There is going to be a lot of talk in parliament this week about integrity, transparency and accountability.
The government will be introducing long-awaited legislation to establish a federal integrity commission, something that is well overdue and that Australians want to see up and running with real power.
But it’s not the only transparency measure on the agenda.
Today I will also be moving a motion in the Senate asking that recent changes to regulations governing superannuation fund disclosures in annual members statements be disallowed.
What’s this all about?
Each year, around this time, superannuation funds issue notices to all their members of annual meetings.
The former government introduced regulations that required all superannuation funds (industry and retail) from this year to include a fully itemised list of expenditure on: any political donations, marketing, payments to industrial bodies, as well as payments to related parties.
The first act of the Assistant Treasurer and Minister for Financial Services, under the new government, was to issue new regulations winding back this transparency requirement. The new regulations allow super funds to disclose all of this expenditure as an aggregated amount. We can see the total amount spent in these categories, but not where that money is going.
Following an early backlash to this move in the draft regulations, the government has issued final regulations that still require funds to disclose a fully itemised list of political donations, but only publish aggregated amounts for the other categories.
Both the timing and the content of these changes raise concerns. I have received an enormous amount of correspondence from people in the ACT worried about what this means for where their super fund is spending their money.
The government‘s public reasoning is that a requirement for a fully itemised list across all categories would impose high compliance costs, ultimately borne by members. But funds are already required to report all of this information to APRA, the regulator. Why then is it an extra compliance cost to also disclose it to their members?
I have listened to the arguments from both sides of this debate.
The government, unions and industry super funds, running off similar talking points, argue the regulations introduced by the former government are poorly drafted, create an unduly onerous compliance burden and were ultimately created for use as a political weapon.
The opposition (unsurprisingly) argues the opposite. They say super funds are used as a vehicle for donations but in less obvious ways than just via political donations.
Unions argue their presence (and associated director fees) on boards help ensure good outcomes for super fund members.
Consumer bodies express concerns that the current government’s wind back of the previous government's measures go too far. That we need a greater level of transparency over how funds are spending their member’s money. I think they are right and the truth likely lies somewhere in between the two major parties' views.
A number of funds have shown greater disclosure is possible. Prime Super and Commonwealth Super Corporation are two recent examples. They’ve both released detailed lists of their expenditure on marketing, sponsorship and director fees.
It’s important we find a balance that puts transparency first.
I respect the work of Greens Senator Nick McKim in seeking to negotiate a solution with the government on this issue. My argument is that if these regulations are not disallowed while the Senate is still able to do so, there will be no leverage to negotiate a better deal and more transparency for Australians about where and how their money is being spent.
If I can get the support of the Greens, the Coalition and the rest of the Crossbench, we will have the numbers to make this happen.
Disallowance would put us in a place to negotiate a better, more balanced outcome with the government that truly serves the best interests of members.
People want more transparency, not less. Especially when it comes to Australia’s $3.3 trillion superannuation industry.
I believe super fund members should be able to see where their fees go, and how that money, their money, is spent.
Anyone watching the men’s AFL grand final on the weekend would have seen prime time super advertisements.
This is a massive industry with huge power. It is really important we keep that power accountable because people’s retirements rely on a well-regulated, high-performing sector.
There are so many reform priorities needing attention in this space, from chasing down the hundreds of millions in unpaid superannuation entitlements, to reforms that will stop super being misused by wealthy individuals to pay less tax.
These reforms should be the priority, not reducing transparency in super fund spending, and I will be encouraging the government to take it on at the earliest opportunity.