolutionary -- often violent -- groups, such as the ANC and the South African Communist Party in the 1980s, Palestinian groups in Israel, and Kanak separatists against New Caledonia (France). It is also currently attempting to organise/unionise workers in the Philippines, Cambodia and Vietnam, action which scarcely constitutes "foreign aid".
While some of APHEDA's work in health care and training may be of benefit to its recipients, the Government should not hide behind APHEDA in promoting agendas which are often contrary to the wishes of foreign nations and/or the best interests of their citizens, and the Australian people.
UNION ASSISTANCE TO THE LABOR PARTY
The grants paid to the unions by the Labor Government effectively fund union activities and, as a consequence, free up other union financial resources for political purposes. The Labor Government pays money to the unions. The unions pay money to the Labor Party. At the last election, for example, unions directly donated $2.2 million to the ALP's re-election campaign.
As Table 3 (below) illustrates, there is a high correlation between unions that donate to the ALP and unions that receive grants in either the year of the election donation (1992-93) or the preceding year. This effective cycling of taxpayer funds from the Labor Government to the unions and then back to the Labor Party could in some cases be a gross misuse of taxpayers' money. It is additional to the substantial public funding (10) which is provided to all political parties, the ALP included.
Table 3: Union Donations To The ALP vs Government Grants To Unions (11)
| Union * | Union Donations ($) | Grants To Unions ($) |
| 1992-93 | 1992-93 | 1991-92 |
| LHMWU | 254,151 | 575,048 | 222,169 |
| AMIEU | 10,040 | 122,163 | 57,000 |
| PTU | 38,500 | 40,499 | 170,000 |
| CWU/EPU | 140,648 | 100,000 | 8,869 |
| CFMEU | 314,150 | 1,153,682 | 541,774 |
| AMEU | 306,764 | 1,253,948 | 1,070,759 |
| PKIU | 44,000 | 100,000 | 75,000 |
| NUW | 266,598 | 1,219,518 | 558,928 |
| SDAEA | 446,760 | 65,000 | 25,000 |
| TWU | 76,200 | - | 67,681 |
| BBEU | 2,000 | - | - |
| FSU | 8,575 | - | 100,000 |
| AWU | 56,061 | 270,000 | 325,919 |
| ASU | 83,875 | 470,000 | 320,000 |
| HCSU | 45,912 | 50,000 | 46,500 |
| MU | 84,850 | - | 140,000 |
| Tas TLC | 30,000 | 225,548 | 135,130 |
| Rockhampton TLC | 2,000 | - | - |
| TOTAL | $2,211,084 | $5,655,406 | $3,864,729 |
• See Attachment B for full name of union or association.
As affiliated members of the Labor Party the unions also contribute membership fees. While a detailed breakdown of national membership contributions is not publicly available, Table 4 shows that subscriptions (both from unions and individuals) collected by the ALP in the year to 30 June 1994 provided 37 percent of total revenue. Trade unions would be by far the major contributors to these membership fees.
A recent report on the financial problems confronting the New South Wales branch of the Labor Party stated that there were 700,000 affiliated union members (compared to only 15,000 ordinary members) who through their union paid $2.25 each in annual membership subscriptions. (12) This sums to $1,575,000 per year. It was also reported that these members may be subjected to a $1 increase in their fees to help repay the branch's significant debt. This would increase union members' fees to $2,275,000, and underline the trade unions' significance to the Labor Party's financial position. In New South Wales, unions' membership fees will be contributing over 50 per cent of the division's funds. To this can be added whatever donations the unions make to the division. (13) It is not difficult to see from this just how much the ALP branches rely on the trade unions for their (financial) existence.
