Industry funds’ expenditure on govt radar
The Federal Government has indicated it will be cracking down on industry funds by compelling them to provide transparency in the way members’ funds are being expended.
In an interview with the ABC, the Minister for Revenue and Financial Services, Kelly O’Dwyer, said the government would introduce changes that were broad ranging to provide more accountability and transparency on how members’ money were being used.
However, she emphasised the changes would apply across the board to corporate funds, retail funds and industry funds.
“We are going to be giving the regulator strengthened powers to be able to ensure that members’ money is spent in their best interest because let’s not forget, if funds are not spending money in members’ best interest, that has a compounding impact over time and it ultimately means a lower retirement income when people need to draw down on those funds…” O’Dwyer said.
She said the regulator did not have sufficient information on how money was being expended, for example, in relation to sponsorship activities, and there was no detailed breakdown on how the money was being used. She cited reports which stated “certain funds that were kicking back for instance, over $1 million to the union movement, and some of that’s to do with sponsorship money”.
“Let’s not forget that during the Trade Union Royal Commission that was recently held, we heard evidence that there were superannuation liaison officers who were being paid $96,000 for two days’ worth of work,” O’Dwyer said.
“That money was going directly back to the union movement and when put on the stand and questioned about this, a particular officer who was being paid this amount of money couldn’t justify that this was in members’ best interest.”
Recommended for you
With just 30 per cent of Australians knowing their superannuation balance to the nearest $1,000, Findex has emphasised the role of financial advice in addressing the critical super knowledge gap.
Underestimating the cost of insurance by almost $75,000 in a Statement of Advice is among multiple reasons that a relevant provider has faced action from the FSCP.
Financial Services Council chief executive, Blake Briggs, is urging Minister for Financial Services, Stephen Jones, to take advantage of the QAR opportunity to reduce regulatory duplication and ensure advice is affordable.
Former chair of the House of Representatives’ Standing Economics Committee, Tim Wilson, is planning a return to politics after losing his seat in the 2022 federal election.
