What exactly is Kelly O’Dwyer trying to achieve?
During the frenzied negotiations about “media law reform”, aka “Murdoch monopoly media”, and the distraction provided by the release of previously confidential papers of the deceased former High Court judge Lionel Murphy, Financial Services Minister Kelly O’Dwyer quietly introduced legislation to force industry superannuation boards to ensure a third of trustees are independent and that an independent chairman is appointed.
Ms O’Dwyer is the latest minister to be given the task of trying to sell this previously rejected legislation as some kind of protection for members but, as revealed on the 7:30 Report on Friday night, the real aim is to decrease the money going to unions from trustees’ fees paid to union representatives who currently make up 50% of industry super fund boards.
Apparently the Liberal Party think those fees, earned by managing employee’s funds, should not go back to the unions that represent those employees – it should go into the pockets of “independent” directors and a chairman who is to be appointed by…ummm…not sure, but George Brandis is certainly on a roll finding jobs for stray Liberals.
Because, if unions get their hands on any of the profits made from investing the superannuation they fought for their members to be paid, they may donate to Labor Party campaigns. Well duh….the party was formed to represent workers so for workers’ collectives to contribute to their campaign is hardly questionable or surprising in any way.
Not fair cry the party who is supported by big business and rich individuals. Our poor PM had to kick in millions himself. Wadda guy!
Whilst they receive large donations from those with skin in the game, they really resent any collective power or voice for the worker.
So are there problems that need fixing?
The top 10 performing growth super funds for the 2016/2017 financial year all delivered returns of 11.8% or higher, and consist of 10 industry super funds.
On average, industry funds achieved a return of 10.3% which was 2% higher than retail (bank) super funds.
Eight of the top ten performing super funds over ten years are industry funds.
Chief executive of Industry Super Australia, David Whiteley said the Government was giving banks a “leave pass” on transparency and disclosure requirements.
“Rather than dealing with the big issues like the superannuation gender gap and unpaid superannuation, it appears the Government has caved in, dismantling the successful industry super governance model,” he said.
Considering the Coalition’s history on superannuation, it is very hard to believe that they have the workers’ best interests at heart.
In 1985, the government and the ACTU struck a deal which saw the trade union movement forfeit a claim to 3% productivity improvement as wages to instead be paid in compulsory superannuation – endorsed by the Arbitration Commission and managed by superannuation funds with equal representation of the unions in the industry and the employers.
Then Leader of the Opposition, John Howard, said this:
“That superannuation deal, which represents all that is rotten with industrial relations in Australia, shows the government and the trade union movement in Australia not only playing the employers of Australia for mugs but it is also playing the Arbitration Commission for mugs”.
The Coalition has steadfastly opposed every increase in compulsory superannuation since that time, most recently postponing/abandoning the scheduled gradual increase in the superannuation guarantee from 9.5% to 12%.
Let’s not be mistaken here about the real reasons that Ms O’Dwyer has hit the airwaves.
- The Liberals want to cut the ability of unions to donate to Labor campaigns
- The banks don’t like the competition from better performing funds.
- There are so many Liberal Party apparatchiks looking for board positions
- Kelly O’Dwyer is under cross-factional attack in her own electorate, ironically, for her last go at superannuation reform where the government hit superannuants with a $1.6 million cap on the amount of tax-free super savings a person can hold in retirement. Other controversial changes included a decision to cap after-tax contributions at $100,000 a year. That did NOT go over well in Higgins and they have to compensate for the drop in donations somehow.
22 comments
Login here Register here-
Max Gross -
captainwise -
helvityni -
casbar -
Terry2 -
Leep -
Stuart Errol Anderson -
Ricardo29 -
Kaye Lee -
roma guerin -
Kaye Lee -
Zoltan Balint -
Kaye Lee -
jimhaz -
Matters Not -
Florence nee Fedup -
Zoltan Balint -
Aortic -
lawrencewinder -
Keith -
Kaye Lee -
Glenn Barry
Return to home pageScam, swindle, rort: pure LNP!
In the whole history of the coalition they have never done anything to improve the position of the workers, it is completely against their grain.
I saw Kelly somewhere (7.30 ? )and thought her maternity leave must have come to an end; go and have another one….
Not happy to pay retirees a pension from government coffers. Superannuation introduced. Not happy that retirees manage to squirrel away more than AUD 1.6million tax free superannuation dollars; LNP tax above that. LNP (AGAIN – groan!) unhappy that some citizens are working and budgeting hard to contribute more than AUD 100,000. EXTRA – OF THEIR OWN MONEY to their superannuation funds without that being capped. So, they are mean, bitter, horrible elitists; vindictive to the core and jealous of anyone ELSE who gets ahead if it is not them.