Table 4: Membership Subscriptions to the Australian Labor Party -- 1993-94 (14)
| Branch | Subscriptions ($) | Total Revenue *($) | Subs as % of Total |
| National | 506,682 | 2,838,122 | 18 |
| New South Wales | 1,511,454 | 3,586,451 | 42 |
| Victoria | 1,551,628 | 1,989,154 | 78 |
| South Australia | 468,058 | 2,146,908 | 22 |
| Queensland | 1,188,930 | 3,505,570 | 34 |
| Western Australia | 574,250 | 979,132 | 59 |
| Tasmania | 57,318 | 198,811 | 29 |
| ACT | 70,397 | 556,921 | 13 |
| Northern Territory | 13,705 | 355,144 | 4 |
| Total | 5,942,422 | 16,156,213 | 37 |
* Includes amounts received from donations, asset sales, and goods & services sales
Apart from this significant financial support, there can be added the substantial manpower provided by unions during election campaigns, and the separate political campaigns waged by unions themselves. The ACTU reportedly spent $1.3 million on its own election campaign against the Coalition in the 1993 Federal election campaign. That year the ACTU received $1.2 million in Federal Government grants.
APPOINTMENTS
The second major source of trade union influence and favour is reflected in the exercise by the Labor Government of appointments patronage. Important decision-making positions on government bodies are frequently allocated to trade union activists. These appointments do not always appear to take into account the candidate's suitability for the particular position.
Table 5 (below) contains a sample list of government bodies to which notable trade union members have been appointed. It is far from complete, as the Commonwealth Directory neither reveals all appointments, nor all the appointees' associations or union affiliation.
Victorian Liberal Senator Jim Short, who has followed the issue of financial support to trade unions closely through the Senate Estimates process, found that in 1990 the ACTU was represented on at least 50 Commonwealth boards or advisory committees. (15) He also ascertained that over half of these positions carried remuneration in the form of sitting fees and/or travelling allowance. And that was for the ACTU alone.
Close analysis of Table 5 also shows the strong representation afforded the ACTU, and in particular Messrs Kelty and Ferguson and Ms George.
The Secretary of the ACTU, Bill Kelty, is on the Reserve Bank board, National Labor Consultative Council, Economic Planning Advisory Council, chairs the Commonwealth Regional Development Taskforce, is on NETTFORCE and the National Petroleum Advisory Council. His close relationship with the Prime Minister, particularly negotiating the various Accords with the Labor Government, has been well documented in the media and found perhaps its high point in his participation as a witness to the secret (at the time) "Kirribilli Compact" between Mr Keating and his predecessor as Prime Minister, Mr Bob Hawke.
Table 5: Trade Union Appointees On Government Bodies
| * Council for the Order of Australia | Ms J. George |
| * IRC | For example, Ross, Boulton, Riordan, Munro, Marsh, MacBean, Coleman, Watson, Sweeney, Nolan, Grimshaw, Lewin, Harrison, Foggo, Blair, Maher, Acton, Hodder, & Stevens, all with union backgrounds |
| * Administrative Review Council | Mr T. Pallas (ACTU) |
| * Telstra | Mr B. Mansfield (ACTU) |
| * ABC | Mr L. Hingley (FSU) |
| * Australia Council | Ms D. Whelan (ACTU) |
| * Defence Industry Committee | Mr B.W Fraser (Metalworkers Union), & Mr V. Falconer (AWU-FIME) |
| * Aust National Training Authority | Mr B. Mansfield (ACTU) |
| * National Board of Employment, Education & Training | Mr L. Carmichael |
| * Employment and Skills Formation Council | Messrs L. Carmichael, B. Mansfield |
| * Commonwealth Superannuation Board of Trustees No 1 | Z ACTU reps |
| * Commonwealth Superannuation Board of Trustees No 2 | 3 ACTU reps |
| * National Council for the International Year of the Family | Ms J. George |
| * Aust Korea Foundation | Mr B. Mansfield (ACTU) |
| * Trade Policy Advisory Council | Mr M. Ferguson (Deputy Chair) |
| * National Health & Medical Research Council | Ms P. Staunton (Nurses Assoc) |
| * TUTA -- Chairman | Ms J. George |
| * Joint Council ot the Aus Public Service | ACTU rep, AFMEU rep, CPSU rep |
| * National Labour Consultative Council | 8 ACTU reps (including M. Ferguson, J. George, W. Kelty, B. Mansfield), (note: also 6 ACCI reps, 1 MTIA & 1 ACM) |
| * National Occupational Health and Safety Commission | 3 ACTU reps (inc. J George) |
| * Safety, Rehabilitation and Compensation Commission | Mr E. Alford (CWU), Ms D. Whelan (ACTU) |
| * Stevedoring Industry Finance Council | Mr J. Coombs (MUA) |
| * Construction Forecasting Committee | ACTU rep |
| * Telecommunications Industry Development Authority | Mr G. Campbell (AMEWU) |
| * Murray-Darling Basin Community Advisory Committee | ACTU rep |
| * National Petroleum Advisory Council | Mr W. Kelty |
| * Social Security Advisory Council | Ms D. Whelan (ACTU) |
| * Aust Tourist Commission | Mr S. Harrison (FIME) |
| * Tourism Advisory Council | LHMWU rep |
| * Tourism Forecasting Council | ACTU rep |
| * Maritime Services Advisory Committees | Maritime Officers Union rep, MUA rep |
| * Reserve Bank of Aust | Mr W. Kelty |
Source: Commonwealth Government Directory, December 1994-February 1995.
