Jacqui Lambie (Tasmania, Jacqui Lambie Network) Share this | Link to this | Hansard source

Before moving business of the Senate notice of motion No. 7, I ask that the name of Senator McKim be added to the motion. I, and also on behalf of Senator McKim, move:

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

Nick McKim (Tasmania, Australian Greens) Share this | Link to this | Hansard source

The last time the Senate considered a motion to disallow these regulations, the Greens did not support that motion. As we said at the time, this was not to be interpreted as the Greens endorsing the new government's regulations. Our view is, and was at the time, that the previous government's regulations are no good, but the new government's regulations are not much better. In particular, neither the previous government's regulations nor the new government's regulations include dividends or other flows of money for profit within the scope of reportable transactions.

From the outset, the Greens have stepped back and asked this: what would be most useful for superannuation transparency? We spoke to super funds, we spoke to consumer groups and we asked questions of regulators. We've been constructive, and we've done the heavy lifting on this issue. Really, we've done the government's job for it, because the minister didn't do much of a job of explaining the shortcomings of the old regulations when he sought to strike them out, and he didn't propose a solution that put the issue to bed. That left plenty of room for the opposition to attack. It also left plenty of room for Senator David Pocock, who, I have to say, slightly disappointingly took context-free numbers out of annual reports to try and wedge the Greens, which actually had the effect of highlighting the problem, with a binary choice between the old regulations and the new regulations.

To date, the debate about this issue has been superficial and at a volume far in excess of its importance. So, yes, let's have superannuation transparency and let's get it right, but to say that disallowing these regulations would be a big win for transparency, as Senator David Pocock did today, is just not right. We're not going to resolve these issues here today, even though the solution is actually very straightforward. We need an annual super transparency report. It needs to be published by the regulator, APRA, and it needs to include tables of all the relevant expenditure—including for political purposes and for profit—for all super funds in the one place so that consumers of superannuation products can make comparisons across funds and so that other people, including journalists, can easily make those comparisons.

In good faith, the Greens have given the minister the time to put in place this proper solution while this disallowance motion and a motion tabled by the Greens remained on the Notice Paper. I'm here today to say that the time is up, and the minister hasn't sorted this issue out. We haven't seen new regulations that would provide a holistic fix. Instead, what I have is the minister's word that he intends to do so, which brings me to another issue.

As we all know, late last year, the minister reached an agreement with the Greens to include within the financial accountability regime fines for executives who breach their accountability obligations. We had an agreement that that would occur, but within 24 hours of that agreement being made public, the minister reneged. After a day of very overt and, I have to say, shameless lobbying by the banks, the minister went back on his word. I say to the minister today that there need to be consequences for this. If the government expects the Greens to be reasonable, then the government needs to demonstrate that we can work with it in good faith. They need to do better than just roll over to the banks.

Last week we found out that the major banks donated over $400,000 to the Labor Party during an election year. When the minister folded on including million-dollar fines for dodgy bankers in a bill that was supposed to be all about stopping bankers who get paid millions of dollars for being dodgy, that was the banks calling in a favour owed. It was institutionalised bribery, but it was out in plain view—out in the open for the whole world to see—and that's the way the banks wanted it. They wanted to send a message to this parliament that actually they are running the show in here, not the democratically elected senators. It was a shameless and overt display of power that was designed specifically to send a direct message to this parliament and, in particular, to the MPs who are members of a party once led by Ben Chifley.

The message to Labor MPs from the banks was this: if you're thinking about curbing bankers' powers or tilting the scales in favour of consumers, then think again because we, the banks, have you, the Labor Party, on a very short leash. This is the question that I now put to the minister and the government: what is more important, donations from the banks and doing as instructed by the banks, on the one hand, or doing the right thing by the Australian public and consumers of banking products, on the other hand? If the government wants to be confident of the Greens' vote and support on matters like this, in this place, then the government will need to do better than be patsies for the banks, and the government will need to make it very clear and demonstrate that we can work with the government in good faith.

In case anything I've said is unclear, I'll finish with this. The way that I would suggest the government and the minister demonstrate that they can work with the Greens in good faith is to come good on what they already agreed to, which is to include million-dollar fines for dodgy bankers in the financial accountability regime. The Greens will be supporting this disallowance motion.

