It is the role of public servants to implement the policy determined by elected governments. That does not mean the public servants are not entitled to differing views, it simply limits how those views can be expressed.
All of this should have been made abundantly clear as a result of the so-called Austcar controversy in Canberra, wherein there have been allegations of leaking on the part of a senior public servant and, indeed, the alleged fraudulent construction of an e-mail.
And so it goes with superannuation and broader financial services policy in Australia. How galling it must be for people working within the Department of Treasury or, indeed, the Australian Prudential Regulation Authority (APRA) to be implementing Government policy but believing that they might do it better.
The bottom line, however, is that ordinary public servants, whether they are employed within government departments or regulatory authorities, rarely encounter opportunities to put voice to their views. Thus, it is understandable that they utilise a forum such as a recent colloquium held at the University of NSW.
And how much more thrilling it must have been for APRA staffers Wilson Sy and Kevin Liu to have their words published in an august newspaper broadsheet such as The Sydney Morning Herald and ascribed the authority of virtual APRA policy.
Clearly those who so readily embraced the research findings of Sy and Liu failed to read the disclaimer at the beginning of their research paper: “The views and analysis expressed in this paper are those of the authors and do not necessarily reflect those of APRA or other staff.”
Indeed, if the reporters who began treating the research paper as a landmark statement on the part of the regulator had taken the time to read Wilson Sy’s contribution to last year’s University of NSW colloquium, they may have been somewhat more measured in their reportage.
Sy, in 2008, was proposing the pursuit ofa national default approach to superannuation premised on the perfectly valid argument that it would end up saving Australia a great deal of money. Not surprisingly, no one was embracing his 2008 comments as being reflective of a position that might be embraced by the Government.
However, the weight given to the work of two APRA researchers by some sections of the media becomes more understandable in the context of how those in the upper echelons of Australia’s financial services regulators have felt seemingly unconstrained in publicly expressing their own opinions.
While public administration purists might argue that it is not appropriate for public servants to adopt positions that could be construed as partisan, APRA deputy chairman Ross Jones late last year appeared to have no reservations in responding to criticisms of the regulator’s data set by noting “the average retail fund net return has been less than the average net return for other fund types”.
Some might argue there is nothing wrong in a senior regulatory official reflecting the broad outcome of his organisation’s research, but such arguments fail to recognise the prevailing atmosphere and the polarisation that has occurred within the financial services industry with respect to industry funds and retail master trusts.
It is also to be presumed that the deputy chairman of the Australian Securities and Investments Commission (ASIC), Jeremy Cooper, was also surprisingly forthright in expressing his views on the future shape of superannuation because he had been appointed to head up the Government’s latest inquiry into superannuation rather than because he was a senior regulatory official.
Given all of the above, it is little wonder that financial planning industry groups and the representatives of the retail master trusts have on occasion felt they have been campaigning on multiple fronts — on the one hand, they are confronted by a well-resourced and increasingly influential industry funds bloc. On the other hand, they perceive negativity towards them within the upper echelons of the regulators.
Rubbing a little salt into the wound for those on the retail side of the financial services equation, they are then obliged to fund the activities of the regulators by way of substantial levies.
Then, too, the retail financial services industry might reflect upon the fact that its efforts in dealing with government have been splintered and that it has a habit of sending mixed and often contradictory messages.
While financial planners have long railed against the industry funds’ ‘compare the pair’ advertising campaign, they have also added impetus to the industry funds’ campaign by fighting among themselves about the virtues of fee for service versus commissions.
As the wheels of government continue to turn and bring Australia closer to another federal election, financial planners may care to reflect upon where they stand in terms of political influence and policy development.
On the face of it, their views would seem no more valued than those of a couple of APRA researchers, and arguably less publicised.
– Mike Taylor
