David Pocock (ACT, Independent) Share this | Link to 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.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

I don't have a speakers' list in front of me. I don't want to state World War III on this but I did see Senator Roberts move. I'll be led by the Senate. Senator Roberts, the minister is on her feet but I will give you the call. You wanted to raise something with me?

Malcolm Roberts (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

I just wanted to clarify that Senator Rennick was standing to speak before I was—I was just moving seats—but I do want to speak later.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

Absolutely, no dramas. With the indulgence of the Senate, Minister?

Jenny McAllister (NSW, Australian Labor Party, Assistant Minister for Climate Change and Energy) Share this | Link to this | Hansard source

I thank all of the senators for their courtesy in navigating the arrangements about which order we may speak in. I listened carefully to Senator Pocock's contribution and, in particular, his commitment to seeking more transparency and not less, and I listened to many of his other observations about our questions that need to be balanced in thinking about the financial system in this way.

There is not much between us, in fact, Senator Pocock, in listening to your remarks, because Labor is committed to delivering accountability, transparency and good governance in every part of our financial system. It's why we committed to the recommendations in the Hayne royal commission that expand accountability on banks, super funds and other financial services providers. The Albanese government believes that Australians deserve a dignified retirement supported by a strong superannuation system.

Let's be honest: the super system, $3.4 trillion, is world class. It is the fourth largest in the world, even though our economy is the 13th largest. This is a big Australian success story. Unfortunately, those opposite—

Gerard Rennick (Queensland, Liberal Party) Share this | Link to this | Hansard source

It's a world-class rort!

Jenny McAllister (NSW, Australian Labor Party, Assistant Minister for Climate Change and Energy) Share this | Link to this | Hansard source

and you can hear it now in the interjections from Senator Rennick—have been waging a tireless ideological battle against the sector. The government, by contrast, is working in the national interest, not a narrow partisan interest, and we're committed to strengthening the system in the interests of working families.

There is a difference, though, between us, Senator Pocock—through you, Chair—in approach and in the implementation arrangements. The regulations that the previous government introduced regarding the notice of annual member meetings was clunky and, like so many things in relation to superannuation, ideologically motivated. Producing mountains of paper, riddled with double counting, doesn't help.

We expect significant disclosure on the categories of expenditure undertaken by superannuation firms on behalf of their members, but a line-by-line accounting of every item serves no useful purpose. The regulations proposed introduce simplicity and clarity to this process while maintaining that transparency and accountability that I believe we have a shared commitment to implementing, Senator Pocock. Annual member meetings themselves are unchanged, allowing members to examine in great detail the expenditures of their funds.

We're not going to take lectures in accountability and transparency from the people on the other side, because the previous government presided over a decade of cover-ups and rorts. Their leader swore himself into multiple ministries and hid that from the Australian community. It's hardly time to be lecturing other people about transparency.

Our government is committed to cleaning up the mess. We're committed to improving the outcomes of super members so they can retire with dignity and comfort. We are committed to ensuring members receive information from funds that is clear and simple, with annual member meeting notices. We are committed to streamlining disclosure requirements with the national accounting standards so that funds are aligned with the financial services industry. The approach we are advocating for will improve transparency and accountability. It will clean up the unnecessary and burdensome red tape to ensure members can access the information they need in a clear and simple manner. It will assist members in preparing questions ahead of meetings and ensuring they can keep their funds accountable. Funds will continue to be required to disclose an itemised list of political donations.

AMMs are an opportunity for fund members to genuinely engage with their fund. They are an opportunity to hear from the board of trustees, directors and executives, and ask questions about important topics such as fund performance and operation. These reforms are critical to ensuring members can genuinely participate by providing them useful information, assisting them to participate by giving them information in a straightforward way.

Hollie Hughes (NSW, Liberal Party, Shadow Assistant Minister for Climate Change and Energy) Share this | Link to this | Hansard source

The Albanese Labor government has reversed the requirement for super funds to disclose how they spend from super funds on sponsorships and payments. No line items, no transparency, no accountability. These payments from super are for things such as million-dollar footy sponsorships, corporate boxes, union kickbacks and lobbying. Australians deserve to know how their retirement savings are being spent. The changes go against recommendations from the Productivity Commission and APRA. If we want to have a serious conversation about transparency for a $3 trillion industry, it shouldn't start with supporting the winding back of measures designed to let the sunlight in. All senators elected on a platform of integrity must support this disallowance.