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

I'm pleased to be able to make a brief contribution here on this important matter. This all predates this parliament. It goes back to the last parliament, when the former government sought to enact laws that would make the super funds work in the interests of their workers and members, rather than work for their vested interests that own the trusts. That has been necessary because the funds collect over $30 billion a year in fees. They are guaranteed to get this money. They open the door, the money falls in and they take the high fees.

One of the things that they have done, over the long term, has been to pilfer and find other ways of transferring moneys into their favourite related parties. If you're a bank fund, you find ways to send money to the bank. If you're an industry fund, you find ways to send money off to your favourite employer group or union. The reason we enacted a regulation after we passed the enabling law, which was opposed by the Labor Party—they couldn't bring themselves to vote for a structural reform that would have made the funds work for the workers. The regulation required all of these funds to disclose all of their related party payments.

That was perfectly reasonable. No consumer group was unhappy. No third party could be found that was unhappy with that level of transparency. But the first order of business for the new minister in the government for vested interests, Mr Stephen Jones, was to remove that transparency by making a regulation, late on a Friday afternoon, back in September. This followed the exposure draft of an identical regulation—

David Van (Victoria, Liberal Party) Share this | Link to this | Hansard source

Senator Bragg, I have Senator Ciccone on his feet.

Raff Ciccone (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Forgive me if I misunderstood, but I thought that the honourable senator referred to the minister by an incorrect title. I ask that he refer to the minister by his correct title.

David Van (Victoria, Liberal Party) Share this | Link to this | Hansard source

I ask the senator to do so.

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

I will, certainly. This follows an exposure draft regulation that was provided for comment in July. This was the first act of this new minister, after having won the election. That regulation proposed to gut the transparency, to remove it, so workers could no longer see when their funds were sending money off to the union or bank. So they had a consultation. The FOIs revealed they only had a very targeted consultation with one organisation, the industry funds association, and they came back in September and made the regulation.

The substantial change in this regulation is very simple. Before this regulation was made, you could look at your annual member statement and see that this super fund had paid X dollars to X union. You could see that the first super fund had paid $1 million to CFMMEU. But that was all removed by Minister Jones's regulation.

Then you fast forward through a lot of extensive discussion, led by the crossbench in many ways, and we get to last week. The Australian Electoral Commission come along, and they decide they will release their annual data. In that release they provide the information that Minister Jones has covered up from the workers. So the AEC shows the enormous flow of money from the super funds to the unions of $14 million or $15 million a year ballooning to $30 million by the end of the decade. That's $30 million of retirement savings being sent off to the unions for non-commercial purposes and unknown purposes, which is very, very troubling.

In this fantastic release of data from the Australian Electoral Commission, we find that one fund in particular has been very generous in its payments, and that fund is called FIRST Super. It's rather a small fund. In the last financial year they provided a payment of $2.5 million to the CFMMEU. That's a tiny fund sending that money off to that union. We only know that information because of the AEC. Surely this information is of great interest to the public. I have to say, I'd be very surprised if many members of the public trawl through the AEC disclosures, but I'm certain that many members, many workers, would be very interested and would actually open their member's statement that they receive in the mail each year.

I don't want to detain the Senate for too long, but the substantial points are that we enacted a set of laws and regulations which guaranteed that workers could see where their superannuation money was going, because it's a compulsory scheme and it's the least we can do. The Labor government came in—the government for vested interests—and they worked through the list of grievances and rubbish that had been churned out by their favourite vested interests of the class action law firms, the unions and the super funds. Order No. 1 was to gut the transparency from the super laws, and that's what Minister Jones did. He put it out as an exposure draft, he made no changes and then he made the regulation in September. Then of course, last week, the AEC made an absolute mess of the minister's policy by showing that this very significant sum of money would be disclosed elsewhere.

So here we are back at the Senate, and, before finishing, I just wanted to say that I think the crossbench have done a really great job here in putting this forward. Senator Lambie and Senator Pocock in particular, but also Senator McKim, have all played a really constructive role. It's kind of unbelievable that it has taken so long for the Senate to stand up for transparency in a system that this parliament has put in place. This system only exists because of Canberra. We force 10 per cent of people's wages and salaries into these schemes; the least we can do is show these people where their money is going, and I very much welcome the impending division on this matter.

