Australia’s superannuation industry is languishing behind two dark shadows according to NSW Senator Andrew Bragg.
He highlighted the need for change focusing on better governance and more transparency.
Quoting the Hayne Royal Commission, Senator Bragg said every inquiry by both sides of politics has recommended stronger governance.
He further went on to say sunshine remains the best form of disinfectant and the best disinfectant is transparency.
Senator Bragg was speaking at a Financial Services Council conference in Sydney where he strongly endorsed the government’s implementation of the Hayne Royal Commission.
“One key principle in good governance is that of independence - independence from conflict of interest,” he said.
He quoted an example of one fund which clearly put the interest of shareholders ahead of its members.
“The Hayne Commission highlighted one retail fund’s skimming of $87 million from super accounts by charging 220,000 members ‘service fees’ for which no service was rendered,” he said.
Commissioner Hayne was right that governance and accountability standards failed to meet community expectations.
On transparency, he said it was inappropriate that super fund members were unaware of payments super funds make to so called “registered organisations”.
Registered organisations include unions and employer groups, usually which have a political role in Australian society where disclosure of funding would be expected.
For example, the CFMMEU received $1.45 million in payments from super funds in 2017-18, a 90% increase from the previous year - conveniently just prior to the federal election.
Furthermore, over the last 12 years, the CFMMEU alone has received payments from super funds of over 14 million, the most of any union.
Senator Bragg also warned against opponents for reform.
“Ultimately the only groups that stand against better governance and transparency stand to benefit from the current system – which by Hayne’s admission is too dark and opaque.”
Media: John Mangos | 0401 392 624