Mr Kelty's assistant Secretary, Jennie George, is on the Council for Aboriginal Reconciliation, chairs the Trade Union Training Authority (TUTA), and is on the Council for the Order of Australia, National Council for the International Year of the Family, National Labour Consultative Council, and the National Occupational Health and Safety Commission.
Meanwhile, the ACTU President, Martin Ferguson, also has a good share of influential appointments including: Economic Planning Advisory Council, Agri Food Council, Construction Industry Development Agency, Trade Policy Advisory Council, and the National Labour Consultative Council. He is also a director of John Curtin House (the former ALP building), APHEDA, the Advance Australia Foundation, and the Australian Centre for Best Practice Ltd.
The totality of such positions gives the ACTU and the other unions a disproportionate influence on a wide range of Australian Government policies. But it is not simply a matter of the influence which the positions themselves bring. As indicated by Mr Kelty's role in negotiating successive Accords, informal relationships can be even more influential. The unions' tentacles are long and far-reaching. Again, the issue is not that unions should be excluded from positions on government bodies; rather, it is a matter of the extent of the appointments.
A recent example of the unions' extensive influence over government decision-making bodies was contained in an article by Mr Andrew McIntyre for the Review entitled "No ticket, No research". (16) This article explained how the unions were able to veto grants by Worksafe Australia, an arm of the National Health and Safety Commission, unless the proposed research was acceptable to the relevant union. Mr McIntyre's article exposed an incident where the AWU successfully managed to scuttle an approved research project because the union did not like the possible outcome of the research, namely "to convince our membership that no radiation hazards exist in the industry (mineral sands mining)".
TAX-FREE STATUS
The trade unions enjoy special tax status. They are treated as favourably as accredited non-profit charities or established churches. While these concessions are not recently-granted privileges, they are nevertheless significant, particularly as the Government is increasing taxes and tightening deductions on virtually every other sector of the economy.
Under Section 23(f) of the Income Tax Assessment Act, trade unions (and employer associations) are exempt from income tax. Contributions to unions -- often compulsory in nature -- are fully tax-deductible under Section 73 or 51(1), as are employer contributions to their associations.
Trade unions are also not subject to capital gains tax on any asset sales -- even though they advocated the introduction of that tax in 1985.
These tax exemptions extend to activities undertaken by the unions which are not related directly to representing their members. Some union business activities and investments are consequently also exempt from income (and other) tax.
An example of this exemption being exploited involved the sale, a few years back, by the ALP of its national headquarters (17) (John Curtin House) to the ACTU. The ACTU is now able to gain rent from that building which is tax-free. When it was in the ALP's hands, the rent was subject to tax. This tax advantage makes an enormous competitive difference in the rental market, as unions can undercut commercial rents while still maintaining above-market after-tax rental returns. This is one of the reasons why so many unions own extensive tracts of real estate in the major capital cities.
