The standing committee on economics has doggedly pursued super fund executives for dozens of perceived breaches of director duties and the sole purpose test. The problem is they haven’t found much.
The latest iteration of the standing committee on economics, set up to scrutinise the financial sector in the wake of the harrowing Hayne royal commission, has played a vital role in ensuring that Australia’s largest institutions – the big banks and super funds – are giving everyday Australians a fair go. The committee has quickly become an institution, raking Westpac, AMP, and even ASIC, over the coals for catastrophic governance failures.
But one area where the standing committee has failed to gain much ground is superannuation.
The Labor Party has often sought to defend those industry funds called before the standing committee, with deputy chair Andrew Leigh branding the proceedings a “witch hunt” that wouldn’t find anything that the royal commission hadn’t – in other words, very little. And while Labor has often been accused of holding an ideological bias in favour of the industry funds, an objective reading of the questions put to super funds after their appearances before the committee demonstrates that some of chair Tim Wilson’s claims sit on very shaky ground.
Over the last year, questions on notice have come to encompass hypothetical spending on art collections and spurious allegations about “union-aligned industry funds” bullying CSL chairman Dr Brian McNamee into silence over his stance on Victoria’s stage four lockdown – allegations that Dr McNamee himself requested removed from the media, as per AustralianSuper chief executive Ian Silk, who contacted the chairman to check the veracity of the claims.
A campaign against super fund illiquidity and lack of member diversity at the height of the government’s early release scheme also failed to find evidence of financial mismanagement, despite senator Jane Hume’s insistence that the scheme would reveal which funds, in the words of Warren Buffett, “had been swimming naked”.
Meanwhile, Rest refuted to InvestorDaily allegations by standing committee chair Mr Wilson that an executive had engaged in “quasi-insider trading”, while other funds – including UniSuper – have sought to remove any doubt that untoward switching occurred at the heights of the COVID-19 crisis. And while ASIC has said it will investigate the claims, it has so far found no breaches.
These apparently ideological campaigns undermine the legitimate work of the government and its Your Future, Your Super reforms, which seek to prevent funds from wasting member money on advertising that doesn’t create benefit and political donations. These reforms are hard to argue against – and so far, the superannuation sector has been co-operative. Looking for bad behaviour where there isn’t any is a waste of time and resources that would be better spent on areas where there are clear deficiencies.