Tanya Plibersek (Sydney, Australian Labor Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

) ( ): My question is to the Minister for Revenue and Financial Services. It has been revealed that Australia's biggest banks will have to pay almost $180 million in compensation because they spent years charging over 200,000 customers fees for services that they did not actually receive. Is this what the minister meant when she said she wanted to lift superannuation funds to the same standards as banks? Does the minister really want superannuation account holders to be treated the way banks treat their customers?

Kelly O'Dwyer (Higgins, Liberal Party, Minister for Revenue and Financial Services) Share this | Link to this | Hansard source

I thank the member for her question. I note that she believes, along with those opposite, that it is incredibly important that the mandated superannuation system, in which we force people to defer their wages that they earn today to save for their retirement income into the future—they think it is acceptable that it has lower governance standards than that that currently apply to banks and life insurance companies. It is ridiculous to think that millions of Australians who have their money in superannuation funds would have funds that have lower governance standards than what currently applies to banks and to life insurance companies.

Mr Brendan O'Connor interjecting —

Tony Smith (Speaker) Share this | Link to this | Hansard source

The member for Gorton!

Kelly O'Dwyer (Higgins, Liberal Party, Minister for Revenue and Financial Services) Share this | Link to this | Hansard source

It is not actually something that we have dreamt up on this side of the House. In fact, there was a review that was undertaken under Labor's watch by Jeremy Cooper—a handpicked person from Labor for the job—who concluded that the governance standards for superannuation funds was not up to the mark. He said that there needed to be at least one-third of independent directors on these boards.

A second review conducted by David Murray said that there needed to be a majority of independent directors and an independent chair on these boards. It is so unacceptable to think that all of the problems that could occur within these funds can continue without there being appropriate oversight.

Let me just quote a couple of other people who think that this might be a good idea. Ken Henry, who was the former adviser to Paul Keating and former Treasury secretary, has been reported as saying it was time that industry funds accepted the need for new governance standards as advocated by the government. He said that the trade union movement should be proud of the system it created, but that the argument that, 'The system isn't broken, so why fix it?' was a bit like saying that a house that had not been torched should not have insurance. Paul Howes, the former Australian Workers' Union boss, has said:

It has been disappointing to see a knee-jerk reaction against the call for a more independent governance model … Equal representation has been a success but the evolution of the super industry is important and I can't see anything negative in having more independents on boards.

Those on that side of the House want to protect their union mates and union bosses in maintaining access to slush funds. We think it is completely and utterly inappropriate, and we will stand up for members, we will stand up for what is right for them and we will stand up for their interests.