The $56 billion industry fund has refused to disclose how much it spent on advertising as funds face greater scrutiny over their use of member money.
In answers to questions on notice from the standing committee on economics, HESTA defended its advertising spend as being important for “educating and engaging members” while refusing to disclose just how much it spent on media campaigns, saying the information was “commercially sensitive” and subject to confidential arrangements with third parties.
“As a prudent superannuation trustee, decisions to incur expenses are made in good faith, for a proper purpose and in the best interests of members,” HESTA said.
“The delivery of such campaigns is often in conjunction with partners, including media agencies and industry groups, with details including cost and expenses being subject to confidentiality.”
However, HESTA said that it engaged third-party agencies to target “existing and prospective members” as well as partnering with lobby group Industry Super Australia to deliver campaigns designed to “protect member retirement benefits from adverse changes, and strengthen the industry fund brand” – activities that would seemingly fall foul of the Your Future, Your Super draft legislation for failing to create a quantifiable financial benefit for members.
“Other strategic discretionary expenditure, such as expenditure relating to building a brand, promoting awareness of the fund or supporting external activities, which are not supported by an identifiable and quantifiable financial benefit to members, articulated in a clear business case, are unlikely to satisfy the requirements of the best financial interests obligation,” the legislation reads.
HESTA also defended its involvement in the loss-making The New Daily, saying that while it hadn’t provided the publication with financial contributions in the past five years, its investment “ultimately supported the core purpose of providing superannuation benefits for (its) members”.
“The purpose of this member engagement activity was to provide members with information about superannuation and ultimately retain and grow the membership to increase scale and benefit from the economies that scale provides,” HESTA said.
“Member engagement campaigns undertaken in the past have contributed to sufficient economies of scale that resulted in reducing unit costs in administration, investment and insurance.”