Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

The Senate will now consider the proposal from Senator Bragg, which has been circulated and is shown on the Dynamic Red:

Pursuant to standing order 75, I give notice that today I propose to move the following matter of public importance to the Senate for discussion:

"When Cbus Super breaks the law, the workers' pay, because the Albanese Government will always protect Mr Wayne Swan, industry super and the unions over the interests of Australians, who are seeing the dream of home ownership slip further away".

Is the proposal supported?

More than the number of senators required by the standing orders having risen in their places—

Andrew Bragg (NSW, Liberal Party, Shadow Assistant Minister for Home Ownership) Share this | Link to this | Hansard source

The government of Australia is about to preside over the greatest conflict of interest in modern times, because the government of Australia is going to allow major super funds to pass on enormous regulatory fines for their wrongdoing to their members. The trustees of these major funds who have made huge errors will have these fines paid by the workers. It's a howling conflict of interest which goes to the centre of this government, where one of the main players is the National President of the Labor Party, Mr Wayne Swan, who is also the chair of Cbus Super. The Labor Party was surprised, apparently, when Nick McKenzie of 9News exposed heinous crimes of the CFMEU. These, with the CFMEU's 30 per cent tax on Australian building, have inflated the building costs for all Australians and have made the Australian dream further out of reach for younger people wanting to buy an apartment.

The conflict of interest in relation to Industry Super and Cbus was well known and has been for a long time. In fact, Jeremy Stoljar, the counsel assisting the Hayne royal commission, said of the Cbus CFMEU issue that Cbus was infected by the separate private interests of the CFMEU and a deep-seated loyalty to these interests. A review by Mr Graeme Samuel, the former head of the ACCC, recommended the end of this model. He said of Mr Swan: 'It's a very powerful position to hold as chair. It sets the tone and culture of the organisation. If he's got a tendency or history supporting certain groups, then you've got a problem.' He said, 'And Wayne Swan is a perfect example of a political operative, so then you have a question about the absolute independence of the chair.' That was the view of Graeme Samuel almost 10 years ago, when he recommended reforms to Cbus and the super funds, which have not been adopted. The prudential regulator, APRA, has now had to come in and commissioned a new inquiry into Cbus's governance—the same thing that Graeme Samuel did 10 years ago. APRA, I'm sure, is going to have to recommend that there is a better system here which protects workers.

Yesterday, the CFMEU, which owns Cbus, tried to put three new directors onto the board of the fund. APRA apparently seems to be resisting this. The issue here of conflicts of interest is enormous, because Mr Wayne Swan, as the chair of the Cbus fund, has publicly committed $500 million to the Housing Australia Future Fund. That's usually a role reserved for the chief investment officer, but no; the president of the fund, who is the president of the Labor Party, apparently commits members' money to the government's boondoggle housing scheme. Then the Treasurer, Jim Chalmers, covers up the secret lobbying undertaken by Mr Swan through bogus public interest immunity claims made here in this parliament. It's appalling. But the main point is that, when they make a mistake, you pay. The trustees have made a mistake, according to the Australian Securities and Investments Commission. Cbus fails to pay insurance claims. So the workers of Australia pay insurance premiums for decades in some cases, and, when there is a family bereavement, the super fund refuses to pay. That is the opinion of the corporate cop and the Financial Complaints Authority. When they issue a fine—and, in this case, Cbus might be facing a $50 million fine—that fine is passed on to the members. So the poor old members pay these fees.

Where is Labor on this issue? We've asked the question—we asked Senator Gallagher in the Senate. Her view is that it's a matter for the regulator. But, when there were issues of corporate malfeasance, the Treasurer was fast to condemn Woolworths, where he said, 'I need to be careful not to pre-empt, but I will say this: we don't want to see ordinary Australians, families and pensioners being taken for a ride by the big supermarkets.' But, on the Cbus issue, he says, 'It's really important that regulators can do their job, and I won't be making any further comments.' So the government is quick to condemn wrongdoing in corporate life, corporate Australia. They wouldn't even vote yesterday to disclose the Samuel review and they worked with the Greens—the Greens have been big on PwC—but they're small on Cbus. The question is: why do the workers of Australia have to pay for this ridiculous conflict of interest?

