THE federal opposition has stepped up calls for the finance regulator to investigate whether a planned advertising blitz by industry-backed superannuation funds could be considered politically motivated.
BusinessDay last month reported that a business owned by the 16 industry superannuation funds is planning a multimillion-dollar advertising campaign highlighting investments in clean energy.
It has been planned to coincide with the Gillard government's advertising campaign on the carbon tax.
The opposition finance spokesman, Andrew Robb, has written to the Australian Prudential Regulation Authority chairman, John Laker, arguing that such a campaign could erode confidence in the nation's superannuation system.
The $2 million advertising blitz is to be fronted by Industry Funds Management, an asset manager that is owned by the nation's 16 industry superannuation funds. IFM manages almost $30 billion in retirement savings on behalf of 5 million members.
It owns a number of clean energy companies, such as Pacific Hydro, and wind farms.
"Any suggestions that industry funds or their subsidiaries are planning advertising campaigns that could be deemed to be politically motivated without the approval of members serves only to erode public confidence in the system," Mr Robb said in the letter, obtained by BusinessDay.
"Unlike individual holdings in listed companies where shareholders have the option to simply sell shares in entities which act in ways that do not meet their approval or performance expectations, the members of industry superannuation funds held in trust do not have that same flexibility."
Industry Super Network, the lobby arm of the industry super funds, has defended the proposed campaign, saying the reference to a "clean energy future" is in the context of the full range of IFM infrastructure assets. This includes airports, ports, railway stations, wind farms and hydro projects.
An APRA spokesman declined to comment on Mr Robb's letter, saying the authority had a policy of not discussing operational matters.
Frequently Asked Questions about this Article…
What is the industry superannuation funds' advertising blitz about?
The planned $2 million advertising blitz is being run by a business owned by the 16 industry superannuation funds and is designed to highlight investments in clean energy and infrastructure. The campaign is scheduled to coincide with the federal government's advertising on the carbon tax.
Who is behind the advertising campaign and what is IFM?
The campaign is fronted by Industry Funds Management (IFM), an asset manager owned by the nation's 16 industry superannuation funds. IFM manages almost $30 billion in retirement savings on behalf of about 5 million members.
Why have politicians called for an APRA investigation into the campaign?
The opposition finance spokesman, Andrew Robb, wrote to APRA’s chairman arguing the campaign could be politically motivated and that such advertising without members' approval could erode public confidence in the superannuation system.
What specific concerns did Andrew Robb raise about the campaign and members' rights?
Mr Robb said members of industry super funds, whose savings are held in trust, do not have the same flexibility as shareholders to sell holdings in entities whose actions they disagree with. He argued that politically motivated advertising by funds or their subsidiaries could undermine trust in the system.
How did Industry Super Network respond to criticism of the clean energy ads?
Industry Super Network defended the proposed campaign, saying references to a 'clean energy future' reflect the full range of IFM’s infrastructure assets, including airports, ports, railway stations, wind farms and hydro projects.
Has APRA commented on the request for an investigation?
An APRA spokesman declined to comment on Andrew Robb’s letter, noting the authority has a policy of not discussing operational matters.
Which clean energy assets does IFM own that are mentioned in the article?
The article notes IFM owns a number of clean energy companies and assets, including Pacific Hydro and various wind farms, as well as other infrastructure interests.
What should everyday investors know about this issue and its impact on superannuation confidence?
The debate highlights concerns about how industry super funds communicate investments in areas like clean energy and whether those communications could be seen as political. The central issue raised is potential erosion of public confidence if members feel campaigns are politically motivated and undertaken without their approval.