Call to break industry fund/IR nexus

20 May 2015

The Financial Services Council (FSC) has pointed to assertions contained in a Trade Union Royal Commission discussion paper about industry funds paying ‘substantial sums' to unions to argue that superannuation must be decoupled from the industrial relations system.

FSC chief executive, Sally Loane, also pointed to suggestions by the Royal Commission that the potential exists for coercive conduct and conflicts of interest in enterprise bargaining and the manner that this might impact superannuation.

"Superannuation must be decoupled from the industrial relations system to avoid these conflicts and to open up the superannuation market to competition and choice," Loane said. "If Australians are forced to save a portion of their salary for 40 to 50 years, they must be allowed to decide who will be the custodian of their money."

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The FSC chief executive reinforced her organisation's policy that all employees should be able to exercise choice of fund and all employers should be able to choose any MySuper product to be a default fund in their workplace.

The Royal Commission discussion paper dedicated an entire chapter to superannuation within which it stated, "Industry superannuation funds pay substantial sums to the unions with which they are associated including directors' fees, reimbursement of director's expenses, office rental, advertising expenses and sponsorship".

The discussion paper then cited the example of TWUSuper for the 2007 to 2014 financial years during which it said the super fund "paid in excess of $6 million to the TWU and its branches."

The Royal Commission discussion paper has opened for debate whether superannuation should be capable of negotiation by unions as an award-related industrial relations issue.

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Past politicians and Labor stalwarts and friends have also benefited personally as Trustees or Executives of Industry Funds at very high fee packages in most cases (for seemingly negligible work) e.g The Hon Peter Collins, Steve Bracks (Chair of CBus being one of 8 Directorships, Chairman's posts, etc), John Dawkins, Dave Noonan, Dave Oliver, Ged Kearney, Paul Howes, Helen Ridout, and, of course David Whiteley (as a Board Member of Funds e.g. CBus, as well as his day job). In fact all mentioned "work" on Industry Funds as a sideline, seemingly, having identified their current other jobs.
No doubt all Trustees/Executives are members of such funds so "for the benefit of members" does apply!!!!
Just add up the contributions from all Industry Funds to all the other associated 40+ Unions and their Trustees (such as described above) and the figure could be astronomic.

$6 million dollars, that's a lot of members money and when claimed as a tax deduction, that's $6million at 15% say $900,000 in tax payers money gonski.

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