In overall financial terms, the unions have an estimated annual income from membership subscriptions of around $500 million, (18) all free of tax. At a conservative tax rate of 20 cents in the $, this is worth about $100 million per annum in tax savings to contributors, and therefore in forgone tax revenue. Unions have net assets of around $400 million, (19) from which the income generated is also generally tax free. Even if earnings amount to an average rate of only 4 per cent, the saving in tax would be around $5-6 million per annum. All this gives them considerable financial strength -- the envy of virtually every other participant in the political environment. Indeed, sufficient resources to encourage Bill Kelty to promote a proposal for the unions to establish their own airline, at a cost of over $40 million.
CONCLUSION
The H.V. Evatt Foundation (a research body established by the Labor movement which has been given specific tax-free status and which receives an annual recurring Federal Government grant -- currently $257,000 -- as well as grants for "special" projects) in a recent report funded with $66,000 of taxpayers' money, Unions 2001 -- a blueprint for trade union activism, was highly critical of the performance of trade unions. This report canned union amalgamations -- although not the taxpayer grants which funded the "yes" cases for such amalgamations. It found that union members were disappointed and disaffected, and felt ignored by the super union bureaucracies. The recent disaffiliation of the Transport Workers Union from the ACTU indicates that this disaffection extends right up to the highest level in the union movement.
Ms Glennis Hanley, in a study for the Deakin University Economics Department, also found that most union members were dissatisfied with union amalgamations and believed their unions were distant and remote. Many had joined simply because of a perception that it was compulsory. The study found two in five members had "significant levels of dissatisfaction with the amalgamation process". The survey described only 13 per cent of unionists as "committed to the movement".
Union members have been voting with their feet and abandoning the unions, and their leadership, in droves. While the role for unions in the internationally competitive economy which Australia must eventually become is something for them to work out, the time for the taxpayer to continue to subsidise this highly unrepresentative movement is surely over.
Can $16 million a year be better spent (or saved)?
No one questions the unions' right to represent their members' interests in public policy debates or forums. But they should not be seen as representing the interests of the great bulk of the Australian workforce and, least of all, the unemployed.
All Australians, and their representative bodies, have a right to be heard in our political system. However, it follows that, if all are to be heard, none should enjoy special status.
Under the Hawke and Keating Labor Governments, the unions have enjoyed a very privileged position. They are at the core of policy decision-making. Ex-unionists make up a substantial portion of the Labor members of Parliament. In return they contribute substantial financial and manpower resources to the Labor Party and its campaign efforts.
This paper explains the relationship. The unions do not just have a fair say; often they are recompensed with patronage, privileged laws and substantial public funds for their contributions to the Labor Party.
Central elements of the relationship -- when assessed against broad national interest criteria -- across the bounds of acceptability and accountability in some cases. They represent at best a misuse, and at worst a flagrant abuse, of taxpayer funds and the power of Commonwealth Government office.
The relationship which now exists between the Labor Government and the trade union movement is, at least arguably, dangerous. It leaves the Federal Labor Government open to allegations of improper use of office. The relationship therefore should be fully explained to the Australian public for the undemocratic and inappropriate arrangement that it is.
The issues raised in this paper do not simply reflect my concerns. They are widely felt, in one way or another, in the community at large. In particular, there is a long history of concerns expressed in public opinion polls about the extent of power and influence exercised by the trade union movement. Unions have a legitimate role in representing the interests of those in the workforce who wish to be represented by such bodies. But the role of unions in practice has extended, and continues to extend, well beyond such a function. With the clear evidence that now exists of the declining membership (and the even greater decline which would occur if membership was genuinely voluntary) the time has surely come for present "arrangements" to be changed. This is partly an internal matter for the Labor Party itself. But, given the two (major) party political system, it is also a matter which is of national interest and on which others have a right to express views and suggest changes.
Note: nothing in this paper should be taken to imply that the Federal Government, the Australian Labor Party, the trade union movement (or any of its constituent parts) has acted outside the law.
