Tony Abbott's Attack on Workers Super

• General News
• 5th February 2014

Moves by the Abbott Government to interfere in the retirement savings of working people will be met with fierce opposition from unions and industry funds.

Media reports suggest the Coalition is prepared to gut Australia’s world-leading industry superannuation system purely for political reasons.

In the past decade industry funds such as TWU Superannuation delivered an annual return of 7.20 per cent, while so-called retail (private) funds delivered 5.36 per cent.

At the same time industry super customers were only changed 1 per cent of their super balance in fees, while retail funds charge up to 2 per cent.

Last year TWU Super delivered a 16.8% return on its commonly chosen balanced option.

Despite the superior performance of industry funds the Coalition has foreshadowed an attack on the best performing category of super funds.

Why would you attack the governance arrangements of the best performing funds which hold the retirement savings of millions of Australians?

There is no governance or prudential issue here, just a dislike of unions. Sadly some coalition figures see the word ‘union’ and get the red-mist, regardless of the facts.”

This is a transparently political attack on the not-for-profit super system and nothing to do with proper retirement incomes policy.

The superannuation regulator APRA has powers to step in and require changes to the structure of a board if it believes there are any governance issues. It hasn’t done so because the industry funds are well-run and tightly supervised by APRA.

The important thing is that all industry super fund directors are independent of management, unlike in retail funds where Directors are usually an employee of the company that runs the fund. If the Coalition wants to look for governance issues, it should start there.

Industry super funds are run professionally and co-operatively by a combination of employer, union and, in some cases, independent directors. These governance arrangements have served members well.

It is also concerning that, according to media reports, the Coalition is considering changes to the system to favour profit-seeking super funds controlled by Australia’s biggest corporate financial businesses.

It’s obvious Abbott and Co want to look after their wealthy mates in the insurance and financial sectors.