Gerard Rennick (Queensland, Liberal Party) Share this | Link to this | Hansard source

What would you call the offspring of communism, Marxism and fascism? Of course, the answer to that is superannuation. First of all, it's communism because in 1992 Paul Keating introduced superannuation that takes the workers' wages. He didn't give them a choice. It started at two per cent. He said, 'We're going to give it to someone you've never met, and there's no guarantee you're going to get it back when you're 60.' Just like the vaccine mandates. That money was taken from them. If Paul Keating had taken that to an election, do you think it would have got up? Absolutely not. If Paul Keating had said in 1992 that by 2025 you were going to have 12 per cent of your wages taken out—wages of workers, mind you, who build this country. This country was built by the battlers, not by the blowhards who are sucking $30 billion of fees out of superannuation ever year. It was built by the battlers.

I still argue it is a breach of the Constitution. You are taking away their property rights without any guarantee that they will get the capital returned to them when they are 60, discounted for present value. Communism. Marxism. What we've got now is industry super funds, and BlackRock and Vanguard in the private sector. I'm not doing this from an ideological Left versus Right platform. I'm doing this from the view point of the big guy versus the little guy: the little guys who get up every day, get out of bed and put their nose to the grindstone. They get the lowest wages in this country, and you're ripping off 12 per cent of their income to give it to someone they've never met so they can gouge $30 billion in fees every year. What you've done is taken that money, which is 'unelected' money, and there's no control over how it's spent. The superannuation boards are not elected by the members. That undermines all the powers of the individual in how their money is spent. Then the superannuation funds appoint their own directors to appoint their own ideological agendas.

When Senator McAllister says it's an ideological battle—can you say 'damn' or not? I won't say it. When Senator McAllister says it's an ideological battle, you're straight that it is You're very correct that it is, because the superannuation boards are using this to push their ideological boards. This is also fascism, because we've now got corporations that are that large. These superannuation funds have hundreds of billions of dollars under management, and they are now telling governments what to do. They are that rich and powerful—some of the money in these superannuation funds across the world mean these funds are bigger than countries' economies. The power of this centralised wealth is becoming a threat to democracy, because of the people running these things, like Larry Fink from Black Rock. Who holds that bloke accountable? Who holds the superannuation funds accountable when they decide they want to spend money on something? No-one. You do not even get to appoint the board members. Can I say—and I'm glad Senator Pocock raised this—the Productivity Commission found that $30 billion in fees are ripped out of superannuation every year. For what? Nothing but paper shuffling.

Do you want to know why we have a shortage of workers in this country? Because we have too many blowhards in this country pushing pens and shuffling paper when they should be out there building infrastructure, producing goods and services, rather than buying and selling shares on the stock market all day, which produces nothing—it produces nothing. This superannuation and the guys that rip off $30 billion a year make Al Capone look like Mother Teresa. This is the biggest racket since the prohibition in the 1930s, mate. If you want to get upset about bikie gangs, I tell you what: these superannuation funds, mate, they're extorting more money out of the workers' pockets every year than bikies ever do.

I'll tell you something else: $50 billion. You read the budget papers tonight, and it will be in the tax expenditure statement. There will be $50 billion in tax concessions for superannuation that mainly go to the upper 20 per cent of income earners. It goes to the same people in those wealthy suburbs that Labor are now mates with—the teals. If you want to talk about rorts and all the rest of it, what about the tax concessions that go to superannuation? You know what? What's the pension for? The people who get the pension are the bottom 70 per cent of earners, so the bottom 50 per cent of earners get a full pension and the next 20 per cent a partial pension. They get very little of those tax concessions. The tax concessions for the wealthy now cost more—or just about; they're one or two billion short—than the cost of the pension. I would rather have a universal pension that was—

A government senator: You introduced that legislation!

No, don't interject. This was introduced by Paul Keating and it was pumped up all the time. We shouldn't have pumped it up. I should acknowledge Senator Richard Alston, who fought very hard against superannuation when it first came in and we should never have opposed him. The Liberal Party coalition should have opposed it from the get-go—and I'll say that to my colleague Senator Cadell who's listening here—because it rips out 12 per cent of income from the regions and Western Australia and those magnificent towns in regional Western Australia, Senator Sterle, and it goes to the ivory palaces in Sydney and Melbourne, where they shuffle their paper and might come in and turn on their screens in the morning, then go and get a coffee and buy a zoot suit for this weekend's triathlon, come back and get a physio. These guys are not the people producing goods and services in this country, and there is way too much wasted on unproductive activity. That is why I totally reject superannuation.

