Industry super funds 'cashed-up activists’

Thursday, 13 July 2017

Industry super funds 'cashed-up activists’
The Liberal Party’s acting federal director Andrew Bragg. Picture: AAP

Original article by Brad Norington in The Australian:

The Liberal Party has escalated a campaign against the nation’s industr­y superannuation funds, claiming its analysis of $50 million paid to unions over a decade provides evidence of “brazen” political backing.

The Liberals’ acting federal direct­or, Andrew Bragg, told The Australian he regarded industry super funds as “cashed-up activists” such as GetUp!, because ­retirement savings were being direct­ed to Labor-aligned unions.

Mr Bragg said fund members deserved to know how their retireme­nt money was used.

He said an analysis of Austral­ian Electoral Commission data on the Liberals’ new website “The Fair Go”, which has highlighted $50m transferred to unions, helped give more transparency.

According to the Liberals’ collat­ion of AEC disclosures, the militant Construction Forestry Mining and Energy Union was the biggest recipient of super fund payments, receiving $12.4m from 2007 to last year from First Super, CBUS and other funds.

Close behind was United Voice, a union representing cleaners and other low-paid workers, paid $10.1m by Host Plus and Australian Super over the decade. The Australian Workers Union, formerly led by Bill Shorten, was paid $1.8m by Australian Super, CBUS, AustSafe and ­others. The Transport Workers Union received $7.1m from a single­ fund, TWU Super.

In its final report, the recent royal commission into trade union corruption was critical of the TWU for compelling employers to pay super contributions of workers only to the union-backed fund, with the result that it “provides­ a large income stream each year to the TWU”.

The Liberals’ website says it accepts “there is no doubt” ­that industry funds are strong performers. But it is highly critical of industry fund boards as “opaque structures”. It attacks a “brazen” use of the industry super brand so money can be directed to unions as “minority interests skew­ing our public policy debate”.

Under Mr Bragg’s direction, the Liberals are escalating their campaign after releasing details of the $50m handed to unions in April to The Sunday Telegraph. Research of AEC data for the website is a project separate from the Turnbull government.

But senior Liberal sources told The Australian that Financial Services Minister Kelly O’Dwyer was expected to outline details of proposed changes to superannuation governance rules soon, after legislation to impose independent directors on industry super funds was blocked by Labor and the Greens in the Senate.

The Liberals also want to stop industry super becoming the “default” fund for workers so there is “more competition and choice” from super funds run by banks.

Industry funds hit back at Mr Bragg yesterday, claiming the Liberals were wrongly categorising as alleged political contributions the legitimate transfer of $40,000-$50,000 in annual direc­tors’ fees by union officials, who gave the money back to their union as standard practice and did not take it as income.

Further super fund money that went to unions was legitimate marketing, including sponsorship of conferences.

They also accused Mr Bragg of campaigning against industry funds as the immediate past policy director of the Financial Services Council, which represents commercial competitors in direct opposition to industry funds.

Only in rare cases, such as the example of jailed Health Services Union leader Michael Williamson, did union officials pocket their director’s fees.

The director of Public Affairs Industry Super Australia, Matthew Linden, said industry super funds complied fully with disclosure requirements and were run only to profit members — unlike bank-owned super funds.

• MORE: The Fair Go site

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