David Fawcett (Wakefield, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Treasurer. Would the Treasurer inform the House of the importance of protecting employees’ superannuation funds? Is the Treasurer aware of instances where superannuation schemes have been raided for government spending proposals?

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the honourable member for Wakefield for his question. I can inform him that the government has gone to considerable lengths with legislation to protect employees’ superannuation funds. The reason for that is that these funds are for the benefit of employees over the long term and, if those who get control of managing them do not discharge their duty in the interests of the employees, employees will suffer—they will either retire on less or, at worst, they will have nothing to retire on at all. So independent trustees are given the legislative requirement of investing solely for the benefit of members. They cannot be given directions on how to do that and, most especially, in respect of company superannuation funds, the company cannot appropriate any of those superannuation savings for the benefit of the company or its investment plans.

The same should go whether they are private employees or government employees. There have been a lot of demands in Australia for government employees’ superannuation to be protected. The member for Lilley has been a persistent demander that the superannuation savings of employees be locked up in the Future Fund and not raided. For example, on 7 November 2005, he said of the Future Fund:

It has to be a locked box. We have to make the Future Fund a locked box.

It’s very important there is public confidence in the Future Fund and that it is a locked box that can’t be raided by the National Party, Peter Costello or anybody else.

What he did not say is that he apparently had a plan for it to be raided by the Labor Party and Kevin Rudd. On 18 August 2005, the member for Lilley said:

The whole point of the Future Fund was to have Budget surpluses and the proceeds of asset sales put in the hands of independent experts and locked away in a box.

The idea of an independent expert is that the expert makes the investment decision—not the government, not the trade union movement, not the member for Melbourne, not the member for Lilley and not the member for Griffith but an independent expert. Right over the top of all of those demands that the Future Fund be a locked box has come the bear to the honey pot. Once the Leader of the Opposition, the member for Melbourne and the member for Lilley got the sniff of honey on their paws, they could not resist.

I said yesterday that no state government had ever tried to influence a state government employee superannuation scheme. I received information after question time yesterday which indicated that I may not have been entirely accurate in that claim. I received information after question time yesterday that in 1987 there was a state government that tried to use the Government Employee Superannuation Board to prop up a failed company in the state of Western Australia. In 1992, the royal commission into WA Inc. found:

In our view, as a result of his association with Mr Laurie Connell, Mr Brian Burke demonstrated a disposition to assist Rothwells from the moment he became aware it was in difficulty. He was instrumental in Rothwells obtaining support from the Government Employees Superannuation Board Fund.

So it was a finding of the Western Australian royal commission that there is a precedent for a government directing employees’ superannuation. It is Mr Brian Burke, and it was done in relation to Rothwells.

One can only imagine whether at breakfast, at lunch or at the dinner down there at Perugino—‘the guess who’s coming to dinner’ dinner—any discussion about the subject of using superannuation funds for pet investment projects came up. There is one precedent and one precedent alone for what the Leader of the Opposition now proposes. It is the precedent of Brian Burke, Rothwells Bank and WA Inc. And that says it all.