Opinion Pieces

People must be able to choose their super fund

People must be able to choose their super fund

The Australian 12 August 2019

Too many Australians are still banned from choosing their own super fund.

This is thanks to Labor, which as the 2019 election showed, has allowed the unions to pollute their policy platform.

With union representation collapsing to 10 per cent, this flaw in one of the two big parties is undermining the policy choices Australians can select at elections.

From the Retiree Tax to Soviet style pattern bargaining proposals, the Labor platform was wrong for Australia and rejected by the people.

One of the worst policies the unions have foisted on Labor is a lurk which allows big unions and big business to steal workers’ rights to choose their own super fund.

The way it works is, Australia has laws which are supposed to guarantee that workers get to chose their own super fund.

Yet the laws work in a way which allows businesses to agree an “enterprise agreement” that makes one super fund compulsory for all workers in a single workplace or business.

In these agreements, there is no way for workers to change to a different fund. Choice is banned.

Clearly this is wrong. Given it’s a compulsory system and the range of products is so diverse in terms of features, fees and performance, denial of a right to choose is outrageous.

That’s why the Morrison government is committed to ensuring all Australians can choose their own super fund.

It’s hard to believe this is even an issue in 2019. It has been made easier to choose a bank or an energy provider in recent years yet this rort is more entrenched than ever.

There are two often well concealed reasons prior attempts to move on this issue have been stymied.

First, big business is part of the problem.

As someone who has worked in “big business”, it has shocked me how business has become complicit in anti-worker conduct.

These secret deals to steal workers’ rights can only happen if big business agrees. Unions cannot do it without being in bed with bosses.

How can big business call for economic reform and simultaneously stand by this rot?

One outrageous example is a Toll Holdings agreement which bans workers from choosing their own fund!

This deal was examined by the Trade Union Royal Commission. It emerged Toll truck driver Paul Bracegirdle tried to pick a fund other than TWU Super to boost his savings to provide for his daughter.

Bracegirdle’s request was legally denied and he was told by a union offical to “f**k off, no one cares Paul. Go away.”

Yet Labor has defended the unholy alliance of big business and big unions screwing workers out of personal choices.

One of Labor’s economic team members Andrew Leigh initially said last October Labor didn’t know what to think about a proposal to allow people to choose:

“Labor will reserve our position on these proposed choice of fund changes until the Senate committee has reported.”

The Labor Senators subsequently found no choice could be okay:

“As part of these negotiations between employers and employees, many industries determined that there would be benefits to both employers and employees in having all employees contribute to a single fund, often an industry fund.”

Translation: competition is bad.

Worse still Labor Senators said:

“Superannuation remains an evolving industry, and Labor Senators believe that careful consideration should be given to how opening up choice of fund might preclude other innovative product offerings if the risk pooling of membership cannot be achieved.

Translation: less competition will promote innovation! This would make the Soviets smile.

Second, the rationale for enterprise agreements stealing choice of fund rights is superficial. Worse, it is anti-competitiveness cloaked in consumer-protection speak.

The standard argument against change is that workers may not get the same benefits away from the “mandatory” fund.

In some cases, that may actually happen, but it’s certainty no justification for banning choice.

These are the same rent seeking arguments put forward by the insurance industry which wants to keep “zombie” insurance policies in place.

The Productivity Commission says excess insurance premiums cost savers $1.9 billion per annum.

Their argument is the insurance coverage in these agreements may be better than other market options. This logic is especially flawed when considering retail sector enterprise agreements where so many workers are young people without dependents and don’t need life insurance.

The arguments against Australians choosing a super fund cannot be sustained on any consumer basis. The existing laws certainly benefit big unions, big business and the finance sector.

As former NSW Premier Jack Lang said “always back self-interest, at least you know it’s trying”.

It’s time Labor put Australians first and backed our guarantee that Australians can choose their own super fund.

Andrew Bragg is a Liberal Senator for New South Wales

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