Coalition MP calls to scrap unions' equal voice on funds' boards
Opposition backbencher Paul Fletcher has accused the union movement of piggybacking on Australia's fast-growing superannuation sector. He said the Coalition wanted to scrap the equal representation of unions on industry fund boards.
"When the compulsory superannuation system was established by the Hawke-Keating Labor government and by the ACTU in the early '90s, one of the key objectives was to increase the power and influence of the union movement," Mr Fletcher said.
"Upon coming to power in 2007, the Rudd-Gillard-Rudd government began working enthusiastically to further that agenda.
"The evidence is clear in the number of union officials who are on the boards of superannuation funds; the concentration of union control in the biggest funds; the substantial number of directors appointed by the large unions and union peak bodies; and the growing market share enjoyed by the industry and public sector funds, with their share of contributions running well ahead of their share of existing assets."
Self-managed funds and "retail" funds run by banks hold 58 per cent of Australia's $1.6 trillion in retirement savings, figures from regulator APRA show. By contrast, industry funds and public sector funds - more likely to have union members on their boards - hold 36 per cent.
But industry and public sector funds are the largest individual funds, with AustralianSuper leading the pack with $62 billion funds under management.
Mr Fletcher said a Coalition government would require trustee boards to reveal their pay and compel directors seeking to sit on multiple boards to demonstrate to APRA that they have no foreseeable conflict of interest.
He also signalled an end to the requirement that industry funds have equal numbers of employee and employer representatives on their trustee board. Where equal representation is entrenched, at least one-third of directors should be independent, Mr Fletcher said.
APRA said this week that super funds with equal representation should consider appointing an independent director to improve governance and prudential standards.
But Industry Super Network, the lobby group for industry super funds, said the 50:50 model had contributed to industry funds outperforming retail funds, in addition to the not-for-profit sector's investments in infrastructure and lower fee costs.