Attachment A: Labor Members Of Parliament -- Union Relationships *
| Dick Adams | Union Organiser, Australian Meat Industries Employees Union; LHMWU |
| Peter Baldwin | Federated Miscellaneous Workers Union. |
| Michael Beahan | Education Officer, WA Trades & Labor Council |
| Kim Beazley | Miscellaneous Workers Union. |
| David Beddall | - |
| Arch Bevis | Deputy General Secretary, Qld Teachers' Union; Electrical Employees Union. |
| Gordon Bilney | - |
| Nick Bolkus | TWU/FMWU |
| Laurie Breretcn | Electrical Trades Union |
| Bob Brown | NSW Teachers Federation |
| Bryant Burns | Union official, Amalgamated Metal Workers Union (AFMEU) |
| Graeme Campbell | - |
| Kim Carr | President & Secretary, Technical Teachers' Union (FTUV) |
| Bruce Childs | Secretary, Printers Union (PKIU) |
| Bob Chynoweth | - |
| Peter Cleeland | - |
| John Coates | - |
| Bob Collins | - |
| Mal Colston | - |
| Peter Cook | Vice-President, ACTU & Secretary, WA TLC |
| Barney Cooney | - |
| Mary Crawford | - |
| Simon Crean | President, ACTU & Assistant General Secretary, Federated Storeman & Packers Union; National Union of Workers. |
| Janice Crosio | - |
| Rosemary Crowley | AFUW |
| Barry Cunningham | - |
| Maggie Deahm | - |
| Kay Denmam | Teachers Federation |
| John Devereux* | National President, Electrical Trades Union (Electrical & Plumbing union) |
| Peter Dodd | Union official, Federation Liquor and Miscellaneous Workers Union. |
| Michael Duffy | - |
| Peter Duncan | Labor Lawyers, AJA |
| Mary Easson | ASU |
| Paul Elliott | Federated Clerks Union |
| Chris Evans | Industrial officer, Federated Miscellaneous Workers Union & State Secretary. Fire Brigade Union (WA) |
| Gareth Evans | Inaugural President, Australian Society of Labor Lawyers |
| Martyn Evans | ASU |
| Wendy Fatin | - |
| John Faulkner | LHMWU & NSW Teachers Federation |
| Laurie Ferguson | Research officer, Federated Miscellaneous Workers Union |
| Eric Fitzgibbon | - |
| Dominic Foreman | State Secretary, Vehicle Builder Employees Federation (AFMEU) |
| Michael Forshaw | AWU |
| Ross Free | NSW Teachers Federation |
| George Gear | - |
| Garrie Gibson | Qld Teachers' Union organiser; LHMWU |
| Russ Gorman | MEU |
| Ted Grace | - |
| Alan Gritfin | Union organiser FCU |
| Alan Griffiths | Trade union official |
| Chriss Haviland | Delegate, Public Sector Union; PSU |
| Marjorie Henzell | ASU |
| Clyde Holding | MWU |
| Colin Hollis | - |
| Bob Horne | - |
| Brian Howe | MWU |
| Ben Humphreys | Amalgamated Metal Workers & Shipwrights' Union |
| Harry Jenkins | FMWU |
| Gary Johns | - |
| Barry Jones | AJA |
| Gerry Jones | MWU |
| Paul Keating | Research officer & industrial advocate, Federated Municipal & Shire Council Employees Union. |
| Duncan Kerr | - |
| Peter Knott | NSW Teachers Federation |
| John Langmore | MWU |
| Mark Latham | FCU |
| Michael Lavarch | - |
| Carmen Lawrence | - |
| Michael Lee | FCU |
| Ted Lindsay | Federated Miscellaneous Workers Union |
| Jeanette McHugh | LHMWU |
| Jim McKiernan | Education Officer, AMWSU AMEU |
| Leo McLeay | FCU |
| Bob McMullen | Union Official |
| Stephen Martin | FCU |
| Daiyl Melham | Labor Lawyers |
| Allan Morris | Miscellaneous Workers Union |
| Peter Morris | Shop, Distributive and Allied Employees Union |
| Shayne Murphy | State Secretary, CFMEU (Tas) CFMEU |
| Belinda Neal | - |
| Neville Newell | - |
| Gavan O'Connor | - |
| Neil O'Keefe | Union official FCU |
| Roger Price | FCU |
| Gary Punch | FCU |
| Harry Quick | - |