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

Thank you to Senator Lambie and Senator McKim for lodging this disallowance. It's regrettable that it has taken so long to come to a vote. It would have been much better for everyone who has superannuation, which is most people in Australia, had this happened before the member statements were due last year. We would have been able to see where all this money went, as Senator Bragg pointed out. But we finally got there. Senator McKim has ummed and ahhed for a while and finally wants to send the government back to the drawing board to put transparency at the core of superannuation disclosures. Members absolutely have a right to know where their money is going and how their funds are spending their money. After this disallowance, I encourage the Assistant Treasurer to ensure that any new regulations do just that, because, as we've heard today from all sides of this Senate, Australians want more transparency. They are demanding more transparency. And it's on us to ensure that the government delivers that.

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

At the outset, I really want to convey my regard for the work that Senator David Pocock, Senator Lambie and Senator McKim have done with respect to this matter. This is good stuff. This is what we're meant to be here for. It's a really positive note to end what has been a lengthy day of proceedings.

I'll just make two other quick points. First, for goodness sake, Government! If you are going to do something like this, introduce a regulation like this, don't insult our intelligence. The most flimsy arguments were put up by the government to support this regulation. I can tell you, as someone who served as a company secretary of an ASX company for 12 years, the argument about the cost of compliance imposed on multi-billion dollar organisations that have actual obligations to keep accounts and records was one of the flimsiest arguments I've seen put forward to defeat the principle of transparency. The members have a right to know where their money is going. The members have a right to know where their money is going because, after all, it is their money. So one dearly hopes that a lesson has been learned from this debacle from the government's perspective and we won't see a repeat.

The only other point I want to make is once again to put on the record, as I've previously done in this place, that when Senator McKim came into this place and said he believed, in his view, a deal had been done, I took that at face value. Hopefully those in government might reflect on the results of what has unfolded from what can only be described as a debacle, to be frank. It is a shame it's taken this long to get to this stage, but it's good we got here. Congratulations, Senator Lambie, Senator Pocock and Senator McKim. This is a good result. This is good stuff.

Dean Smith (WA, Liberal Party, Shadow Assistant Minister for Competition, Charities and Treasury) Share this | Link to this | Hansard source

Very briefly, I would like to just echo the sentiments of my coalition Senate colleagues and recognise, like others, that this is an example of the Senate operating at its best, with non-government senators working across the chamber to bring integrity and transparency when the government chooses not to.

In reflecting on Senator Scarr's remarks, I reflect on that wonderful quote from Edmund Burke, who said, 'Sometimes our patience will achieve more than our force.' So I would like to reiterate that the Albanese Labor government tried to reverse a requirement for super funds to disclose how they spend super members' funds on sponsorships and payments—no line items, no transparency and no accountability. These payments from super funds are for things such as $1 million footy sponsorships, corporate boxes, union kickbacks and lobbying. Australians deserve to know how their retirement savings are being spent. The changes that the government wanted to pursue go against recommendations from the Productivity Commission and the Australian Prudential Regulation Authority. 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 of those senators that have been elected on a platform of integrity must support this disallowance.

Going back to where I started, it is great to see non-government senators being able to work in such a cooperative manner to bring real benefits to Australians. With that, I conclude my remarks.

Malarndirri McCarthy (NT, Australian Labor Party, Assistant Minister for Indigenous Australians) Share this | Link to this | Hansard source

The Albanese government is committed to delivering accountability, transparency and good governance in every part of our financial system, and these regulations clean up red tape to ensure that members can access meaningful, useful information about how their money is being spent, not pages and pages of minutiae. We remain committed to working with senators and members to improve reporting so that members have better insights into their retirement savings.

In addition to these regulations, the government will deliver an annual superannuation transparency report to hold trustees to account. Furthermore, we have legislation before the parliament to require superannuation entities to prepare and lodge annual financial reports with ASIC, aligning their reporting obligations with those for publicly listed companies and registered schemes. The regulations introduced by the previous government were an ideologically motivated make-work exercise and did nothing to improve the outcomes for super members.

Linda Reynolds (WA, Liberal Party) Share this | Link to this | Hansard source

The question is that the motion moved by Senator Lambie be agreed to. As a division is required and it's past 4.30, the division will be held tomorrow. The debate is adjourned.