The super funds are privileged people. They open the door; the money falls in. The least they can do is treat people with respect, pay their claims and do the right thing. We shouldn't have a situation where the Treasurer is using his position to cover up for the crimes of Mr Swan and the Cbus super fund. It's a disgrace.

Tony Sheldon (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Conflicts of interest and bias are very good finishing points, because Senator Bragg's job for virtually his entire career before being elected to the Senate was being policy manager at the Financial Services Council. That means his job was to develop and push out policy ideas on behalf of the Financial Services Council members. Who are those members? They are big retail super funds like AMP and Colonial First State. That really tells you all you need to know about this motion. When we talk about vested interests in this place, it doesn't get any more vested than that. The massive for-profit super funds who have consistently charged their members higher fees and generated lower returns sent their chief lobbyist into the Senate via the Liberal Party, of course.

Now he comes in here every week and makes the same comments on the same policy initiatives. It's worth remembering that, while Senator Bragg was managing policy at the Financial Services Council, its members engaged in some of the most disgraceful corporate misconduct ever seen, as was revealed in the banking royal commission: billing the dead for financial advice, deliberately misleading regulators, lending to people with no capacity to repay, charging fees for no service and pushing dodgy financial advice and insurance products onto vulnerable people. Somehow being the policy officer for these companies qualified him to be put at the top of the Liberal Party's New South Wales Senate ticket, which tells you all you need to know about the cosy relationship between the Liberal Party and the biggest rip-off merchants in this country.

Listening to Senator Bragg talk about what is best for your superannuation is like listening to Alan Joyce talk about what's best for aviation policy. Let's talk about Cbus. The Chant West Super Fund Awards are one of the most prestigious awards for the super industry in Australia. Earlier this year, at the 2024 awards, Cbus Super was recognised as the best fund for responsible investment, named the best fund for member services for the second year running and named the best specialist fund of the year for the fifth year running. It was also shortlisted in the top three for Super Fund of the Year. I noticed something else interesting in the shortlist for Super Fund of the Year. Of the 10 funds shortlisted, there was not a single retail fund. It almost makes you wonder if the retail for-profit funds charge higher fees, deliver worse services and generate inferior returns. In fact, we know that it's true because modelling by independent body SuperRatings has consistently found this to be the case.

On one hand, industry super funds, including Cbus, are consistently recognised as delivering better outcomes for members, charging lower fees and generating higher returns. On the other hand, you have retail super funds consistently delivering worse outcomes for members, charging higher fees and generating lower returns and being exposed by a royal commission as grossly extorting and ripping off their members with ridiculous fees while deliberately misleading regulators. So why does Senator Bragg hate industry super so much? Why does he lobby so hard for retail super? Could it be because of his previous employment as their policy manager, or maybe he just hates the idea of unions and employers working together jointly managing super funds and delivering better returns for members?

And lastly, there was an important announcement yesterday made by Cbus titled 'Independent review confirms Cbus Super directors fit and proper'. It goes on to say:

All existing and new directors on the Cbus Super board have satisfied a 'fit and proper persons test' as part of an ongoing independent review being conducted by Deloitte at the direction of APRA.

…    …    …

After applying a comprehensive 'fit and proper persons test' the Cbus Board confirmed the appointment of three directors nominated by the CFMEU.

They are Paddy Crumlin, Jason O'Mara and Lucy Weber. I'd like to congratulate the new board appointments because it's critically important that construction workers have representation on the construction industry super fund. Anyone who tells you otherwise might be looking out for their own vested interests in the banking industry.

