Looking through the Meatworkers Union accounts?

Yesterday I wrote about the missing money from the Meatworkers and the apparent hiding of significant amounts of members money through a complicated arrangement with branches. No answer yet as to where all the money is but it appears to be well hidden in the branches.

Riddle me this though…Are the Meatworkers Union seriously telling us all that their President does all that he does for just $4000 per annum?

That is less than the $13,800 paid to the Labour party in “Affilation Fees” and half as much as paid to the IUF…essentially exporting Kiwi money to international unionists.

Another intersting part is Loss/(Profit) on Disposal of Fixed Assets of $553…not a lot of money…but when the union claims a 14 year old IBM laptop (bought in 1998) as an asset worth $3708 then you really do realise that there is something whiffy in their accounts.

They paid just 11% tax on their profit. It appears that their Net Taxable Income is actually interest on deposits. In 2010 they actually got a refund because their RWT basically over paid their tax liability. (Note 2 in the accounts)

 


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  • Callum

    They only need to pay tax on income earnt OUTSIDE their membership, in this case interest. That is because the union is owned by the members and you cannot make a taxable profit (or a deductible loss) from trading with yourself. You find this in also sorts of organisations owned by the members, sports clubs, chartered clubs etc.
    The key question I would have on these accounts is should the branches be consolidated, are they controlled by by the national union or do they retain autonomy? If the branches are autonomous are they incorporated societies and if so have they filed their financials?

    •  Good comment Callum – I also looked at that bit affilaition of branches with national bodies is a big issue with organisations owned by their members, sports clubs, chartered clubs etc. Surely a Union of this size is audited and with the new rules on not for profit organisations IRD would be on to this if it was sus….

      • Callum

        Unions while generally not for profit are not under the new rules as they are not considered a charity. IRD won’t generally look at unions, clubs etc unless they get a tip off, they seem to be concentrating on charities as they provide a bigger potential threat to the revenue base as payments to charities are tax deductible to the payer. Unions, clubs etc are generally not able to earn significant revenue from non members and when they do (say a chartered club letting in a lot of non members in to their bar) they are generally caught by other legislation (that example would breach liquor licensing laws). GST and PAYE obviously are potential problem areas as Matt McCarten has proven.

  • Blokeintakapuna

    Keep digging please WO…

    There’s cetainly some very dodgy dealings going on – McCarten / Unite – owing over $150K in unpaid taxes… UPMU not filing company returns – Labour Party associations…

    Smoke… fire…

    Walks like a duck, sounds like a duck…

    Disenfect with brilliant sunshine please – uncover more corruption it could cause the Labour Party to further implode upon itself hopefully rendering them about as relevant as the mana party…

  • Top Bloke

    “…14 year old IBM laptop (bought in 1998) as an asset worth $3708 …..”

    Looking at the fixed asset lst – That was the original purchase price. It has been written down completely and now  is valued at $1.

    Nothing dodgy about that other than poor asset management, should have been sold/disposed off years ago

    • Doug_S

      Yes, I also spotted that. Total assets are 26k with the majority bering vehicles at 18k. Book value and Net Asset value are the only numbers worth looking at. I also did some quick figures and for the 2010 period their total membership is 13496. Auditors clearly mention each member is average $51 p/a. I simply divided the total income (fees) by 51. I believe the most interesting information lies in their stated membership as apposed to the actual. Can anyone clarify the stated membership for 2010?

      • Used to have this with an organisation I did the books for and one of the issues is treating non-paid up members as part of your member count but you haven’t got their money when you do the books; and if dues are to all be paid by a certain date of on the anniversary of joining. There will always be a discrepancy between money rec’d and member numbers unless you’re accruing your “accounts” – most annualise so the problem should be identified in the comments to the accounts to stop the wrong assumptions being made on money going missing.

      • Timandtim

        Union website states 23000 – that is a big variation but understand where you are coming from

    •  Agree – four years used to be the max – crazy leaving it on the books this long.

  • rouppe

    They have a permanent ACC Consultant? Paid $43,433? What do they do? 

    • Blokeintakapuna

      Rort ACC on behalf of their members probably…

      • Callum

         In this particular industry their is HUGE interaction with ACC, mostly with regard to reducing workplace accidents and ensuring employers are implementing required safety improvements. ACC costs for the meat industry are massive so any reduction in injury rates obviously benefits both employers and employees. I would be surprised if they didn’t have very regular contact with ACC.

  • johnbronkhorst

    So the president gets an honourarium…….but NO salary??? really??!!

    • He’s “lucky” he even gets that….real tricky that one IRD should look at how tax is paid by him.

      • johnbronkhorst

        at $6 per week per member @ 23 000 members..thats between $3.12 mil and $5.52 mil per year on a 40 week season if we have accounted for $700 000 that is aminimum of about $2.4 million somewhere, now suppose they didn’t just steal it, it is invested at 4% ie earning $96 000 at 30% tax thats about $28 800 in tax owing roughly!…How much did they pay?

    •  Sorry John – I was getting at how much tax did the President pay in his tax return – i.e if salary and therefore PAYE or as honourarium at what rate….

  • BJ

    I’d like to see the breakdown of all the salaries and whether some of them go to one and the same person  – and the meetings and disputes amount broken down into spending areas.  
     How can there be such discrepancy when an auditor has been involved?

    • Callum

       In terms of revenue, the key audit test you would perform would be confirmation with the branches of the fees paid and number paid for. That could be either by direct contact or review of correspondence, the fact some website somewhere says 23,000 members would never even enter in to it as you aren’t issuing an opinion on that website. So if membership figures from branches x $51 = revenue recorded then you simply wouldn’t do any more.

  • TJ

    1.  “Another interesting part is Loss/(Profit) on Disposal of Fixed Assets of $553…not a lot of money…but when the union claims a 14 year old IBM laptop (bought in 1998) as an asset worth $3708…”
    As mentioned above, this is the cost price not current book value (which is $1). The assets are depreciated on a diminishing value basis, which is a perfectly valid accounting policy choice but does mean they take forever to become fully written down and should arguably be written down earlier, but we are talking very small $. 

    2. “They paid just 11% tax on their profit. It appears that their Net Taxable Income is actually interest on deposits. In 2010 they actually got a refund because their RWT basically over paid their tax liability. (Note 2 in the accounts)”. 

    Unions are considered mutual organisations and only pay tax on any activities which fall outside of services provided to members. This of course also means any expenditure related to membership activities is not deductible. Tax expense for a union is therefore generally on investment income or other ancillary services. 

  • Blam

    Why didnt you read the notes to the accounts and the book value of the assets when you passed judgment ?, not to mention the process of tax exemption under the Act
    It just means that any form of financial genius coming from you is redundant and worth just a pinch of salt

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