I really don’t understand what an independent director/trustee would look like : if truly independent with no conflicts from previous work or business experience that person would probably be less that useful.
I seem to recall that Kathy Jackson was a superannuation fund trustee and she is certainly no recommendation.
Incidentally, Jackson a coalition hero, finally fronts court on 13 November. Has there ever been as case of justice delayed to such an extent after a civil action had already provided all the forensic evidence of theft and misappropriation ?
I wonder will Christopher Pyne be a character witness ?
The hypocrisy of the liberal/national and their born to rule mantra saying what we do for all u workers will be good for all of working men and women gets me so frustratingly angry and I feel so helpless at my impotence. Just one thing keeps me going we live in a democracy and I hope there is enough like me to vote them out.
“the real aim is to decrease the money going to unions from trustees’ fees paid to union representatives who currently make up 50% of industry super fund boards.” No this assumes that trustees fees paid to union representatives are donated back to unions. Does anyone know what percentage is donated back to unions? Some would be, but I wouldnt be surprised if those fees were the incomes of those representatives, and they would be donating a small portion back.
In any case I think the real reasons are;
1/ ‘independent’ directors would be from the finance industry, and would amount to a take over of industry super by the Banks. The Banks want to milk our funds for super profits. This is the real reason
2/ The LNP is doing what they accuse the unions of ; ‘independent’ directors would donate back to the Liberal party.
A very good report from Matt Peacock on 7.30, exposed the proposal for what it is, a purely ideological attempt to boost returns to the LNP and reduce union influence over Super. Kelly O’Dwyer couldn’t lie straight in bed and the Lib mouthpiece made the issue clear, they don’t like money going to unions. I hope this gets knocked back by the Senate again ( triggering another DD, ha ha)
Stuart, I am not sure but this is from the 7:30 report transcript
“Unions appoint the board members who then collect directors fees and feed them straight back to the unions. Government sources claim it is worth $8 million a year, a substantial election war chest that is expected to grow exponentially.”
MATTHEW LINDEN, INDUSTRY SUPER AUSTRALIA: We see in the banks where they have majority independent directors, they have been incapable of ensuring that those institutions have got the right culture and values and that is exactly the sort of thing that we need to avoid in superannuation.
http://www.abc.net.au/7.30/superannuation-changes—greater-transparency-or/9020726
Thanks for clarifying this for me. I hope the Senate knocks it back.
a person with $200,000 in their super account in 2016 would have received $16,400 from a typical industry fund, but just $13,800 from a bank or AMP owned fund.
That is a difference of $2,600, which is not huge in itself, but if that person is say 40, with around 25 years left to work, the underperformance of retail funds really bites.
Combine regular underperformance with the power of compounding and it is not hard to calculate how a person in a retail fund could be well over $100,000 worse off at the end of their working life compared to a person in an industry fund.
“industry super funds – with their equal representation boards, low fees and member-first ethos – consistently deliver. The trustworthy and high performing industry super fund model is clearly one of the very best in the world. There is no reason to undo it, and every reason to build on it.”
Payments to financial planners and profits to shareholders make it hard for the banks and AMP to compete with industry funds on a level footing.
But Chant West said the difference in performance goes deeper than that.
It pointed to industry funds having a lower exposure to the share market and a higher exposure to unlisted assets, such as private equity, property and infrastructure.
“Over the longer term, the asset allocation policies of industry funds have served them very well,” said Mr Chant.
http://www.abc.net.au/news/2017-01-20/superannuation-funds-grow-industry-beats-retail-again/8196894
The LNP knows that industry funds have so much money and as all funds are finding there are limited things to invest in. The only thing left is to build things that private business does not and this would be in direct competition with them. So industry funds need to be stopped from competing with private investors. If the workers own the business that make or provides the service the worker needs the worker gets the profit that business makes. This would be so Socialist.
This so-called small government that champions deregulation dissolved parliament so they could impose more regulations on unions. They are trying to limit political donations from unions. And now they want to interfere in the running of industry super funds that were specifically set up through co-operation between unions and employers to bypass the middleman financial advisers.
O’Dwyer says this is about transparency and accountability – the same reason they gave for the registered associations act. But ask her about transparency and accountability in government and listen to the trite phrases spew forth – commercial in confidence, operational matter, national security, international relationships, within entitlements etc etc. Mention a Federal ICAC and all of a sudden there is no need for any transparency and accountability is not a word that can in any way be applied to government where it is always someone else’s fault.
