What is a trade union? Until very recently the answer to that question seemed obvious to most people, but the emergence during the pandemic of “red unions”, which pledged to support members in challenges to vaccine mandates, suddenly cast it into doubt.
Now the Free Speech Union of Australia (FSU), which does not represent workers in any particular trade, has also staked a claim for union status, maintaining the tax provisions of a registered union apply to its members’ fees.
The FSU launched in December and is unconnected to the red unions.
It describes its mission as “to protect and promote free speech in Australia, as well as defend our members’ right to exercise their free speech” and to “reclaim larrikinism”.
It says it will defend even the most “unpopular or disagreeable opinions”, although not speech that incites violence.
The FSU has so far been most visible as the host of a proposed tour by the Irish TV sitcom writer and anti-trans activist Graham Linehan, who supported the controversial Warringah candidate Katherine Deves in the 2022 federal election campaign. On Sunday UK time Linehan said on Twitter/X he had not been allowed on a plane at London’s Heathrow airport to travel to Australia, because his visa had not been approved.
The co-founder of the FSU Dara Macdonald, formerly of the Institute for Public Affairs, said in a recent podcast the FSU would defend pretty much anyone, but that in the first three weeks of operation all inquiries “apart from maybe one” were about gender pronouns. Her fellow co-founder Reuben Kirkham said the FSU had given advice across a range of concerns, “most of which have little to do with misgendering trans people”, and including matters arising from registered trade unions.
But the assistant secretary of the Australian Council of Trade Unions (ACTU), Liam O’Brien, speaking generally, said unregistered unions were “undemocratic”.
The ACTU secretary, Sally McManus, has called them “fake unions”.
The tax question
The FSU maintains that it fits the dictionary definition of a trade union and that unregistered unions are more effective.
It claims that “trade union membership is generally tax deductible” and that members can claim up to $900 on their tax with a $1,999 membership.
But tax experts say membership fees are only deductible if an association is relevant to how the taxpayer earns money.
Guardian Australia spoke to a top taxation law academic from a leading university, who has published more than 160 papers on tax law. They declined to be named after the FSU asked for their identity to be disclosed before publication.
Speaking generally, they said under taxation law a membership fee was tax deductible if the association’s activities “are directed at advancing the interests of its members in the members’ workplace (eg advocating for higher income, protecting members’ interests like working conditions or safer workplace or providing education on topics relevant to the member’s job)”.
“If the association’s activities are not directed at advancing the interests of its members in members’ workplaces, the membership fee will not be tax deductible under the general deduction section,” they said.
“For example, if the association pursues a political or social objective, there is no deduction.”
The ATO said it could not comment on a specific body.
It said in a statement that people could claim deductions for their industry. That includes union fees if the union is registered, subscriptions to trade, business or professional associations and payment of a bargaining agent’s fee to a union for negotiations on a new enterprise agreement or award.
Kirkham said whether a union was registered or not was “not relevant to the tax question”.
“It is what a union does and the services it provides (or promotes itself as providing) which is relevant,” he said.
Kirkham pointed to a tax ruling that is an expanded version of the above advice from the ATO. It says that the expense has to be relevant to the member’s income, their current employment and that “most trade unions and associations of employees have as their principal objective the gaining of higher salaries and improved working conditions for members”, so there is a required connection to the member’s current employment.
The FSU said it had legal advice that membership was tax deductible, but would not reveal that advice.
Associate Prof Ann Kayis-Kumar, the founding director of the Tax and Business Advisory Clinic at the University of New South Wales, said in general tax deductions needed to be connected to people’s professions and that people should seek professional advice before claiming deductions.
“For people to get comfort and reassurance around any deduction, and whether it’s appropriate, it would be best to talk to a registered tax agent,” she said.
“If anything goes pear-shaped, you as a taxpayer take responsibility.”
Red unions precedent
The FSU pointed to the red unions as examples of non-registered unions claiming tax deductibility status.
The red unions say they have 18,000 members across 14 associations representing nurses, teachers, doctors and others. They use the red ensign flag, the Australian flag designated for merchant ships. It has been adopted by sovereign citizens, anti-government, anti-lockdown and anti-vaccine mandate protesters, and was recently flown at an anti-renewables protest in Canberra.
The managing director of the Red Union Support Hub, Jack McGuire, said the nurses’ and teachers’ unions were set up before the pandemic and the rest after it.
McGuire said as professional associations, membership fees for the red unions were a work-related expense and therefore could be deducted before tax.
“We take the controversial position that if a member pays, they are entitled to a service,” he said.
The ACTU assistant secretary, Liam O’Brien, said such unions had been “established to divide working people”.
“They don’t share the values of unions of solidarity, respect and progress. They are unregistered … and undemocratic.
“Workers should be wary of the promises and services that are offered by unregistered entities. Unions have received numerous reports from workers who have been promised representation that was never provided,” he said, speaking generally.
Kirkham said the FSU was simply offering an alternative to registered unions.
“If [registered unions] were genuinely effective, one would ... presume that they would not strongly oppose competition and the accountability that this brings”.
The federal president of the Australian Education Union, Correna Haythorpe, said workers should be aware that unregistered unions could not offer the same legal and industrial protection as registered unions, such as the right to represent their members at the Fair Work Commission.
“These businesses purporting to be unions are seeking to profit from the important place held by real unions in the Australian community and our legal and industrial systems.
“We would urge caution for anyone who seeks to join one of these organisations in the hope that they are belonging to a union – you are at risk of being deceived [about the extent of the union’s rights],” she said.
The president of the Australian Salaried Medical Officers’ Federation, Antony Sara, said employees wanting assistance with problems under their award needed an organisation registered as a bona fide union, because of the rights and obligations that come with registration.
“It’s a democracy,” he said. “We are not able to prevent the formation of groups, but they need to follow the law in respect of what a union is, how it’s constructed and how it operates.”