But I haven't finished yet. Of that $3.3 trillion, over a trillion dollars is invested offshore in offshore infrastructure. This country is crying out to build more infrastructure. But do you know what superannuation funds do? They don't build infrastructure because they haven't got the patient capital. The only entity that can build long-term infrastructure is the government. For these guys, it's what they won't do, but they'll buy infrastructure.

You would have noticed that AustralianSuper went in and bought Sydney Airport last year. The Auditor-General was running a protection racket for Sydney Airport. They didn't want the Western Sydney airport built, so they came up with this bogus argument that somehow we paid too much for the land around Sydney Airport, which wasn't true. Anyone that knows accounting standard AASB-13 knows that paragraphs 29 and 30 say that you pay the highest market price regardless of valuation—even though it actually had zoning for an airport.

I should also add that this superannuation robs Peter to pay Paul. Since superannuation was introduced, the number of people who retire with a mortgage has increased from 10 per cent to 40 per cent. We now have people who retire at 60 or 65, pull their superannuation out as a lump sum, pay off their home loan and then go on the pension. Someone that I used to work with in Sydney, at Westfield, bought a $3 million house in Seaforth and had a million dollar deposit. He was 55. He was waiting to get to 65 and he was going to pull out his pension, pay off his mortgage at Seaforth—the other $2 million—and then go on the pension. So there are ways around this, where wealthy people milk the system. But I would say this: if you have a $500,000 mortgage and $100,000 in superannuation, you are getting clipped twice. You are getting fees on your superannuation fund and you are getting fees on your mortgage. It is much better to net off your investments rather than get shafted twice by financial institutions.

Ultimately, this comes down to transparency, and I commend Senator Pocock for actually raising this and trying to bring this disallowance into the chamber. I am going to watch what the Greens do here very, very carefully, because they always go on about transparency and accountability. I will be very disappointed if they do not support Senator Pocock in this motion. It will highlight their hypocrisy if they do not support this motion and it will show that they too are subservient to the union elites—not the members. We love the members. The members are the battlers of this country. I want to be very clear here: I am not going to attack unions per se. They have a role in this country to protect the battlers. But superannuation is not protecting the battlers; it is milking them dry.

I would just like to finish on that note and say to the Greens: this is your chance to stand up to Labor and show that you can think for yourself. I am never going to let you guys forget this if you don't support this. We need to stop the rorts, and there is no bigger rort in this country than superannuation.

Malcolm Roberts (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

There is nothing more important in a democracy than people's confidence in the result of an election. There is nothing more important than people having confidence that the government is there to represent them and that the election results are from a fair and honest process. It is vital for trust, it is vital for investment, it is vital for the future and it is vital for the future of our governance and our sovereignty. There is nothing more important.

Before turning to Senator Pocock's disallowance motion, I want to say that today I moved motion No. 51. It was very simple: that there be laid on the table by the Special Minister of State by no later than 9.30 am on 27 October 2022 any reports, briefing notes, file notes and emails of 13 December 2021 or later held by the Australian Electoral Commission that relate to compliance with sections 273AA and 273AC of the Commonwealth Electoral Act 1918 which relate to the security of computer systems and ballot paper sampling for a Senate election. That was opposed by the Liberal Party. That was opposed by the Labor Party. That was opposed by the Nationals. That was opposed by the Greens. I will speak more about that in a minute.

The minister, Senator McAllister, talks about mountains of paper. Really? Let me tell you about a mountain of paper in a motel in Port Macquarie after the most recent federal election. Someone from out of town came and stayed in that motel and they found, in the wastepaper basket, ballot papers from the seat of Paterson, the next electorate. There were mountains of paper. We cannot trust our election process. We have holes in our election process everywhere: electronically, paper-wise, scrutineering—everywhere.

In the last parliament, I introduced legislation requiring an election audit. Our federal elections have never ever been audited. How can people have faith in that? Go onto any social media site—people are crying out that they don't trust the election results. When I introduced that legislation, the Liberals opposed it, Labor opposed it, the Greens opposed it, and the Nationals opposed it. Fortunately, Ben Morton was the minister assisting the Prime Minister, and he approached us and said that, now that he knew where we were, he wanted to introduce similar legislation. He reintroduced it with two or three minor changes. We helped him do it, and it passed the Senate. It came into being. The Australian Electoral Commission was then required to do an audit of the last federal election in the weeks leading up to the election and in the weeks after the election. That meant auditing the process for the election, the results and whether or not the processes were complied with. But the Australian Electoral Commission, despite that clear instruction in the legislation from the people, did not properly audit that election. Yet they claim they did. Now we have the Liberals, Labor, the Nationals and the Greens wanting to hide their donations.

