Maritime Union asked to explain accounts

Rodney Hide

HIDE SIGHT

The Maritime Union of New Zealand is in the same pickle as the New Zealand Meatworkers’ Union. It, too, has hidden millions of dollars of spending from the legally required public scrutiny.

Following my complaint, the Registrar of Incorporated Societies, Neville Harris, has ordered the Meatworkers’ Union to re-file six years’ of accounts (Hidesight, Aug 24).

His clear expectation is that the full accounts be presented for approval at the annual meeting on November 7 and be filed promptly thereafter.

It will be fascinating to see if the union complies. It has fought long and hard to keep its accounts hidden. But I’m backing the Registrar to prevail. He has the necessary statutory power to ensure the union complies with the law.

There will be some sharp, critical eyes going through the accounts once they’re filed. There is a great deal of interest in the spending that the union has been so anxious to keep from public view.

The legal obligation runs like this. To register, unions must be incorporated societies. The incorporation is important because it creates a body corporate distinct from the members of the union. 

The union can thereby hold property and incur obligations in its own right.

Critically, being a member of an incorporated society does not impose on members any liability in respect of any contract or debt incurred by the society. There wouldn’t be too many union members if they were liable for union debts.

In return for the legal protection of members, incorporated societies incur legal obligations, one of which is the filing of an annual financial statement that is available for public scrutiny. That way, any creditors and others can see the financial health of the union.

However, that’s not been possible with the Meatworkers’ Union for years and nor is it the case with the Maritime Union. The accounts haven’t been presented in full and millions of dollars in spending has not been made public as required by law.

The lack of transparency is truly shocking. It’s especially so in light of the spending scandal that has in recent months rocked the Australian Health Services Union.

The Maritime Union has 13 branches throughout New Zealand. For example, the branch in dispute with the Ports of Auckland is called “Auckland Local 13”.

The spending of the branches has not been accounted for in the Union’s financial statement.

The union’s 2011 financial statement declares:

“4. ASSOCIATED ENTITIES

The Union established Branches at each port in accordance with the rules of the Union. These branches have been given delegated authority to manage their affairs on behalf of their local members. The Financial Statements have not included any information on the financial performance or position of each Branch.”

The accounts show the union taking in $338,058 in affiliation fees, of which $80,059 came from “Auckland Local 13”.

Branch president Garry Parsloe says union fees are 1.25% of wages and the average wage is $57,000, excluding bonuses and allowances. The union claims 300 members at the port. So that’s an income of over $200,000. But only $80,000 of that makes it to the union proper and is declared. That’s just one branch.

The 2003 accounts likewise just show the affiliation fees and not the full income and expenditure of the union. The failure to disclose properly goes back a long time.

I have emailed the Maritime Union for an explanation but so far have not heard back. I have also lodged a complaint with the Registrar.

I will keep readers informed.

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34 Comments & Questions

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Well done Rodney! Good to see someone's shining the light on the dodgy work done by unions.

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Ta.

The Registrar of Incorporated Societies replied to my complaint as follows:

"In light of the issues raised by the NZ Meat Workers and Related Trades Union matter, my office is currently reviewing financial statement compliance by those incorporated societies who are registered unions.

The Maritime Union of New Zealand is part of that review and there are some issues that my office will be following up with the Union."

The way I read that is that every union is being investigated because unions are required to incorporate.

That's a fulsome investigation. I know of only two unions who have unlawfully hidden spending though their branches but I have only looked at two!!

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Good on yer, mate.

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Well done indeed,Rodney.
It's past time for unions to be held to account,but shameful that it required your goodself to take action to get to the truth.
Where are the authorities who are supposed to monitor unions?
And why have they been so ineffective?
Is this another case of public service inefficiency?
some sorting out required!
liberte

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Ta, I think we might be getting there with the now wider inquiry into all unions.

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Who are the audits. Can't see how they can sign off the accounts. Maybe a complaint to NZICA aswell.

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Fighting to expand the power of the state to inquire into wholly private organisations - keep up the good work?

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Graeme it is the law for them to file the accounts...they are failing to properly do it, and are hiding millions of members funds, but you are ok with that?