| Robert Ray | - |
| Margaret Reynolds | Qld Nurses union |
| Rod Sawford | - |
| Chris Schacht | Federated Clerks Union |
| Con Sclacca | Australian Postal and Telecommunications Union |
| Les Scott | President, Australian Bank Employees Union; AWU |
| Nick Sherry | State Secretary, Federated Liquor & Allied Industries Union (Tas) |
| David Simmons | ASU |
| Silvia Smith | - |
| Stephen Smith | AWU |
| Jim Snow | - |
| Warren Snowdon | Assistant Secretary, NT TLC; NT Teachers Federation |
| Peter Staples | - |
| Wayne Swan | AWU |
| Lindsay Tanner | State Secretary, Federated Clerks Union |
| Andrew Tneophanous | - |
| Robert Tickner | President, NSW Society of Labor Lawyers; Miscellaneous Workers Union |
| Frank Walker | Miscellaneous Workers Union |
| Sue West | ASU |
| Tom Wheelwright | n,a. |
| Ralph Willis | Research officer & Industrial Advocate, ACTU; National Union of Workers |
| Harry Woods | - |
* Includes current membership and/or past employment.
Sources: Sanate and House of Representatives Registries of Members, Interests and Commonwealth Parliamentary Handbook 1993.
Attachment B: Union Index
| (LHMWU) | Liquor, Hospitality & Miscellaneous Workers Union |
| (AMIEU) | Australian Meat Industry Employees Union |
| (PTU) | Public Transport Union |
| (CWU/EPU) | Communications Workers Union |
| (CFMEU) | Construction Forestry Mining & Energy Union |
| (AMEU) | Automotive, Metals & Engineering union |
| (PKIU) | Printing & Kindred Industries union |
| (NUW) | National Union of Workers |
| (SDAEA) | Shop Distributive & Allied Employees Association |
| (TWU) | Transport Workers Union |
| (BBEU) | Breweries & Bottleyards Employees Union |
| (FSU) | Finance Sector union |
| (AWU) | Australian Workers union |
| (ASU) | Australian Services union |
| (HCSU) | Health & Community Services Union |
| (MU) | Maritime Union |
| (TLC) | Trades & Labor Council |
| (FCU) | Federated Clerks Union |
ENDNOTES
1. Australian Bureau of Statistics, Trade Union Statistics, as at 30 June 1994.
2. For further analysis of the Accord, see "Industrial Relations And The Failure of the Accord: What Should Be Done" by Des Moore in Australian Bulletin of Labour, Volume 15, June 1989.
3. Senator Neil is also the wife of NSW ALP Secretary, John Della Bosca.
4. Answers to Senate questions on notice.
5. ALP Annual Returns to the Australian Electoral Commission
6. Australian Bureau of Statistics, Trade Union Members, August 1994 (as a supplement to the Monthly Labour Force Survey).
7. Ibid.
8. As for footnote 4.
9. As for footnote 4.
10. $14.2 million at the 1993 Federal election.
11. Australian Electoral Commission, Australian Labor Party Annual Returns 1992-93, and answers to Senate questions on notice.
12. The Australian, 31 May 1995.
13. In 1993-94 this was $10,000. In 1992-93 (an election year) this amounted to $172,666. Australian Electoral Commission, Australian Labor Party Annual Returns, 1993-94 and 1992-93.
14. Australian Electoral Commission, Australian Labor Party Annual Returns 1993-94.
15. Media release, 3 April 1991, "Taxpayers' funds and Government patronage swell ACTU influence".
16. Review, Volume 47/3, 1995.
17. Built on "free" land in Canberra given to it (and other political parties) by the taxpayer.
18. 2.5 million members multiplied by an average annual subscription of, say, $200.
19. Research by Dr G. Griffin (Monash University) and Mr S. De Rozairo (ACTU) estimated the combined net assets of unions in 1989 was about $370 million.
