Alarm bell
It follows Treasurer Josh Frydenberg’s letter to the prudential regulator to express alarm that trade unions pressured 30 industry super funds to use their leverage as investors to pressure BHP to save about 80 local seafarer jobs.
Prime Minister Scott Morrison told the summit that Labor and union-aligned funds did not want more independent directors on the boards of industry super funds, a reform the Coalition has tried but failed to legislate through Parliament.
“They want to control all of that and wield the power,” Mr Morrison said on Tuesday in Sydney.
“Unions like to wield power. I haven’t seen so much hubris from an opposition who thinks they’re already there.”
Shadow treasurer Chris Bowen hit back at the government’s “ideological warfare on industry funds”, arguing all shareholders had the right to engage with company management on issues.
‘No adverse findings’
“Now let’s be clear: industry funds are run by a 50/50 arrangement between employee and employer representatives,” Mr Bowen said.
“They are obliged under the law to act in the best interests of their members and they are shareholders and investors like every other shareholder.
“The royal commission found no adverse findings against industry funds whatsoever. The Productivity Commission confirmed that they are the best performers.
“I’m not here to promote industry funds over any other funds but I am here to defend the rights of all Australians to invest in whichever superannuation system they want and for those industry funds to act as any other shareholder.”
ANZ Bank chairman David Gonski on Monday backed a call by Greg Combet, chairman of Industry Super Australia, for investors to more focus on environmental, social and governance matters in the interests of long-term value creation.
Backbench concerns
Liberal MP Jason Falinski joined other party backbenchers voicing concerns about industry funds.
“The very fact that we have to get a guarantee from Heather Ridout is a worry,” he said.
“No super fund should be in this position. We have already seen what they have done to stop modest reforms such as independent directors.
“The chief beneficiary of Labors’ retiree tax are industry super funds who have over $60 million in donations to Labor over the last 10 years. This is a very troubling moment in Australia’s democracy.”
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