Fraser Anning (Queensland, Pauline Hanson's One Nation Party) Share this | Hansard source

This is not my first speech. I rise to speak to the Superannuation Laws Amendment (Strengthening Trustee Arrangements) Bill 2017 currently before the Senate. This legislation seeks to ensure that, within three years, all superannuation boards have at least one-third independent non-executive directors and an independent chairman. The clear purpose of this legislation is to prevent conflicts of interest and to better protect fund members' interests.

The government has developed this legislation in response to concerns expressed by the regulator, APRA, that some trustees of superannuation funds did not appear to be putting the best interests of members first. Concerns have been expressed that some industry super funds have boards stacked with union officials whose first loyalty may be to their unions and not just the superannuation fund members. This is a clear conflict of interest. This may mean that members' funds may not be invested with the sole aim of maximizing returns, but may instead be invested in a manner that supports the political goals of unions. What this legislation does not consider, however, is the excess fees charged by retail super funds. In contrast, on not-for-profit industry superannuation, the Rainmaker report on revenue collected from Australia's $2.1 trillion in superannuation assets found that the banks pocketed almost $9 billion in fees, taken directly from the superannuation of ordinary working Australians. In fact, a report by the Grattan Institute found that, thanks to the retail superannuation sector, super fees overall in Australia were around three times the median OECD rate.

The involvement of banks in running retail super funds puts them centrestage in the fee gouging of Aussie workers. It is disappointing that the government has ignored this pressing issue and only focused on the role of unions in super funds. In addition to the fee rip-off, which the bill before us ignores, concerns have been expressed that imposing a quota for independent directors may lead to less qualified directors ending up on boards. Given the issue of the banks charging excessive super fees, there is a real risk that the proposed legislation may lead to boards stacked with banking and finance professionals who will reduce the accountability of boards to fund members and will further drive up fees. Other concerns have included that tinkering with the corporate governance of funds that are currently performing well may place at risk the rates of growth achieved by existing directors. A number of organisations have approached me and expressed grave concerns. Whether the proposed change is good or bad is clearly going to depend on how the position of 'independent director' is defined in the legislation. I am not confident that the definition proposed by the government in the current bill achieves the necessary balance.

While supporting the intent of the government to fix the real problem identified by APRA, I also wish to ensure that changes made do not accidently force well-run super funds to shed highly qualified and capable directors because they fail to comply with the government's requirements. I am therefore foreshadowing an amendment to the definition of 'independent director'. Instead of the long and involved definition proposed by the government, my proposal is to simply adopt the existing corporate definition. Given that the government's declared intent for this and other related bills is to bring superannuation fund governance into line with standard corporate governance principles, I cannot see that my proposed amendment would be objectionable to the government.