In the last federal election, Labor got less than one-third of the votes, but they're forming government. The Liberal and National parties got 34 per cent. One-third of the people in the last election did not vote for Labor, the Liberals or the Nationals. But the mouthpiece media is on the side of the Liberals, Labor and the Nationals, and they're hiding the truth. People need to see the truth. We will continue chasing an audit that's done properly, and we need to shine a light on the truth. That's why I'm supporting Senator Pocock's disallowance motion—to give the people the details. We are servants to the people who are the citizens of this country; we serve them. They deserve to know the details of the spending. As Senator Rennick pointed out, it's their money, and I want to make sure that they get those details. We will be supporting Senator Pocock's motion.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

Senator McKim, as our Greens Treasury spokesperson, would normally be delivering this speech, but he's in lock-up this afternoon, so I get the gig.

It won't come as a surprise to anyone that the Greens won't be supporting this disallowance motion. However, this should not be interpreted as the Greens endorsing the new government's new regulations. Our view is that the previous government's regulations were no good, but the new government's regulations are not much better. We may well move or support a disallowance of these regulations before the statutory time period to do so has expired, but, as with all disallowance motions, we have a binary choice: we can either accept or reject a new set of rules for what information is provided by super funds in their annual member meeting notices.

The requirement of super funds to hold annual member meetings was legislated only three years ago, and the explanatory memorandum for that legislation spoke of:

… the importance of increased accountability through higher levels of engagement and effective communication between trustees and their members.

This portrays the logical fallacy sitting at the heart of this debate: the fallacy of free-market capitalism, where the only thing individuals need to do to optimise their financial position is to fully inform themselves so that they can act rationally in the market and maximise their returns. Except people don't spend the evening on the first Tuesday of each month pouring over financial statements! Also, on average, you're likely to get a lower return out of your super fund.

In 2019 the Productivity Commission reviewed the super system and found that not-for-profit industry funds performed better than for-profit retail funds. They found, secondly, that keeping your super in a default product was likely to yield a better return than if you chose to put your money elsewhere. That's the quintessential economic rationalists saying that most people were better off not playing the market, because their default super fund—usually a not-for-profit fund—was likely to do a better job of managing their money. But, even if we lived in a free market nirvana, neither the previous government's regulations nor the new government's regulations would provide anything close to useful information for people to make a rational decision.

Senator Pocock was tweeting about the lack of details on $140 million in expenses listed on AustralianSuper's AMM notice. Do we know what the $140 million means under the new government's regulations? Not really. Would we know what it means under the previous government's regulations? We would have had an itemised breakdown of the $140 million, but we still wouldn't have any context. Under both the previous government regulations and the new government regulations, the annual member meeting notices only give member details on their fund. Now $240 million is a big number, but it's always going to be a big number for AustralianSuper, because they are the biggest super fund in the country. They've got 2.3 million members. Would that information be provided under the old or new regulations? No. What about a benchmark of AustralianSuper's expenditure compared to other funds? Again, no.

The outgoing chair of APRA, Wayne Byres, who has been regulating super for the last eight years, provided a useful perspective in a speech he gave last week. He said:

Transparency has been key to increasing the discipline on trustees to ensure they are always managing members' money in their best interests. In saying that, I am not suggesting every single thing about a fund's operations must become public … pumping out reams of raw data is not going to be helpful. Information must be disclosed in a manner that is digestible and informative if it is to be useful.

That is exactly what the Greens would like to do in this situation: have meaningful transparency. We are in discussions with the government about developing a scheme to provide this, as the chamber already knows. In our minds, this would be an annual super transparency report, published by the regulator, APRA, that tables all of the relevant expenditure, including for political purposes and for profit, for all super funds, all in the one place. This would enable members to understand how their super fund rates. It would also enable institutional scrutiny from the media, NGOs and parliamentarians on expenditure by super funds and on profit-making by super funds, which is far more likely to bring about meaningful change than either of the regulations that we're choosing between today.

