David Pocock (ACT, Independent) Share this | Hansard source

I move:

That the Superannuation Industry (Supervision) Amendment (Annual Members' Meetings Notices) Regulations 2022, made under the Superannuation Industry (Supervision) Act 1993, be disallowed [F2022L01162].

Australians have more than $3.3 trillion invested in superannuation. According to the Australian Prudential Regulation Authority, APRA, we pay some $9.1 billion per annum in fees, but the Grattan Institute point out that many superannuation funds don't report the fees that they pay to companies who help to manage their members' investments. When you add that all up it puts the true cost significantly higher, at around $30 billion per annum. That's $30 billion of Australians' money going to superannuation companies in fees alone. I'm moving this motion to disallow because I believe we should know how that money—our money, superannuation members' money—is being spent. I'm moving this disallowance because I believe in more transparency, not less.

I've listened to the arguments from both sides of this debate. I've heard the arguments from the government, unions and industry super funds that the regulations used by the former government are poorly drafted, create an unduly onerous compliance burden and were ultimately created for use as a political weapon. I've heard the opposition's argument that some super funds are used as a vehicle for donations but in less obvious ways than just via political donations, which the new regulations still require to be disclosed. Unions argue their presence and associated director fees on boards help ensure good outcomes for super fund members. Consumer bodies express concerns that the current government's wind-back of the previous government's measures goes too far. They've said, 'We need a greater level of transparency over how funds are spending their members' money.' I think they're right. The truth likely lies somewhere in between the two major parties' views on this issue. It's certainly something I've received a lot of correspondence on from people in the ACT. People want to know where their super fund is spending their money.

The government's public reasoning is that a requirement for a fully itemised list across all categories—marketing, sponsorships, director fees—would impose higher compliance costs ultimately borne by members. But funds are required to disclose this to APRA anyway, so I don't see how there are compliance costs if it's simply including the disclosure they send to APRA to their members. Funds are looking after their money, investing on their behalf. Members should know who those fees are going to.

We also know, after the government put through this regulation, allowing superannuation funds to put out their annual statements with aggregated amounts, that greater disclosure is possible. Prime Super and the Commonwealth Superannuation Corporation are two recent examples; they've both released detailed lists of their expenditure on marketing, sponsorship and director fees. It didn't seem too hard for them.

It's important we find a balance that puts transparency first. My sense from the recent election and talking to people across the ACT and elsewhere is that Australians want more transparency across the board, from the way government is operating to being able to see where their superannuation fees are going.

I respect Senator McKim and what he's seeking to do, in negotiating a solution with the government on this issue. But I point out that, in the time he has taken, superannuation funds have sent out their annual statements, most with an aggregated amount for these various categories, and we're none the wiser as to where that money is going. They've taken advantage of a watered-down transparency measure, which was the first regulation issued by the new Assistant Treasurer.

According to the Grattan Institute, a 2018 study showed that Australians paid more than $30 billion a year in super fees. That equates to almost two per cent of Australia's annual gross domestic product. That's much more than the $23 billion we spent on energy in that same year. A household nearing retirement pays average superannuation fees of $3,700 a year. These are not trivial amounts; these are things we should be looking at. We should be ensuring that there is transparency, and that super fund members can see where their money is going and can make an informed decision as to whether that sits well with them.

Superannuation is, clearly, a massive industry with huge power. It's really important that we keep that power accountable, because people's retirements rely on a well-regulated, high-performing sector. There are so many reform priorities needing attention in this space, from chasing down the hundreds of millions of dollars in unpaid superannuation entitlements to reforms that will stop super being used by wealthy individuals to pay less tax. These reforms should be a priority, not reducing transparency in super fund spending, and I'll be encouraging the government to take it on at the earliest opportunity.

It's been disappointing to see Senator McKim pushing for more transparency but, at the same time, putting off dealing with this and potentially disallowing a regulation which is reducing transparency—after an election that, you could say, was about integrity and transparency. It's a poor move. Senator McKim asked for two weeks to be able to negotiate with Minister Jones and get a good outcome for superannuation members. That two weeks has come and gone.

I'm moving this disallowance motion because I believe this is important to Australians. This does matter, and I don't see the downside in having more transparency. The argument about regulatory burden is an absolute furphy. We know already that there have been funds that have used the old regulations; they didn't see it as too burdensome. So, having moved this, I ask the Senate to debate this and, ultimately, vote on whether or not we think that less transparency is a good thing.