The Government’s claims to improve members’ outcomes in super might have some credibility if they were backed with evidence rather than embarking on an unprecedented ideological attack on the best performing part of the sector, industry super funds.
Rather than put forward credible evidence how its proposals will improve member returns, particularly in chronically underperforming parts of the industry, the Government has resorted to dog-whistling about the role of unions on trustee boards.
The Government’s latest focus is fully disclosed director fees paid to union trustees and, oddly, the budget of Industry Super Australia, which it incorrectly asserts are spent on ‘lobbying efforts’. (‘Making Super Safer’, The Australian, 14/11/17).
The Government’s Bills before the Senate:
- Fail to fix unpaid super;
- Fail to fix undisclosed investment fees and costs gouged from retail super fund members;
- Carve out the majority of bank-owned super fund assets from a new outcomes test; and
- Seek to dismantle the successful representative trustee model of industry and other profit to member super funds.
The government has failed to present evidence that these Bills will improve the retirement incomes because there is none.
In the two years since the Government last introduced the Trustee Governance Bill to the Australian Parliament, ISA estimates that the ANZ, National Australia Bank, Commonwealth Bank, Westpac, Macquarie Bank and AMP have collectively paid over $545 million in compensation and refunds as a result of admitted or alleged misconduct – much of it in wealth management and super. Industry super funds have not had to pay a single cent.
Yet despite this evidence, Minister Kelly O’Dwyer has pledged to: “lift superannuation funds to at least the same standard as other financial services organisations like banks and life insurance companies” (AFR, “Super industry laughs at O’Dwyer”, 23 Nov 2016)
In the public interest, the Government should now withdraw their ideologically driven legislative attack on industry super funds and sit down with the superannuation industry and maturely discuss how to improve the wellbeing of the millions of super fund members.
Working with, not against industry super funds, the Government could achieve breakthroughs on unpaid super, gender equity in retirement incomes, the development of post-retirement products, consumer friendly disclosure, and realise the potential of investment in agriculture, infrastructure and affordable housing.
David Whiteley is available for interview. Media contact: Phil Davey 0414 867 188.
Industry Super Australia provides policy, research and advocacy on behalf of 16 not-for-profit Industry SuperFunds who are the custodians of the retirement savings of five million Australians.