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Where unions outperform the bosses' lobby

Michael Williamson is being vilified.

Williamson is widely reported to be the “best-paid unionist in the country”. But at a paltry $330,000 a year, the suspended Health Services Union boss with the Black “Centurian” Amex card makes less than half the wage of a union boss in the business world.

The bosses’ bosses might be paid higher salaries but their secret faceless boardroom deals are not even in the same league. 

Business Council of Australia boss Jennifer Westacott earns around $850,000. The BCA is the nation’s ritziest union. Its members are the chief executives of Australia’s top 100 companies.

And if the speculation is correct, Westacott’s wage is trumped by the boss of the company directors’ union, John Colvin, who is said to be paid around $1 million.

It’s hard to tell exactly. According to the accounts – which are a bit vague - the top seven staff at the Australian Institute of Company Directors share $3.2 million. That’s an average of $457,000 per AICD union heavy.

They might pay their bosses a bit more but the union members of the BCA and AICD can be pretty certain that, when it comes to alleged nepotism and extravagant spending on the union credit card, Williamson and his former colleague Craig Thompson, are a tough act to beat.

The great class rivalry

Here we are at the great class rivalry, the old struggle between labour and capital. How do the labour unions and the business unions compare?

As far as straight pay goes, the blue side wins hands down. When it comes to transparency in union accounts, red and blue are neck and neck.

In the contest for supremacy in side deals, such as poorly disclosed super fund directorships, red is clearly in the ascendancy.

But when it comes to alleged cash withdrawals on the alleged union credit card, let’s just say the business unions are not even in the game.

BusinessDay looked at the accounts of three business lobby unions, BCA, AICD and Minerals Council of Australia. They seemed to be clean as a whistle, though not much was disclosed.

In the case of the BCA, the only union whose bosses earn but a fraction of their members, fee income rose to $7.1 million last year, from $6.1 million the year before.

Bear in mind that the members, being chief executives, don’t pay their fees themselves. That’s what shareholders are for.

There was a surplus of $1 million, $4.2 million in employee benefits and the chief executive’s pay was disclosed. As former chief Katie Lahey was replaced by Jennifer Westacott in February – and Lahey had been paid $847,315 the year before – it is a reasonable assumption that Westacott is remunerated at a similar level.

Incidentally, PwC performed the audit for a mere $25,000, proof that big audit firms can give discounts even when there is no quid pro quo on the tax advice front.

Unions don’t pay tax. In this regard, labour and capital unions are in a dead heat. Such is the magnificent contribution to society of these dual lobbying movements that they are deemed exempted.

No shortage of firepower

The Minerals Council of Australia (MCA) represents the country’s exploration, mining and minerals processing industry in its soi disant “contribution to sustainable development and society”.

MCA members produce more than 85 per cent of Australia’s annual mineral output and have a tendency to be able to do away with prime ministers such as Kevin Rudd when they get annoyed.

The MCA accounts, needless to say, are flush. There must be another bunch landing soon, as the last accounts were for December 2010. These showed revenues jumping from $10.7 million to $35 million, no doubt due to the exigencies of fighting a cruel and scurrilous minerals tax.

The advertising bill seemed to rise from $38,000 to $15.8 million while consultants’ fees were up from $1.6 million to $5.9 million. Net assets were $8 million and key management personnel accounted for $3.1 million, up from $2.4 million.

That would have included the MCA union boss Mitch Hooke, who wouldn’t come cheap, and was a sum apparently shared by 13 people. So, the MCA is far more parsimonious with its members’ money than comparable business unions.

It ought to be noted too that, in distinction to the BCA, the MCA is transparent enough to put its accounts on its website so members don’t have to search the ASIC database to catch a glimpse of what their union bosses are doing with their shareholder-funded members’ fees.

Pay averaged $242,000. That is a far cry from the $457,000 per AICD union boss, virtually half in fact, so the MCA members such as BHP and Rio are getting value for money.

These multinationals might be fighting tooth and nail with their arch-enemies from the labour unions over coalminers’ costs but, being members of the BCA and AICD too, corporations and their directors are more prolific unionists than their proletarian brothers, and sisters. Viva la revolucion!

For its part, the AICD is sitting pretty on $15.6 million in cash. Members’ funds rose from $12.6 million to $13.7 million and the salary bill was up from $12.2 million to $15 million. Revenues stood at $42 million.

Plenty of firepower there. Utterly well-funded as the AICD is, we will all be hearing a lot this year about the miserably burdensome life of the company director - in particular how the poor director urgently requires legal reform to protect it from taking responsibility for its corporate decisions.

It should be said that the AICD used to be a basket case when it came to its own finances. It is now ship-shape.

Transparency in the bosses unions then is probably in line with the workers. Even the HSU accounts are more visible on the website but a quick check of the peak union, the ACTU, for instance and we were unable to find any financial accounting.

All up it’s a mixed bag for the labour unions. Some disclose well, others barely at all.

Union side deals

But it is in side deals that the red unions really outdo their class-war counterparts.

The union official wages are but one aspect of a typical union boss take. Although disclosure and transparency are abysmal, union bosses often enjoy directorships of related superannuation funds and other entities.

Michael Williamson for instance has his $330,000 HSU pay bolstered by $150,000 from assorted government and union-related positions. The unions like to keep this lurk quiet but a recent Victoria/NSW stoush saw it spill into the public domain in statements of claim lodged with the Federal Court.

Bernie Riordan, a NSW unions heavy was alleged to have picked up $1,807,884 in fees since 1998 from sitting on the boards of the Energy Industries Superannuation Scheme, Futureplus Financial Services, Chifley Financial Services Limited and Mert Limited.

