Unveiled: Australia’s richest union

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Prime Minister Malcolm Turnbull with NSW Business Chamber CEO Stephen Cartwright

Imagine if there was a company which received millions of dollars in government grants each year, paid no tax as it held charitable status, owned recruitment agencies and also owned a law firm which fought against penalty rates for young workers and workplace leave for victims of domestic violence.

There is such a company. It is called the NSW Business Chamber Limited. Its financial statements show the NSW Business Chamber recorded revenue of $190 million dollars last year of which $5.8 million came in government grants.

It is difficult to tell without more intimate knowledge but their accounts suggest the folk at the Chamber may be living high on the hog.

“Direct salary and other costs of providing services” was $101 million last year (up sharply from $78 million in the prior year), there was a further $68 million in “employee benefits expense” while the bill for cars was $2.8 million. The travel and entertainment chit was $2.5 million.

Chief executive Stephen Cartwright said yesterday the money was well spent. The Chamber had a strong focus on assisting SMEs (small to medium-sized enterprises) and conducting not-for-profit work such as training and apprentice schemes and advocacy. It was a “union” of sorts, he said, and like other unions it was a not-for-profit organisation.

Stephen Cartwright, CEO NSWBC

Asked whether it was appropriate for the Chamber to be claiming tax subsidies and government grants in view of the fact that it owned a law firm and recruitment agencies run to make a profit (and which, by virtue of their Chamber parentage, immunised them from tax), Cartwright said these businesses helped to finance programs such as the Chamber’s boot camp for unemployed youth in Western Sydney.

According to its financial statements, the “core mission” of the Chamber is to “create a better Australia by maximising the outcome and potential of Australian businesses”.

There is a broader public interest issue at play here. While
other unions representing workers are struggling financially, the Chamber is sitting on a plush investment portfolio of $184 million in shares, bonds and trusts, besides its $13 million in cash.

The Chamber also owns the law firm, Australian Business Lawyers & Advisors Limited (ABL) and although ABL does not file financial accounts as these are consolidated in the the parent company accounts, it does appear to have a robust workload.

This week, ABL’s chief executive Nigel Ward and director of workplace relations, Luis Izzo, won a case in the Fair Work Commission which reduces penalty rates for workers in the hospitality industry.

These were big proceedings which ran for 39 days, feautured 130 lay witnesses, a dozen expert witnesses and nearly 6,000 public submissions.

ABL CEO Nigel Ward

The Australian Charities and Not-for-profits Commission (‘ACNC’) regulates charities at a federal level. Its records show the Chamber was registered in 2014 under the criteria, “purposes beneficial to the general public and analogous to the other charitable purposes”.

While pursuing charitable purposes, ABL, on behalf of the Chamber, has appeared in a raft of common issue proceedings in recent years acting for employers against union and employee claims including:

• Award flexibility

• Blood and bone marrow donor leave

• Casual and part-time employment

• Family and domestic violence leave

In the latter proceedings, the ABL’s Nigel Ward opposed a claim by the ACTU and argued against workplace leave for victims of domestic violence.

Chamber CEO Stephen Cartwright “strongly disagreed” with the proposition that arguing against entitlements for low-paid workers and victims of domestic violence could not claim to be a charitable exercise.

“We are required to be there by the Fair Work Commission,” he said. “It’s a necessary part of the workplace relations system … our job is to go down there and act in the best interest of the country and employment. Without this, capital walks away”.

On the matter of how businesses operating for a profit could be consolidated into the Chamber’s accounts and therefore not pay tax, he said this practise was appropriate as the cashflow was expended in not-for-profit activities assisting the Chamber’s 13,000 members.

The $2.8 million expense for motor vehicles was for a fleet used by customers, often in regional areas, and executives did not have company cars.

PwC, the Chamber’s auditor, picked up $437,000 last year and $565,000 the year before and appears to have a conflict of interest in that its non-audit fees for tax advice and such exceeded its audit fees.