Andrew Bragg (NSW, Liberal Party) Share this | Link to this | Hansard source

The point here is that the super scheme has been running for almost 30 years and only in 2021 was the parliament able to enact the sorts of changes that should have been features of the original scheme's design. That goes to having a performance test, it goes to reducing multiple accounts, it goes to putting beyond doubt the legal obligations of the trustees to work only in the interests of the members and not to waste members' money, and it also goes to the transparency arrangements which the Labor Party has now stripped from the legislation.

Those four things are all designed to ensure that the system is being run for the members, because this is one of the biggest things that we do here in this parliament: we pass a law that takes away 10.5 per cent of the worker's money and puts it into a mandatory scheme. There may be good arguments for this, if it were to be well run and if it were to reduce the call on the taxpayer over the longer term. And there are strong arguments that we have not achieved that. But the idea that the concept of a performance test; and the idea of reducing multiple accounts; and the idea of putting beyond doubt the legal obligations of the trustees to the members, not to the vested interests of the banks or unions; and the idea that member statements, which transparently provide the information about where their money is going, would be bad things is insane. But that was the position of the Labor Party when they voted against the legislation here in this place in the last parliament, and that is the position today of the Labor Party.

I call this government 'the government for vested interests', and the king of vested interests is Mr Stephen Jones, who is the minister. You go through his first priorities since being in this portfolio, and his first priority is to strip out transparency. While he is stripping out transparency through the regulation that he's made, he's also reviewing the best financial interest test. Why would you review the best financial interest test? The only reason you would review the best financial interest test would be to admit payments from funds which are banned today. The reason the best financial interest test was put in place was that, at Senate estimates, it was very clear that the prudential regulator, APRA, was not enforcing the prior law, which was the sole purpose test. There were funds that were making political donations. Political donations are not payments from super funds to unions. They are explicit payments that have been paid from a super fund into the coffers of a political party. There was a fund called Sunsuper which had made direct political payments into the Queensland branch of the Labor Party. At Senate estimates, APRA said it was okay for super funds to do that. That led the then government to legislate to ensure that that point was beyond doubt, that that could not happen. Why would you be reviewing the best financial interest duty unless you wanted to admit some sort of murky payment? That is going on in the background. That is something that Minister Jones is pursuing through the Treasury.

The other thing he is doing, concurrently, is he has legislation before this parliament to change the performance test. He wants to create a special class of funds, religious based funds, which he wants to allow to perform less strongly than all the other funds. That is an extraordinary precedent when you think about it. You could have a faith based fund being given a licence to perform less strongly than any other fund. That is a shocking precedent. I say to the people who love superannuation: this is a very bad idea. There are a lot of kooky ideas in this place, and if you break the dam wall and break down that key test—that the money is only there for the members and the workers—then you will have all sorts of crazy ideas being used as justification.

But the matter before the Senate today—I commend Senator David Pocock for moving this disallowance—is about transparency of the expenditure of the funds. That's what it's about. Minister Jones put out an exposure draft of the regulation at 5.30 on a Friday night a few months ago. He must have been very proud of it. He talked to the industry about the regulation and took a few submissions in. Then he put out another; he made the final regulation. The only difference between the regulation that was an exposure draft and the final one was that he explicitly said he wasn't going to let political donations be made.

But the real money here is not political donations. As I said before, there would be only a very small number of instances where a fund has made a direct payment into a political party. The big money here is the transfers to the unions—on the most recent data we have from the AEC, it was $12.9 million in 2020-21, it will be $15 million this year most likely and it will be getting up to $30 million by the end of the decade. Some funds are gifting the unions $2 million and $3 million in a financial year. That information is only available because of the AEC records. It is only available because the unions, which are registered organisations, have to lodge returns with the Electoral Commission, and on those returns they have to say, 'Here is where my income is coming from.' Because of that we were able to work out where the money is going.

As a result of this regulation having now been made to cover up the itemised expenditure, a member of a super fund can now get more information about their fund's activities by trawling through the paper based returns that are stuck on the AEC's website than they can in their own member statement that they're supposed to receive once a year. That is an extraordinary turn of events. But of course it is a lot of money, and these organisations have a lot of influence over the government.

An amount of $30 million by the end of the decade would include some of the largest contributions to any organisation in Australia that wanted to run any kind of campaign, so I understand why they want to cover it up. But the purpose of the change is clear. The outworking of the change through the initial disclosures, as Senator Pocock referred to, indicates that a fund like Australian Super, because of this regulation, is now able to cover up $109 million in related party transactions which were required to be released under the old regulation. In addition to that, there is a bit over $1 million in payments made to unions, or industrial body payments. Previously we would have been able to see which unions these funds were going to.

