Industry-wide job culling and negative returns from managed investments helped to drive a slide in the operating performance of the Finance Sector Union in 2020.
Financial accounts lodged with the Registered Organisations Commission reveal the union posted an operating loss of A$4.3 million for the 12 months to the end of June.
Since balance date the FSU has embarked on a restructuring program in response to financial pressures caused by the pandemic.
The union did not clarify whether the restructure would trigger wide-ranging job cuts in the national office but confirmed in notes to the accounts that the program would augment costs by $3.6 million.
There was a big increase in redundancy and termination payments during 2020 when the number of staff was cut to 122 from 134 at the end of June 2019.
Salary and other employee costs were lowered by almost 3.5 per cent during the latest reporting period.
The union’s financial performance has been slipping since 2018 when a $1.5 million operating deficit was reported.
In 2019 the FSU inked an operational loss of $2.3 million.
Staff cuts across the banking and financial services sector throughout 2020 crimped income from membership subscriptions, the union’s main source of income.
The FSU had 27,641 members - 880 fewer than the 28, 521 reported at the end of June 2019 – which resulted in a 1 per cent runoff in subscription revenue.
Membership is set to fall further in the current year following recent moves from ANZ and NAB to accelerate branch closures.
However, the economic meltdown triggered by the global pandemic had the biggest impact on the union’s financial performance in 2020 after negative returns from managed investments and sharply lower rental income from commercial property assets.
The managed investment portfolio, which was worth around $26 million at the end of 2019, delivered a negative paper return and is now valued at $22.8 million.
Rental income earned from commercial property more than halved to $192,000.
Despite ongoing operating losses, the FSU still boasts one of the strongest balance sheets within the Australian trade union movement.
The net assets of the union have grown significantly in the last decade mainly because of the rapid appreciation of the market value of property assets and investments.
A 2018 review of the carrying value of land and buildings owned by the union resulted in the assets being revalued by more than 100 per cent.
While donations to the Australian Labor Party were negligible in 2020, the FSU continued to pay affiliation fees and levies to five state branches of the party.
The value of the fees and levies paid to the ALP entities was $169,000 – in line with remittances made in 2019.