Coalition slams union influence

Opposition backbencher Paul Fletcher has accused the union movement of piggybacking on the fast-growing superannuation sector and 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," he 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 retirements savings, figures from regulator Australian Prudential Regulation Authority 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 in funds under management and 2.1 million members. Government funds QSuper and State Super (NSW) are next with $40 billion and $36 billion.

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 did not have any foreseeable conflict of interest.

The former Optus executive also flagged an end to the requirement that industry funds have equal numbers of employee and employer representatives on their trustee board. Where equal representation was entrenched, at least one-third of the directors should be independent, he said.

APRA, meanwhile, 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 non-profit sector's investments in infrastructure and lower fees.

Director of research at research group Rainmaker Alex Dunnin said greater competition between retail and industry funds was great news. "Finally, we have some price and product competition in super rather than it just being a battle of distribution systems and commission feeds."