ISA surprised by govt reaction to ad campaign
Industry Super Australia expressed surprise at the Federal Government’s reaction to its advertising campaign against banks moving into the superannuation space, saying the Government’s rush to defend bank lobbying efforts illustrated a lack of balance.
Reacting to a statement put out by Minister for Revenue and Financial Services, Kelly O’Dwyer on the advertising campaign, which she labelled a union scare campaign, ISA said the advertising campaign blew the whistle on banks’ attempts to tilt super rules in their favour.
ISA chief executive, David Whiteley said industry super funds were jointly governed by representative trustees “drawn equally from employer groups and unions”, and this partnership was the reason for the funds delivering superior returns.
“It is disappointing the Government overlooks these facts as it attempts to slur some as the country’s highest performing funds that collectively manage half a trillion in assets for more than 5 million members”.
“The Government should focus its scrutiny on the chronic and unexplained underperformance of bank-owned super funds over the past twenty years rather than providing an open door for their lobbying efforts,” he said.
ISA used SuperRatings data to state industry funds had outperformed bank-owned funds by 2.02 per cent over three years, 2.16 per cent over five years, and 2.05 per cent over seven years.
Whiteley also said banks had looked to change laws to suit their vertically integrated business models since 2014:
- In 2014, banks looked to dilute financial advice consumer protections and the Government presented legislation to this effect;
- In 2015, banks looked to change the governance model of industry super funds, and the Government presented legislation on this; and
- In 2016, the Government asked the Productivity Commission to consider alternatives to the Fair Work Commission process to appoint default funds. ISA said the banks opposed the role of the Fair Work Commission in appointing a safety net of workplace default funds.
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