Political advertising the democratic right of super funds
Industry Super Australia (ISA) has mounted a strong defence of the ability of superannuation funds to finance political advertising, arguing that it fulfils a vital democratic function and would be almost impossible to prohibit.
While the Australian Securities and Investments Commission (ASIC) has told the Royal Commission that there is probably little value in advertising default funds, the ISA has used its submission to argue that “industry funds are subject to constant attack by retail funds”.
“The trustees of those retail funds, or the firms that own those funds, regularly lobby government for changes in the regulatory framework,” the ISA submission said. “Trustees of industry funds are of the opinion that some of these changes will likely cause significant harm to fund members. Political advertising is undertaken to prevent this harm from occurring.”
The ISA’s submission to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry said that changes to regulations concerning superannuation funds had the potential to significantly reduce members’ retirement benefits.
“It is entirely appropriate, if not obligatory, in those circumstances that trustees both inform members of the proposed changes and take steps to prevent them occurring,” it said.
“… any prohibition on political advertising is likely to be difficult, if not impossible, to implement in practice,” the ISA submission said. “Political advertising is in substance a form of political lobbying, and there will always be political lobbying (of some form) with politicians or senior departmental staff. It would be impossible to seek to prevent such communications from occurring.”
It said any prohibition on political advertising by trustees of superannuation funds would most likely be inconsistent with the constitutional freedom of communication on matters of government and politics.
“Communication on matters of government and politics is an indispensable incident of Australia’s constitutional system of government,” the submission said.
Recommended for you
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.
Morningstar is going to offer research ratings of funds in the $3.5 trillion superannuation sector for the first time in response to demand from financial advisers.
Treasurer Jim Chalmers has opened a consultation into the design of the annual superannuation performance test, canvassing views on a range of reform options.