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Hi Graeme,

I am not sure of your point, Is it:

1, That organisations can pick and choose what laws they comply with to limit the power of the state? I doubt that. Think finance companies.

2. That the law is wrong. Could be. I can imagine a world where there is no incorporation and no limited liability. But the ability to incorporate is hardly the biggest blight of the state on our land and the quid pro quo of public accounts seems sensible and I would guess dates back to the very inception of Incorporated Societies Act 1908 -- I don't have the resources readily to hand to check.

Put it this way, as a Libertarian/Anarchist, if I was given a free hand, the ability to incorporate is not where I would start and many respected libertarians and classical liberals consider the diminished right to sue more than publicly compensated for, i.e. the public good justifies the taking.

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My point was that this was a very odd thing for you to devote a column to. A union has possibly broken the law, and may be liable for a fine of 10c a day for each day their returns are late.

It is right and proper that the authorities investigate, and that the unions comply with their legal obligations while those remain as they are. But that does not mean that the public interest is particularly high. You have I assume, one column per week in the NBR.

I was merely wondering why you thought this matter was the most important matter of the week to bring to our attention. Given your libertarian/anarchist views, surely there was something else of greater import that we should be informed and/or alarmed about, rather than the failings of some administrator in the MUNZ.

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Fair enough. But I try to write across a range of topics and always on what interests me. I am sure you would soon get sick of it -- and so would I -- if I just wrote on Leviathan and the lost opportunities hobbling our freedom occasions.

Also, I have become as determined to prise those accounts into public view as the Meatworkers have been to keep them hidden.

It may be just an administrative thing. But if so, why has the union fought so hard and long to keep their accounts hidden?

That makes me suspicious. The experience of the Australian Health Services Union suggests transparency in union accounts is every bit as important as transparency in finance houses.

Who knows? None of us will until the accounts are properly filed.

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Well the accounts can be all correct and properly audited but not filed with the Registrar. It's not the auditor's job to ensure they're filed. It's the union's.

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Well done Rodney, can the unions actually be closed like pokie trust? I see the owl on whale oil has been writing about lots of different analysis on unions..do you think he is on the track? Also are you going to be writing for the Truth also?????

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Well done Rodney..I see the owl has been writing stuff on whale oil..do you think he is on the right track? Can unions be closed down like pokie trusts? Will you be writing for the Truth too???

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I think Owl has done great work and analysis as has the Whale. Reading the Whale got me started on this.

The Registrar has the power to wind up a society but more especially he has the power to compel the unions file their branch accounts.

Phew. A couple of columns a week is all I have in me!!

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Coming from someone who used the public purse to fund his courtship with an overseas trip....

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Kim -- Yes. For 15 years I lived off the taxpayer as a Member of Parliament. In that time I raised my son, got divorced, remarried and had the first of my two daughters. All the while being paid as an MP by the taxpayer. I tried every day to give value for money in a complex environment. I wonder now looking back whether I always succeeded. The state is a big machine.

But thank you for your support.

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Hi Rodney, thanks for the reply. Your contribution to NZ politics is very debatable. I do agree that you managed to suck from the public teat to the tune of a couple of million in wages. That’s why i find it so hard to believe you would think it ok to spend thousands more (unearned) on a overseas trip for you and the misses. But hey, don't let a little hypocrisy get in the way of a good union bashing rant

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I won't. Promise. And it's a "rant" that the Registrar agrees with. Watch this space.

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Yes the Maritime Union's financial situation must be available for scrutiny, unlike the publicly owned Ports of Auckland and the millions of dollars they spent on Lawyers, consultants, PR Companies, full page ads, in their "bullet proof" ideological campaign to destroy an organisation of workers. The lack of transparency to ratepayers is truly shocking! One rule for you and your mates, and another for the workers eh Rodney.

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Well, the Auckland Port is fully accountable to the Auckland Council and is open to great scrutiny than say if it were a department within the council. However, there's no doubt there would be a much greater transparency if the Port were privatised, a policy that I fully support for precisely that reason.

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Quote "Well, the Auckland Port is fully accountable to the Auckland Council" Thats not what Brown said during the dispute. If i remember rightly, YOU set it up so that the council has no operational control. It is only accountable to the AC for its bottom line.

