23 | September | 2020
Senator questions funds’ $429 million cash splash INDUSTRY super funds spending hundreds of millions of dollars on advertising should be subjected to tougher rules to ensure members’ money is not improperly used, a NSW senator has warned.
Thirteen of the 15 industry super funds spent about $429m on advertising and marketing in the past five years, according to analysis of evidence given to a standing committee on economics.
Hostplus, Cbus and AustralianSuper were the top three spenders on advertising, each splashing more than $90m of their members’ money on marketing expenses.
Liberal senator Andrew Bragg says the huge spend on everything from ads to sponsoring football teams should be better scrutinised to ensure funds are not breaching “vague” sole purpose rules that state money can only be used to benefit members.
“On advertising a brand or product that people could invest in, you could make a case that could be potentially a benefit — I’m OK with that,” he said. “But on the idea that a brand that people can’t invest in, like a political brand, should be funded by the members, I don’t think that should be permissible.”
Mr Bragg said advertising should be more tightly monitored by the regulator, the Australian Prudential Regulations Authority (APRA), to ensure compulsory super contributions are properly spent.
“If APRA isn’t going to enforce the sole purpose test, then I think we need to legislate a tougher sole purpose test,” he said.
Funds are also used to pay for the news website, The New Daily, described by Mr Bragg as industry “propaganda”.
But Industry Super Australia chief executive Bernie Dean said advertising was a “cost-effective” way for funds to attract and retain members, with the “benefits of scale” then passed on through lower fees.
“Members also tell us that they expect funds to warn them about possible changes to super that could leave them worse off,” he said.
“Banking royal commissioner Kenneth Hayne examined fund advertising — including political advertising
— and could grasp how it delivered benefits to members and found no reason to change the law or make any adverse findings.”
Mr Dean said the “umpire’s call” might be “frustrating” to Mr Bragg, whom he accused of “trying to push his government into super reforms that would funnel money out of workers’ savings and into the coffers of the banks”.
During the banking royal commission Mr Hayne specifically quizzed AustralianSuper about the use of funds to bankroll The New Daily. Mr Hayne said he did not consider it was shown the spending contravened the fund’s obligations.