Industry Super Australia (ISA) has been directly targeted by the Minister for Revenue and Financial Services, Kelly O’Dwyer in a scathing Sydney speech in which she has questioned the motivations of some elements of the superannuation industry.
O’Dwyer obliquely but obviously referenced ISA at the same time as claiming that members of superannuation funds “have to stand by and watch as their retirement savings are spent on straight out political advertising”.
Her address to the Sydney forum comes just weeks before the Royal Commission into Misconduct in Banking, Superannuation and Financial Services begins dealing with superannuation funds, particularly around issues involving possible breaches of the sole purpose test.
In doing so, O’Dwyer also suggested a measure of self-interest for superannuation funds which continued to press for increasing the superannuation guarantee from the current 9.5 per cent to 12 per cent – something which she said would mean around $10 billion a year more flowing into the industry in 2025-26.
“Which, of course, means a bonus of hundreds of millions of dollars in fees each year for the industry and ever-increasing salaries for industry professionals,” she said. “And that is before you take into account all that additional money sloshing around for other cultural practices that have built up along the way.”
The minister then clearly referenced industry funds and the ISA by citing the examples of:
- members of superannuation funds having to stand by and watch as their retirement savings are spent on straight out political advertising;
- dubious sponsorships of union congresses;
- superannuation liaison officers who are in fact union officials being paid out of super funds; and
- a lobbying outfit whose principal achievement last year was to stand in the way of the regulator, APRA, getting important new powers to protect members’ money.
In doing so, O’Dwyer argued for more flexible approach based on the fact that the superannuation guarantee wasn’t the only way to increase retirement savings.