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The council never had operational control.

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Would you honest want the council to have operational control? they can't even run their own budget. The equity in the asset would be wiped out in a couple of years. Want the council to run AIA too?

Get a grip.

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Something I've been curious about and I apoligise if it causes offence but do you think you have more power now to force change/get things done then when you were in parliament?

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I don't know. It was a huge relief on being given the boot to no longer have to take responsibility for the 95 percent of government spending and policy that is counterproductive -- and to be endlessly and fruitlessly explaining why it is so -- and so in one sense I now don't try to change things. I am not responsible for it.

But Ludwig von Mises rightly observed that watching government is like watching someone trying to cut wood with a hammer. You can't help but point out that using the handsaw would be more effective.

And so I do.

So far I would have to say that being in Parliament is for more effective. I would guess that I would have the union accounts sorted in one question time even in opposition. It would take me a week to set it up to run well and to get the desired result. It's frustrating banging away from the outside compared to that.

The ability to question directly and embarrass a Minister in public is very powerful, and gives power to letters written to both officials and a Minister that the public don't enjoy.

On the upside, I am reveling in writing my own words and not having my intentions and actions written by journalists who I regard as having only a superficial grasp of politics and almost no grasp of public policy and economics.

The idea of the free-market as the most liberating and wealth-generating force known to man is inconceivable to every journalist I know.

Most believe the free-market has the exact opposite effect. They can't explain their belief it to be so -- and so do all their friends and colleagues.

Their only response is to regard someone advocating the free market as a policy prescription as dense, morally deficient, and perhaps both.

And so I wonder if just explaining why the free market generates both freedom and prosperity in a small can contribute to better understanding and become some force for a better world.

As you can tell, I take no offence from your question. It's made me think .

Thank you

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Rodney

I agree with your comments on journalists, but think your next aim should be at the backgrounds of the judiciary. We have seen a number of ridiculous outcomes from the High Court and Court of Appeal highlighting the lack of commercial backgrounds of the judiciary. Happy to supply a list but I think the NBR wouldnt publish it for fear of legal action.

Can you have a look at whether there are any members of the judiciary that have ever served on the board of a listed company or a company that has issued a prospectus ? What about the backgrounds of the civil servants involved in the monitoring of commercial enterprise at the FMA ?

The ruling referred to above has turned NZ into a country full of AC's (Backside covers) who are becoming so risk averse they are holding the companies they serve on and therefore the country back. Directors have been spooked when they see cautious and prudent colleagues, seeking external advice and then making decisions consistent with that advice then thrown in front of the courts and rulings by people that have no or little commercial backgrounds - just a career as a litigator.

Lawyers, by the nature of their training, are there to avoid risk, but risk is what produces those returns we as a country need. without risk we have no returns. WE NEED RISK TAKERS to get this country moving, but until directors and management have the confidence to take risks (particularly in listed companies) we are going to be held back and reliant on growth from people able to raise money from their own resources (as opposed to from others). That means small companies (SME's) which are important but you must have larger companies growing as well to get momentum.

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Happy to. Email me any information you have to RodneyPHide at gmail.

ta.

You are right about risk and risk takers.

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Thanks for your reply and you're doing a good job on radiolive.

Cheers

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The exact same issues apply to the Environmental Defence Society run by Gary Taylor.

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If Gary Parsloe was so relaxed about this and has done nothing wrong - why doesn't he just file all the branch accounts on the incorporated societies website - a) they are audited already and b) he has filed all their tax returns - why wait for a conference to get approval.
It is really easy to file those branch accounts under the MUNZ login - will only take about 10 minutes

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Just as unions fund the left businesses fund the right. I wonder now that mud has thrown if anyone else would be a little nervous if their financial history was dissected publicly?

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I totally agree that all should be available when it comes to the public purse - John Banks has definately had some sunlight..however this about abiding by the incorporated societies rules which are fairly simple.

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I wonder if he has actually filed the tax returns? Typically you need the accounts finalised before the tax return caluclation can be completed accurately. I wonder if the IRD are taking a sideways look at this now too?

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