Here's some of Grace Collier's column in today's Australian Financial Review newspaper.

More focus needed on how union corruption operates

Recent investigations into corrupt union officials have revealed members’ money spent on flash houses, prostitutes and partying. A Royal Commission that dug out more examples of such behaviour might prompt a thrill of rage but it would not help solve the structural flaws that cause systemic corruption in industrial relations. It’s interesting to learn how union money is spent, but it would be more useful to discover how unions get those funds in the first place.

Back in 1975, 2000 officials were employed by unions with 3 million members whose membership dues provided a tax-free income stream.

Now 4000 officials are employed, while union membership is down to 1.8 million. So twice as many union officials now live off less than two-thirds of the membership revenue. Where is the extra money coming from? This is the important question.

An inquiry into union corruption would only be useful if it examined the myriad ways union officials ask for money, why employers agree to these requests and where all of the money is kept.

However, given unions and employers collude in this behaviour, they are hardly going to come forward to confess, so I don’t know how the conduct or the secret bank accounts will be discovered.

Individual union officials acting in isolation take money off people in business. Sometimes those officials sell out workers’ rights in the process. Examples I have seen include an official who gets a monthly “consultancy fee” from a business for the “right” to pay migrant workers below the award wage.

I know of another case where an annual lump sum is paid in cash to an official of a less militant union for “agreement coverage” of workers, denying the workers the legal right to join a more militant union of their preference. Money raised in these ways would not go back to the union and nor would the union know about it.

RORTS AT HIGHER LEVELS

At the branch level, union leaders seek money from bosses in other ways. A company may be asked to write a cheque to a union “charity” to guarantee a trouble-free construction site. Big companies regularly “donate” significant amounts of money to various union entities, such as “training companies” in return for a “good relationship”. A builder may “donate” an apartment to a union in return for cheaper labour, or they may pay one union in order to keep another union out.