People want to talk about the whole superannuation industry. Why would you not have a situation where all of the funds had to disclose all of their related party transactions? It doesn't make any sense to cover this up for any purpose. The fact that it's being done so brazenly, and the fact that this chamber is going to give cover to this, really is the most disappointing feature. People who have argued for transparency and people who have argued that it's important to have integrity in government are now going to permit this huge covering up.

The good news is the longer this regulation that Mr Jones has made remains in force, the stronger the case will be for there to be another regulation made to go back to the future. Ultimately, it can't be sustained that it's in the country's interests to run a disclosure regime where you can hide literally hundreds of millions of dollars in related party transactions to God knows who and, in addition, hide millions of dollars in payments to unions and other bodies. That is the key point.

This is an unsustainable position that the chamber has taken today on this disallowance. There is no question that we'll have to come back and revisit this. The only key point that's left to say is that the longer the regulation is in place the stronger the case for reverting will be. Members will be able to see as much information on their member statements as they would be able to access from the AEC. Last time I looked, most Australians didn't go to the AEC website to see what their super fund was doing.

Paul Scarr (Queensland, Liberal Party) Share this | Link to this | Hansard source

I rise to speak in favour of this disallowance of the Superannuation Industry (Supervision) Amendment (Annual Members' Meetings Notices) Regulations 2022. I do congratulate Senator Pocock for this motion, which I think is terribly important.

In this place during the last sitting, I got up and gave a speech in relation to the performance of a listed public company called Cleanaway, its environmental performance and it's renumeration outcomes. I could do that because it is an ASX-listed public company and there was granular disclosure in its annual report released on the Australian Securities Exchange. I could go through that report and hold it accountable for concerns I had with respect to its environmental performance for the people of Ipswich. That's what transparency delivers, and that's all we're seeking—transparency in relation to reporting to the members of the superannuation fund. It's their money, it's the members' money. It isn't the money of the super fund; it's the members' money.

As Senator Pocock has said, and has written about previously, people are concerned about this issue. Given the concern, why not disclose? What is the issue? What are they scared of? Given the interest, why not disclose? I haven't heard any cogent argument against disclosure. I used to be a company secretary of a listed public company. This argument about compliance costs and reams of paper is just an absolute nonsense. These superannuation funds would have accounting systems that would be able to access the relevant information quickly and easily. The cost of compliance is absolutely immaterial in the scheme of things. There is a legitimate public interest in favour of disclosure and transparency, and given that legitimate public interest—indeed, it's more focused than that, the interest of members of the industry super funds want to know this information. Given their interest, why not disclose? Why not be transparent and disclose?

I listened very closely to Senator Waters' arguments, and I couldn't tell at times whether her argument was in favour of transparency or not. I don't know about other members of the Greens, but I don't think her heart is in this debate in terms of arguing against this disallowance. I think there's something going on behind the scenes here. I'm not sure what it is. I'm not sure what the Greens and Labor are negotiating.

On the face of it, I can't see any reason why the members of the superannuation fund should be denied the opportunity to make their own assessment of this relevant information. That's what you're doing, you're denying the members of the super fund to make their own assessment of that information. Why deny them that right? It makes absolutely no sense, unless you consider particular vested interests that those opposite, in government, are seeking to protect from the position of the government benches. That is the only reason why you would be against transparency in this situation.

The costs argument is just ridiculous. It's immaterial. These industry super funds have obligations to keep accounts and to keep track of all this information, so the costs argument is just absurd. It's embarrassing you even raise it in this context, given the billions and billions of dollars we're talking about under management. The only reason you would disagree with Senator Pocock in this regard is if you're trying to protect vested interests and they're scared about releasing this information. That is the only reason.

Ask yourselves why. Why don't they want this information to be released? Why not? That's the very reason why it should be disclosed. That is the very reason why it should be disclosed. Because of that very reason, it should be disclosed. I commend those who have argued in favour of this motion. I think you're absolutely correct, and I congratulate Senator Pocock in this regard. I think his radar is right on track, and I'm happy to support him in this respect.

Andrew McLachlan (SA, Deputy-President) Share this | Link to this | Hansard source

The motion before the Senate is that the motion moved by Senator Pocock be agreed to.