Another couple of ETU union officials, Neville Betts and Paul Sinclair, were mentioned. From 1998, Betts had taken home $595,374 from directorships of state-owned electricity company, Transgrid, and the ACT Building and Construction Industry Training Fund Authority.

Sinclair had kept $991,839 from sitting on the board of the electrical industry super scheme and Integral Energy, it was alleged. There is a need for urgent reform in this area – full disclosure.

The business lobby pales in comparison. It has nothing on these lurks from its labour union boss rivals.

The bosses’ bosses might be paid higher salaries but their secret faceless boardroom deals are not even in the same league as the secret faceless backroom deals.

12 comments so far

  • All the talk of "Class Warfare" is coming from the Right. It's coming from the Vested Interests, it's
    bandied by the Big Business lobbyists. it is being waged against the average worker and perhaps union member, with astroturf campaigns and media sprays of "Fear, Uncertainty and Doubt" (FUD).

    "Class Warfare" as a phrase is now being used by those with the biggest weapons, the safest bunkers and largest amount of ammunition. Those who can fund a media buyout, a full page ad, with support from the Coalition, the IPA and its ilk. Unions are there to protect those who cannot
    do the same, except collectively. Yes, there are problems, but the weasel factor is in the boardrooms, not the workplace....

    Commenter
    virag0
    Location
    Penrith, NSW
    Date and time
    April 17, 2012, 1:36PM
    • Just rhetoric... why not address the issues raised here. Unions and Industry Super funds represent millions of people and billions of dollars, yet for some bizarre reason there is no transparency. This is my union fees. My retirement funding. Yet I don't know who's running it and what they're being paid.

      My local swimming club has more protocol and disclosure with its executive. Why can't the fat-cat union bosses disclose their earnings and perks just like anyone else with the responsibility of looking after other people's interests?

      Company Directors have to. Government bodies have to.

      Face it, the union movement has lost its way... it only serves the vested and potentially corrupt self-interests of the fat- cat unionist... and as far as they're concerned the workers are fodder

      Commenter
      time for disclosure
      Date and time
      April 17, 2012, 4:05PM
  • Many of my colleagues dont like unions. I'm a unionmember. I wish they/OZ would realise that these employeers UNION exist but in guise of other names.. eg Buiness council, Associations of commerce, etc. Excellent article. Hope this is also relayed on TVs primetime.

    Commenter
    champ
    Date and time
    April 17, 2012, 2:35PM
    • Great article Michael!
      Boardroom regimes just like union backrooms are run as closed shops. If you blow the whistle on their long list of secretive lurks you'll pay a price
      Sadly for you Michael writing articles like this means only one thing & that is you'll never make chairman of the board or union president
      Oh, by the way, you forgot to mention how these folk are always lobbying to get their mates to nominate them for a gong for all their "hard work"

      Commenter
      Richard Talbot. former NRMA director
      Location
      Sydney
      Date and time
      April 17, 2012, 3:51PM
      • Is the author suggesting that we forgive Williamson's profligate behaviour on the grounds that leaders of Australia's leading lobby groups are being paid more?

        While the author may right to question the pay of Australia's leading business lobby groups, it does in no way forgive the deplorable behaviour of Williamson.

        There are fat cats not only in business. I think we have seen that they also exist within the union movement.

        All should be vilified

        Commenter
        A Bono
        Date and time
        April 17, 2012, 4:12PM
        • i think this article misses the major point, which is that it is not really "our" problem if business "unions" rip off big business. it's not good, but the impact is far less than the disgraceful conduct of union bosses who take hard earned money diretly from their low-paid members and spend it on themselves. you can't draw any such analogy with business representative bodies.

          i was asked to join the union but i declined - the idea of a body looking after my interests and providing oversight of my employer sounds logical - but who oversees them? i think a lot of people fall in love with the romantic notion of what unions represent, rather than how effectively they do it in practice.

          Commenter
          economics 1a
          Location
          melbourne
          Date and time
          April 17, 2012, 4:17PM
          • The problem is, economics 1a, that shareholders pay the business union membership fees. So it is the end shareholder (I assume you have a super fund) that ultimately pays the fees of these business union fat cats.

            Commenter
            Billybob
            Date and time
            April 17, 2012, 5:16PM
          • i understand that billybob, but shareholders don't invest in companies to support the BCA. they do however fund unions with an expectation of receiving a direct benefit (representation). while wrong on any level, the impact of mismanagement or corruption on the "little person" is much greater when perpetrated by unions than business bodies.

            Commenter
            economics 1a
            Location
            melbourne
            Date and time
            April 17, 2012, 6:12PM
        • All good stuff Michael. Not the usual gratuitous, trivialisation that seems to preoccupy so much of MSM. Keep it up.

          Commenter
          Danglin' around
          Location
          Outer reaches of nowhere special
          Date and time
          April 17, 2012, 4:44PM
          • Well said Michael,

            Transparency is what we want. Transparency, openess, and accountability.

            How do they get the appointments. Who recommends them, on what grounds are they recommended, what skills do they have, and why are they chosen for appointment.

            All importantly what skills do they have for the role, and how much are they being remunerated, including expenses.

            Sadly the superannaution industry is one of many that lacks transparency and accountability, including the regulator.

            It is time this country appoints people on merit. All roles should be open to scrutiny, whether they are government appointments, unions, superannuation, board positions, oversight bodies etc. Friendships, business relationships, common memberships, political ties etc. should all be disclosed so that the appointment can be scutinised, and corruption risks can be controlled.

            Commenter
            Mark
            Location
            Melbourne
            Date and time
            April 17, 2012, 4:47PM

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