Opinion Pieces

When your savings are not really your savings

I have regularly referred to the Albanese Government as the Government For Vested Interests. 

In this government, the super funds and unions run the show. There are three examples of where the super funds are driving Labor’s policies in their own narrow self interest and the government is merely a facilitator. 

The problem with this approach is that the resources of the government are being used to feather the nests of vested interests rather than fighting inflation or boosting jobs through private investment. 

Firstly, under the guise of defining ‘the objective of superannuation’ this Labor government is proposing legislation to permanently lock up your super without exception. 

They will do this by legislating an objective for superannuation which prevents Australians from using their own money for a home. 

This is despite the Treasury’s Retirement Income Review clearly linking home ownership to better outcomes in retirement.

In their “objective” Labor also wants to block you from using your own money in an emergency as occurred during the pandemic. 

Amidst the worst time of the pandemic, it was the super early release scheme which kept many Ausralians afloat. 60 per cent of the funds withdrawn were used to pay down debts and mortgages — people using their own money to improve their own balance sheets. 

Of course, this didn’t suit Big Super which wants to keep our money locked away forever so they can charge endless fees. 

The blatant willingness of Labor to break their election commitment not to tinker with super demonstrates just how entrenched vested interests have become with this government and their policy objectives. 

Yet we know super for housing would increase outcomes in retirement and provide support to younger Australians struggling to enter the housing market. 

Secondly, Labor has facilitated a cover up of key information so members cannot see where their own money is going. 

In his first act as Financial Services Minister, Stephen Jones introduced regulations to remove requirements for related party transactions to be disclosed to members by super funds at their annual meetings. $12.9 million was directed from super funds to the unions during the 2021-22 financial year. 

What Jones and big super funds failed to consider, was the AEC disclosure requirements, which is how we know of these transactions. 

Jones’ decision to take this course was driven by dodgy vested interests. 

My Freedom of Information requests reveal where the idea for this regulation came from. It wasn’t from the Treasury. We now know that the government met and consulted with just one organisation on these anti transparency regulations — Industry Super Australia. 

The impact of the cover up is that super funds have been able to send member statements out without detailing huge transfers of retirement savings to unions. 

I have written to super regulator APRA to remind them of their duty to enforce the law which requires all superannuation money to be solely utilised for the “best financial interests” of members. 

APRA says it is investigating but it is taking a very long time. 

Thirdly, in last year’s budget Labor announced a new policy for big super funds to own more houses. 

At Senate Estimates, it was confirmed the Government would provide availability payments to super funds so that they can purchase houses under the Housing Accord. 

I asked Finance Minister Katy Gallagher what the investment mandate for the Housing Fund would be, and she said it had yet to be resolved. She also could not provide a timetable of any future announcements on the policy details.

Even though no detail about the policy was known, in November 2022, Wayne Swan, the head of the Labor Party and CBUS super fund said: “And to that end I can outline a CBUS commitment of half a billion dollars over five years to support the HAFF, subject of course to all the necessary commercial settings being workable.” 

Mr Swan is not the fund’s Chief Investment Officer but has felt he could commit the members’ money to support the Labor Government’s wooly political objective. To date, there is insufficient detail on this policy. 

There are so many questions. Will these investments into affordable housing will satisfy the best financial interest duty? Will, Labor’s housing fund will step in and provide super funds with availability payments to subsidise the returns on these investments? 

The Government seems desperate to commit Australian tax payers’ money to subsidise investments into housing made with your savings.

The funds will then rent out a house to you that your savings are invested in and your tax dollars have subsidised. In other words, your money can be used to purchase a house which you can never own. 

These warped outcomes are only possible in the Government for Vested Interests where the super funds run the show and Australia’s broader economic interests are ignored. 

Andrew Bragg is a Liberal Party Senator.

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