The Courier-Mail



THIS must be the biggest untold story in Australia right now: Taxpayers pay hundreds of millions of dollars too much for state and federal government buildings, roads and bridges because of “improper” payments to union funds.

So says the Australian Industry Group in a submission to the Royal Commission into Union Governance and Corruption tabled in Parliament. The Ai Group, the peak body for 60,000 businesses, says there is not enough money left for vital infrastruc­ture after the unions take their cut.

“Constructi­on industry unions are deriving very lucrative and inappropri­ate revenue streams from the contributi­ons made by employers to worker entitlemen­t funds and from insurance products which employers are coerced to purchase at inflated prices,” it told the royal commission.

“As union membership revenue has declined, these revenue streams from employers have become central to union finances.” So at what price? “Higher costs for constructi­on projects and electrical work, with reduced capacity for government­s to fund vital community infrastruc­ture,” the submission said.

Oddly, it’s a story largely ignored by the media.

Innes Willox (pictured), the

chief of the Ai Group, hopes to change that by warning that “unlawful and unacceptab­le conduct” was draining everyone’s tax dollars.

“One important issue that Ai Group has been focusing on during the royal commission is the many millions of dollars each year that flow to unions from worker entitlemen­t funds and insurance companies, and the role that industry-wide pattern agreements play in delivering these inappropri­ate revenue streams to unions,” he said.

Stephen Smith, Ai Group’s industrial relations director, said the royal commission identified income protection insurance schemes and redundancy welfare funds run by the CFMEU and the CEPU, which also includes the ETU.

“Money comes out the other end and goes straight back to the unions,” he said.

Up to a third of the money was going back to unions, he said.

“I think it is improper,” he said. “The employer is forced to contribute to the funds and the unions take a huge commission. If it is not unlawful it should be.”

In its submission the Ai Group said the schemes were to the detriment of the very workers unions claim to protect.

“Allowing unions to receive millions of dollars each year in commission­s and so called ‘management fees’ from providers of insurance products by forcing employers to buy products at grossly inflated prices which in many cases provide less generous benefits to employees than other products readily available in the market.”

These “lucrative revenue streams” allowed unions to donate large sums to political parties.

The CFMEU and the ETU funded the Labor campaign at the last election. Now we know why.

Money comes out the other end and goes straight back to the unions

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