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

I rise today to support Senator Bragg's motion. I'll just pick up Senator Sheldon on those board appointments. The question I'll ask Senator Sheldon is: were those board members elected by the members of that fund? They weren't; they were selected.

In the People First Party, we are proposing a policy that all board members of superfunds have to be elected because democracy matters when it comes to capitalism. I know the Australian people weren't given a choice in 1992 when Paul Keating decided to take two per cent of their wages and give it to someone they'd never met. Had he been honest with the Australian people back in 1992 and said, 'By 2025, I'm going to take 12 per cent of your hard-earned wages and I'm going to give it to someone you've never met and you may or may not get it back when you're 67,' I strongly doubt the Australian people would have ever voted for such a scheme.

That is the problem with superannuation; it is undemocratic and it is effectively communism by stealth. Today we have almost $3 trillion in the superfund industry. I'm going to be honest here and I'm going to be critical of the Liberal Party as well. Howard and Costello should have killed superannuation stone-cold dead in 1996, when they first got into power. But they didn't do that. They hopped on the gravy train and, as Senator Sheldon rightly points out, because the private superannuation funds were milking fees the Commonwealth Bank bought Colonial Mutual, National Australia Bank bought National Mutual, Westpac bought Bankers Trust and ANZ did a joint venture with ING. I well remember being shocked one year when Colonial Mutual's return on equity was 66 per cent. Of course they could earn such a high return on equity because it wasn't their equity they were playing with.

We well know the Productivity Commission came out in 2017 or 2018, I think, so it would be more by now, and said there is $30 billion a year spent on managing money in superannuation and that was because it was effectively one per cent of the $3 trillion under management. That's expected to grow to $9 billion by 2050. But let's get to the nub of what this motion is about: Cbus hasn't been paying out people's superannuation upon death.

I've had people come to me in my own office. They've had to struggle to get their pay outs. One lady, her fiance died at the age of 40 after getting the AZ vaccine. Her fiance suddenly dropped dead and she was unable to get any money. It's only because she's just gone public with it that she's been able to get her fiance's money out of superannuation. It has taken over a year for Cbus to pay that money out. That is an absolute disgrace. Apart from the fact that super needs to be voluntary in the first place, there need to be clear rules and guidelines as to how quickly money is paid out from superannuation upon the death of a person. They are playing games. They are basically abusing their inherent power to deny people who can't afford legal costs their right to their loved one's superannuation. It bells the cat on the whole fact that superannuation was never designed to help the people they're taking the money from. It was never designed to help the workers.

We know today that there are still 50 per cent of retirees on a full pension. That is the same percentage of retirees that were on a full pension in 1992. There are $50 billion in tax concessions that go mainly to the upper 30 per cent, yet that pension only costs $53 billion. So who's winning here? It's certainly not hardworking Australians. To think that when their loved ones pass away they cannot access their money out of superannuation is an absolute disgrace.

What's going to be an even a bigger disgrace now is that the other superannuation members of Cbus are going to have to pay the fines because their board members, who they never elected, were too incompetent to actually ensure a timely payout of death benefits upon death. That's because they don't really want to give your money back to you. They want to keep it for themselves so they can continue to milk fees and live off those rivers of gold at the expense of hardworking Australians.

Maria Kovacic (NSW, Liberal Party) Share this | Link to this | Hansard source

I thank Senator Bragg for bringing forward this matter of public importance because it is incredibly important that we shine a light on the concerning relationships between industry super funds, their leadership and the Australian Labor Party, this government. It is concerning because of the absolute lack of regulatory enforcement that we see with respect to industry super funds. I thank Senator Bragg for the work he does to draw attention to these disturbing facts. What was discovered at Senate estimates was of significant concern. Every worker with funds in one of these funds, particularly Cbus, should understand what is actually going on. We need to be very conscious of this government's attempts to protect their mates running industry super funds and the funds' habit of using their members' money for the political gain of the ALP.

