Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Hansard source

The Superannuation Legislation Amendment (Trustee Obligations and Prudential Standards) Bill 2012 does a number of things. It increases obligations on superannuation fund trustees and directors both generally for all super fund trustees and specifically for MySuper trustees. It also gives APRA, the regulator, the power to issue prudential standards in relation to various prudential matters in superannuation.

The coalition strongly supports genuine attempts to improve corporate governance and transparency for trustees and directors of superannuation funds. The coalition also strongly supports improvements and enhancements to prudential standards in superannuation. All of us have to continue to work hard to ensure that we have the most efficient, the most transparent and the most competitive superannuation system possible, with the most appropriate corporate governance and transparency standards in place. Of course, we still have some way to go in that regard, but only the most efficient, the most transparent and the most competitive superannuation system possible will help to maximise value for Australians with superannuation and, ultimately, the value of the retirement savings that Australians have in their superannuation.

However, the coalition cannot support this bill in its current form. The coalition will propose a very sensible and very constructive amendment that would significantly improve this bill by removing the government's proposed and unworkable scale test. This is because the government's version of the scale test is a vague and external test imposed on superannuation trustees which would make it impossible to administer in practice. As it is, it is already hard to attract properly qualified super fund trustees to these sorts of roles and the government, by making it even more complex and more uncertain for people who have to fulfil and take on those responsibilities, will make it even more difficult. If the amendment that the coalition very constructively will put forward is supported, we would be in a position to support the bill. If the amendment is not passed, the coalition will not be able to support the passage of this bill.

The coalition also has some concerns about a new provision in the bill that may impose personal liability on directors of superannuation fund boards to meet the collective obligations of the trustee board by introducing a series of new covenants for directors and deeming individual directors to be parties to the governing rules of the superannuation fund. It is important to remember that the Cooper review commissioned by this government into Australia's superannuation system handed down its report back in June 2010, and it made of series of very sensible recommendations on how corporate governance in superannuation could and should be improved.

The government and the current minister for superannuation has either outright opposed or been very unenthusiastic about embracing some of these very sensible recommendations that have been made by the government's own Cooper review on how corporate governance in superannuation should be improved. So there is a lot of unfinished and unprogressed business here that we think the government should start to act on.

The Cooper review specifically recommended that disclosure of conflicts of interest be mandatory. Given some of the recent events across the broader union and union dominated industry super funds movement I would have thought that it is pretty self-evident that disclosure of conflicts of interest ought to be mandatory. Directors should be forced to properly disclose their remuneration in line with the provisions that apply for publicly listed companies. And the Cooper review did recommend that there be appropriate provision for independent directors on superannuation fund boards, a recommendation that the government, and Minister Shorten in particular, has refused to embrace because his friends in the union movement do not want him to act on that particular recommendation.

Very self-evidently, a very sensible recommendation made by the Cooper review was that those directors who want to sit on multiple boards should demonstrate to APRA that they do not have any foreseeable conflicts of interest. This seems to be completely non-controversial as a very sensible suggestion. Yet the government's legislation here before us does not include any of these very important and necessary improvements to the corporate governance and transparency framework in superannuation, because Minister Shorten does not want to pick a fight with his friends in the union movement, who do not want him to make these very important and sensible changes to corporate governance arrangements in superannuation.

I note that Minister Conroy, having been quite aggressive in his interjections early on, has gone very, very quiet.