[‘independent’ directors would be from the finance industry, and would amount to a take over of industry super by the Banks. The Banks want to milk our funds for super profits. This is the real reason]
I also believe that these so called ‘independent’ directors would use the insider knowledge to make Industry funds less competitive using artificial trading methods. If they know when and how much the funds will be investing in individual companies they will work out ways to shift that potential investment profit to the big finance companies. Ie if they know X fund is going to put 1b into Woolworths, they’ll quickly buy up Woolies shares so that the funds pay more per share thus less capital gain.
But the destruction of the culture will be the big issue. The independents will be ticket clippers with no morals when it comes to personal profits. Like after the energy companies were privatised or the Uni Chancellors began to be picked from business – the whole culture of “doing the right thing” will go out the door and we will see fees increase dramatically and performance decline.
As the union rep vote will be cut from half to a 1/3 and we know employers will side with the “independents” it is effectively the death of true Industry Super funds.
I don’t mind some form of independents on these fund boards, as I would be sure that some funds have elements of foul play and gravy training, but you do not require more than 15% as independent. All that you are seeking is whistle-blowers, not so much vote controlling board members.
If this gets through, then the ALP should really start promoting caps on election spending. Perhaps this will be a catalyst.
Yes Ms O’Dwyer has an ideological solution in search of a problem. It’s well known that Industry Super Funds out perform other funds, particularly in the longer term , which is what superannuation is all about. Banks and other financial institutions simply do not have the track record to compete successfully – with monies creamed off via commissions, fees and the like. But they would like their chance to compete which is currently not on the table.
Banks et al recognise that knowledge re superannuation only becomes important (for most people) when retirement is on the horizon. There’s a significant period of one’s working life when people don’t really care – when they can be sold superannuation products. That’s where the industry wants its chance. The chance to sell. The chance to compete in the selling stakes – knowing full well they can’t compete in the financial return stakes.
Liberals have fought against industry super since day one. They are terrorfied that unions may gain some money from the part they play.
Workforces and all Liberal actions against unions have left them withhout power, now that withhilding one’s labour, striking is impossible. All actions take place it the courts, take money. More than workers can contribute out of their pockets.
Hasn’t helped that industry super has been well run, efficient and profitable for workers.
The unions are workers that share profits from super.
If transparency was required in political life nothing would be done as they would have to tell us whom they serve what they want to do and why. If that was the case they would also be required to do what the people want done.
Kaye, love your work, but your headline is an oxymoron.
Shadd-uppa-ya-face, O’Dwyer couldn’t actually explain on “7.30” how this was going to benefit the superannuants who are currently better off in industry schemes than in the private and banking ones…. sounds like another NBN as The Ruling Rabble mismanage another project and destroy a good scheme.
This is priceless, though very unfortunate. Turnbull has “… blamed low wage growth for the worst monthly drop in consumer spending since 2010.” It is not long ago that the LNP advocated for a reduction in penalty rates. Prices are going up of necessities, and many citizens have high debts. There are clearly more important economic matters than taking an ideological swipe at superannuation.
http://thenewdaily.com.au/money/work/2017/10/06/retail-spending-turnbull/?utm_source=Responsys&utm_medium=email&utm_campaign=20171006_PM_Update
Keith,
Senior executives in Prime Minister Malcolm Turnbull’s own department have received pay rises of up to 12 per cent a year – the pay of senior executives jumped from $296,000 to $335,000 and from $316,490 to $349,841 between 2014-15 and 2015-16.
The Secretary of the Department of the Prime Minister and Cabinet, Martin Parkinson and Treasury Secretary John Fraser are now on salaries of $861,000 and $840,000 respectively. Dr Parkinson’s deal is 70 per cent more than former secretary Peter Shergold received a decade ago.
Human Services head Kathryn Campbell has had her pay rise by 7.5 per cent at the same time as her staff negotiated a 2 per cent pay deal. She was the woman who oversaw the Centrelink robo-debt debacle.
But those students and women who work weekends just for the penalty rates are really ripping us all off.
If the Industry super funds were under-performing, there might be a question to be answered.
They’re not, they’re outperforming, consistently, over the long term, so there is no question to be answered in relation to them.
Banks are under-performing, under investigation for criminal offences by three separate statutory authorities , have appalling public profiles and there is complete recalcitrance on the issue of a Banking Royal Commission.
Yet another LNP grasp for the cash – there’s a reason why they’re flat broke, they’re still unwilling to accept the truth…
I wonder if Kelly O’Dwyer questioned the strategy of her mission and her chances of surviving it?