Regulations relating to requirements for superannuation funds to disclose expenditures in annual members’ meeting notices have been updated.
Following a month-long consultation period, the Minister for Financial Services, Stephen Jones, confirmed that updated regulations will still require super funds to itemise all expenditures on political donations. However, the requirement for funds to itemise expenditures on unions and industry bodies has been abolished, with non-political donations only required to be detailed in aggregate.
Included in the non-political donations pool is marketing spend, with the new regulations freeing up funds from having to provide itemised information about their multimillion-dollar marketing deals.
Funds now also have the option to provide contextual information in their short-form summary of expenditures.
“The government believes the updated regulations approved today strike the right balance between reducing the regulatory burden on funds and public expectations of transparency,” Mr Jones said.
However, in a statement issued late last week, Senator Andrew Bragg accused the government of trying to conceal millions of dollars in payments from super funds to unions.
“The regulations made by Minister Jones today will mean that by 2030, $30 million in payments from super funds to unions will be aggregated and not separately disclosed.
“It is hard to imagine a more brazen legislative initiative,” Mr Bragg said.
Citing data from AEC, the Senator disclosed that in 2020–21 almost $13 million “flowed from the super funds to the unions”.
“This will balloon to $30 million by 2030,” he said.
“Now it is up to the Senate to decide whether it will stand for transparency and integrity in compulsory superannuation,” Senator Bragg added.
In a separate statement made on Monday morning, Mr Bragg confirmed that he has lodged a freedom of information request (FOI), seeking information on, among other things, “documents detailing the estimated cost saving the industry may be able to benefit as a result of these regulations”.
‘Inadequate scrutiny’
In its submission to the government’s consultation, Super Consumers Australia argued last month that Labor’s proposals provided inadequate scrutiny.
“Despite industry complaints of regulatory burden, we have not seen any concrete evidence to substantiate this notion,” the group said.
“As part of this consultation, we expect superannuation funds to provide credible evidence of the cost of disclosure. This will allow public scrutiny of the merits of moving to aggregated disclosure only.”
The Law Society of NSW shared a similar sentiment, noting in its submission it does not support the draft regulations in their current form.
“We submit that the correct balance between reducing regulatory burden and providing accountability and transparency has not been achieved with the removal of the requirement for itemised disclosure of expenditure under subregulation 2.10.”
The group also argued that the explanatory statement for the regulations did not provide an estimate of the costs or projected costs to superannuation trustees that would arise from complying with the current regulations, which were only introduced in August 2021.
