CFMEU figures’ overlapping roles may expose union to tax bill

Queensland’s inquiry into the CFMEU is pursuing a case that overlapping roles held by former leaders on related bodies, and the money trail of these back to the union, could be unlawful and expose the organisation to tax liability.

Counsel assisting the inquiry Andrew Meagher KC, leading this week’s hearings probing alleged financial misconduct, will call evidence from two international experts on criminal governance and organised crime, Federico Varese and Paolo Campana.

In an opening statement on Thursday morning, Meagher said this evidence will be relevant to the purpose for which the CFMEU gathered its funds, which “goes to the heart of whether or not the CFMEU properly paid tax”.

This is because under tax law, unions are exempt only if their income and assets are used solely for the purposes they are established for. Commissioner Stuart Wood AM KC noted he had never previously heard an argument the exemption should be removed.

Meagher said he had not either, “but that’s what we’re interested in inquiring into”.

Wednesday’s evidence from forensic accountant Natalie Faulkner laid out a number of related entities, linked to the CFMEU through workplace agreements and shared officeholders, which delivered revenue to the union.

On Thursday morning, Meagher said that where office holdings overlapped, the union figures’ knowledge became that of the other entities “as a matter of law”.

“That becomes relevant because, for example, a charity can only distribute in accordance with its objects for charitable purposes,” Meagher said.

“But, if in truth, the charity knew the purpose was not charitable, it would become taxable. It might also be a breach of other laws – and I just mentioned, in passing, corporations law, competition law, and trust law.”

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