The noise of union leaders calling on super trustees to put unions before savers has muffled the quiet crab walking away from a key royal commission recommendation on superannuation.
Industry super funds escaped the commissioner's examination relatively unscathed. Lucrative boxes at the Australian Open, offered by Hostplus to employers to retain business, and large payments to unions were featured but not given much airtime.
You could have thought the royal commission's fairly light touch approach would have been graciously accepted and industry funds would have chosen not to press their luck.
One of the commissioner's recommendations, however, has sent a shudder through the union/industry super movement; the proposal to "staple" a consumer to the first superannuation fund they join when they enter the workforce so that they carry this account with them from job to job.
In its parallel examination of the superannuation system, the Productivity Commission concluded that "stapling" would help protect customers from the $2.6 billion a year in fee gouging and excessive insurance premiums charged on the 10 million duplicate accounts in the system.
The PC was clear that stapling was a superior policy to industry super's counter proposal of "rolling over" customers from one fund to another as they changed jobs.
The PC estimated that "rollover" would introduce $45 million per annum in new administration costs, not to mention the potentially devastating impact to individuals of losing insurance coverage as they acquire pre-existing health conditions as they roll from fund to fund.
Not to be deterred by the clear recommendation of the royal commission, however, the CEO of Australian Super, Ian Silk, sought to rewrite the commissioner's recommendation. In the same breath as cautioning industry funds against hubris following the royal commission he audaciously argued "the mechanism by which [stapling] occurs should be a secondary concern" and that "whether it's the Productivity Commission's proposal or the auto-rollover proposal doesn't matter so much...".
Perhaps more alarming, however, is that Labor's shadow Minister for Financial Services, who is responsible for Labor's response to the royal commission, has echoed Australian Super's line of attack on the royal commission's recommendation. Clare O'Neil responded by arguing that "stapling" was not "diametrically opposed" to the union/industry super push for a "balance rollover" scheme.
Labor, at the behest of unions and industry super, is crab walking away from perhaps the only recommendation that is inconsistent with the interests of unions. It's no wonder Labor didn't put a timetable on implementing this recommendation, as it has done for many others.
This is all occurring in the face of clear and indisputable evidence that the reforms are in the best interest of consumers, and industry fund members, to the tune of $2.6 billion per annum. What could be so important to Labor and the unions that they would be prepared to run the risk of backing union super's interest over the best interests of consumers? The answer lies in the almost $60 million in AEC reported payments that have flowed from industry funds to trade unions over the past decade in the form of ill-defined sponsorship arrangements and directors fees.
It also lies in the unprecedented power unions have over corporate boardrooms across Australia as a result of controlling hundreds of billions in investable retirement savings, a concern recently raised by the Treasurer Josh Frydenberg in a letter to APRA chairman Wayne Byres.
In response, Byres indicated he shares the Treasurer's concern that super funds must not act in the interests of their shareholders: the unions against the interests of savers.
Byres has again asked Parliament for more powers, which to date have not been delivered by the Senate thanks to union pressure.
Currently the spoils of war, the power and money that industry super offers trade unions, are spread evenly across the union movement.
Through the "closed shop" Fair Work Commission process for allocating industry funds into modern awards, every union secures control over a share of the savings of employees in their respective industries. Stapling would blow apart this cosy arrangement.
The losers? Australian Super for one, explaining their attempt to rewrite the royal commission's recommendation to suit their own interests. And any other industry fund where the average employee is older or has previously been employed elsewhere. Undoubtedly the biggest loser of faithfully implementing the royal commission's stapling recommendation is the labour movement and Labor Party itself.
Andrew Bragg is a Liberal Senate candidate