Cbus is the only super fund to have committed its members' money to Labor's Housing Australia Future Fund. Who from Cbus announced this decision? It was Mr Wayne Swan, the former Labor Treasurer of Australia, former Deputy Prime Minister, current National President of the ALP and chair of Cbus. This is the same Cbus that currently remains under the ownership of the disgraced CFMEU. This is despite the CFMEU being put into administration by this parliament. We all remember the government being dragged, somewhat kicking and screaming, to support it. But the CFMEU's 21 per cent stake in Cbus still remains as well as their three board seats. Think about that. Let's reinforce that: despite being in administration, they have three board seats. That's not quite in line with basic governance, in my view.

Now we have heard that ASIC is alleging Cbus failed to properly administer and pay insurance claims for bereaved families. This isn't a small AUM fund; this is a massive fund with massive resources failing to pay insurance claims for bereaved families on time. This super fund is the same one that has been a key adviser to the government on its housing policy. It's no wonder this government has built a grand total of zero homes in a housing crisis. Like most things this government has done, it sets up bureaucracy after bureaucracy to sustain rent seekers in the trade union movement and in the industry super sector. Cbus has sat on a paid advisory committee to consult the government on the HAFF legislation, something that was only uncovered under FOI. Again they are the only super fund to have committed their members' money to the HAFF. This is despite the serious allegations of criminal behaviour and misconduct in the CFMEU. They are the same bodies that have brought on a 30 per cent increase in construction costs. That's according to the Real Estate Institute of Queensland. These are the same people that have compounded the housing crisis, and now, despite all of these veritable red flags, the government seems to think that these are the same people that can solve the problem that they had their hands in creating. This is in spite of significant evidence to the contrary.

In 2023-24 we saw the lowest homebuilding commencements in over a decade, down 8.8 per cent and far below the level under the coalition government. But, if anything, Cbus's sensational appearance at Senate estimates really highlighted the operational dysfunction at Cbus head office. We saw an attempt to evade the committee, and they were constantly rejecting invitations to appear. Then, at the eleventh hour, they decided to appear, and the testimony was shocking to say the least. The CEO, Mr Kristian Fok, revealed that Wayne Swan, the chair, makes announcements about housing investments without the CEO's knowledge. And, when asked about documents discovered under FOI showing communications between Mr Swan and the Treasurer, Mr Fok sensationally revealed that he had no knowledge of these discussions. The CEO was unaware of communications between his chair and the Treasurer of Australia, an oversight perhaps. But it's an oversight that Australia's workers continue to— (Time expired)

Jess Walsh (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Another day in the Senate, another attack on Australia's superannuation system from Senator Bragg. Senator Bragg has been offering up some pretty out-there ideas for Australians to raid their super and to dismantle our world-leading superannuation system in this country. The senator's ideas are risky, they are getting increasingly weird and they are wacky.

The first idea was to somehow help young Australians buy a home by raiding their super. That's where everyone takes $50,000 out of their super and puts it into the housing market. What does that do? It pushes house prices up. Everybody knows that. What else does it do? It reduces your retirement savings. It does both of those things without building a single home. That is, on its own, a pretty weird idea. But what we have next from Senator Bragg in his efforts to dismantle our superannuation system is an even more weird and wacky proposal, which is to use your super as collateral for a house. That's a proposal that risks your super and your home at the same time if you fall behind on your mortgage payments.

These ideas are risky to Australians. They are risky when it comes to the housing market and they are risky when it comes to the retirement of Australians. These are not genuine efforts to get Australians into their first homes. What they are is genuine efforts to dismantle Australia's superannuation system. All of this of course started with the Liberal's COVID early release scheme. It was early release of people's hard-earned superannuation, and it was a complete failure that led to massive amounts of regret. Research shows that people who took out $20,000 during the pandemic will retire with $120,000 less in today's terms when they come to their retirement. That's $120,000 gone. Because lessons have not been learnt on that side of the chamber, they think raiding your super to buy a house is a solution. The reality is it won't help a single person. It will push house prices up, it will reduce your retirement savings and it won't build a single house.

