James Paterson (Victoria, Liberal Party) Share this | Hansard source

I'm very pleased to rise to speak on this important package of reforms being introduced by the government to Australia's superannuation system. I think at the outset it's really important to remember that superannuation is different. It's not like any other sector. It's not like any other financial instrument. It's not like any other financial asset that most Australians hold. It's different because it's compulsory. We here in Canberra, in this place, force all Australian workers to put aside a proportion of their income for their retirement, and we tell them they must invest it in a superannuation fund that they cannot access until a certain age. I'm not questioning the merits of that. I think it's a very sensible way to ensure that we have adequate retirement income for Australians and that not all Australians are reliant on the pension in the future. I think that's a very sensible thing. But, because it's different, I think it requires a greater level of scrutiny, oversight and regulation than a normal industry or business would, because often, in those industries and those businesses, people's interactions with them are purely voluntary. If a customer doesn't like their bank, they can stop banking with that bank. If a customer doesn't like their milk bar, they can go to another milk bar. But we force them, whether they like it or not, to have their funds in superannuation, and that demands a much higher standard of scrutiny and regulation than any other industry.

Yet a very significant proportion of this industry, the industry super fund portion of the superannuation industry, is in fact regulated even less and even more lightly than most other financial products, financial businesses and financial assets. So we have a bizarre situation where something which really should demand a higher level of scrutiny and regulation in fact receives a lower level of scrutiny and regulation. This is something that those opposite, in the Labor Party, would never normally tolerate. Can you imagine them coming to this place to defend unregulated financial assets? I would find it very hard to believe, and yet they do. I wonder why that is. I wonder why on this issue it's different.

Before I run out of time I want to take up one point in Senator McAllister's speech. She particularly focused on the independent directors aspects of this legislation. These bills—the Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Bill 2017 and the Superannuation Laws Amendment (Strengthening Trustee Arrangements) Bill 2017—do a number of things which perhaps in continuation later I can address. But I'm addressing this issue. Senator McAllister set a challenge for those opposite her: to mention one scandal or one issue which demonstrated that this is necessary. I'm very happy to do so, and in order to do so I'm going to quote an article from the Financial Review published on 18 March last year. It's entitled 'Former Cbus employees escape jail', and it's by Lucille Keen:

Two former Cbus employees have been given suspended jail sentences after pleading guilty to giving false and misleading evidence to the trade union Royal Commission.

In 2014, Maria Butera and Lisa Zanatta appeared before the royal commission into trade union governance and corruption under Dyson Heydon over claims the former superannuation advisors gave the Construction, Forestry, Mining and Energy Union names and personal details of more than 300 members.

In November, Ms Butera was charged with counts of giving false and misleading evidence and Ms Zanatta faced two counts of the same offence.

The indictable offence carried a maximum penalty of five years' jail or a $20,000 fine.

Why would employees of Cbus want to give the private superannuation details of their members to a union like the CFMEU? What could possibly enter their minds that would cause them to do that? Maybe one of the factors that entered their minds was the CFMEU's effective control of the superannuation fund which employed them. Maybe they were influenced by the fact that half of the board were representatives and appointees of the CFMEU.

Senator McAllister said that it's important that we have boards that are representative of workers. I think that's true. But it is not true to say that unions represent workers. Unions represent about 10 per cent of private sector workers, and yet they have 50 per cent of the positions on industry super boards. It is totally out of whack. It is totally out of balance. It needs to change, and this is a very sensible package of reforms to deliver that. I seek leave to continue my remarks.

Debate interrupted.