The Chamber has also made political donations disclosures over the years. Both major parties have been beneficiaries with the bulk of donations going to the Liberal Party. It has also funded election advertising in NSW, however Stephen Cartwright said the Chamber was “fiercely non-political”

This column is co-published by michaelwest.com.au with The Conversation and is part of the Democracy Futures series, a joint global initiative between The Conversation and Sydney Democracy Network, sydneydemocracynetwork.org The project aims to stimulate fresh thinking about the many challenges facing democracies in the 21st century.

  • slorter

    Another healthy scam provided to us by neoliberals

  • southern macro

    Another government sanctioned tax avoidance scheme it would seem

    Nice work if you can get it

  • Artemis Arkady

    Funny I should find this because I was just thinking last night that political parties are unions for politicians. Must mention that to Liberal party some time.

  • Mal Bowker

    and the majority of our Federal Liberal MPs are also members of the Catholic Church which is pretty much in the same position with a much much higher turnover.

    • Geoff Roberts

      Got it in one!

    • Coral Freeman

      And lawyers…!

  • CUSTOM TRUMP HATS
  • JIm

    It is very entitled organisation indeed that could say we are “fiercely non-political” while handing out political donations.

  • LuckyJoe321

    Jus another hidden agenda for us all not to see

  • Peter George Coppock

    I firstly declare that I a business supporter through and through as I believe that society cannot exist successfuly without business. I have worked a lifetime in industries that in general support business, these industries being banking, education and training and employment. I have been heavily involved in management and responsible decision making roles in these industries. I like to think of myself as a practical lateral thinker and problem solver always prepared to consider any logical argueement and coming to decisions for the better good irrespective of political alignment.

    Despite many views to the contary management usually makes good sound educated decisions based upon knowledge, research experience etc only to be railroaded, undermined or decimated by senior management or authority going against that decision. Now just think about it how many times have we complained about a government decision that is publicised and is totally at logaheads with public opinion and logic not to mention millions $ spent on research papers. Why?

    Simply the original decision was not in the interests of those businesses who are represented by the lobbyists.

    I am not against lobbyists who represent individual businesses or interests what I am against is

    “an organiseation or organisations that make a business out of lobbying government soley for benefit of it’s own existance and growth”.

    Lobbying would have to be as old as life itself, in it’s man to man basic form it is good as it is one person expressing his opinion often with positive outcomes.
    When individual industries combine to make representations in the interest of their individual industries that is logical and in the general interest of the further development of business and growth. I liken this senario to industry unions both being a “Goldilocks” existsnce “not too small not too big”?

    Where the problem and threat arises is where the entrepreneurial lobbyist sees an opportunity to “empire build”. This is only natural for the parties involved and is the basis of natural business but industries based solely on self interest very rarely act in the general interest and always loose track of the original intention.

    Recent events have and continue to show the effects of “charitable organisations” and their lobbying in the “education, training and employment industries”.

    In my opinion these are or should be Australias’ core industries, yes forget the mines and residential building (all of the others are almost non existant now anyway).
    “Without a workforce industry and business cannot exist.
    Education, training and employment is big business in Australia and I dare to claim that as a business whilst it it’s growth is high it’s productivity, return on capital, equity and investment is dismal to say the least. Expenses and losses are high, profit is non existant and quality output is well below acceptable.

    Why?

    Because the education, training and employment industries are predominantly consistent of “charitable organisations and lobbyists”.
    Their main income source is governments and governments are vunerable to lobbyists.
    Their object is self growth so they can argue to government their need for more capital and funding and their growth gives them more influence with government.

    Being practical and relating these organisations to employment if they operated successfully they would deminish in size as their clients gained employment. Their “negotiated” contracts ensure growth and stunned employment.
    It has been a like situation with training neither have been “result” orientated just “participant”.
    The “negotiated outcomes” are more based upon sign up not completion.
    It is the negotiation by lobbyists that set these important roles up for failure.

    A review of ” charitable organisations” and “lobbyist organisations” is long overdue.
    At very least examination of the financials of these organisations will in general show “reserves” far in excess of need and most likely “high reserves for management remuneration”.