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.