We think that Australians should be able to buy a house and that they should be able to retire with some dignity and security in their retirement as well, founded on a strong superannuation balance. That's why we've expanded the Home Guarantee Scheme. One-third of first home buyers have bought their first home using the expanded Home Guarantee Scheme. That is a way to help people get into their first home. We on this side of the chamber want to help people even more. That's why we have our Help to Buy bills before the chamber to support 40,000 Australians to get into their first home with as little as a two per cent deposit. But what we know is that the coalition have teamed up with the Greens to block 40,000 Australians from getting access to help to buy their first home.

We believe in homeownership and we believe in strong retirement savings and that is why we are building up Australia's world-leading superannuation system. Don't let Senator Bragg and the Liberals talk down our superannuation system. This is a world-leading system. It is the envy of the world. It is delivering retirements to Australians that mean for the first time they don't need to rely just on the aged pension but can retire with some dignity and security. It is a proud Labor legacy and it is one that we are building on. We are building on it with superannuation on paid parental leave to help close the gender pay gap even further.

We stopped the freeze on the superannuation guarantee to enhance people's retirement savings more. And we are going to make sure that superannuation is paid on payday to end the wage theft of people 's superannuation savings. Superannuation is a world-leading system, one Australians can depend on, and we will always build on and improve Australia's superannuation system.

Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

Isn't it telling that in this debate from those opposite there has hardly been a mention of the word 'union'? For those listening along at home, you know why just as well as I do that the link between the union movement and the Labor Party is well-known, well-ventilated and it is what the Labor Party never want to say when it comes to their defence of the superannuation system—that the link between the union movement and the superannuation system is corrosive. It has at the very least the whiff of corruption about it—and I will use that term—and Senator Kovacic has very clearly enunciated why.

Let me just paint you a picture of a reverse scenario. Let's just say there was the chairman of a company who just happened to be the president of the Liberal Party of Australia and that company was doing big deals with a Liberal government. Senator Kovacic, do you think those opposite might be slightly concerned by that sort of an arrangement?

Marielle Smith (SA, Australian Labor Party) Share this | Link to this | Hansard source

Through the chair, please.

Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

I suspect they probably would. And what have we got here? As Senator Kovacic very clearly outlined, we have the current president of the Labor Party, the former Treasurer of Australia—a failed Treasurer but we will put that to one side—the chairman of an industry super fund who can communicate directly with the Treasurer about a government policy and then commit that super fund to investing in that government policy.

That is more than a whiff of corruption, Senator Ayres. That is an absolute disgrace. If the situation was reversed, Senator Ayres—

Marielle Smith (SA, Australian Labor Party) Share this | Link to this | Hansard source

Order! Order! Through the chair, please.

Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

you would be the first one jumping up and accusing people of corruption. You would be the first one jumping up.

Marielle Smith (SA, Australian Labor Party) Share this | Link to this | Hansard source

Senators, I have called order a number of times, thank you.

Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

A chairman of an industry super fund communicating directly with the Treasurer about a government policy, and what did the CEO of that fund have to say? The CEO of that fund said, 'Mr Swan made announcements on housing funding without the CEO's knowledge.' My goodness me. This has more than a whiff of corruption about it. The President of the Labor Party, communicating directly with the Treasurer, commits an industry super fund that should only be responsible for the money of its members to supporting a government's policy without telling the CEO. I mean, this is absolutely unbelievable. In fact, the CEO had no knowledge of the discussions between Mr Swan, the President of the Labor Party and Treasurer Chalmers regarding a $500 million commitment to this Labor Party policy.

That is an utter disgrace, and it reveals the cancer at the heart of the industry super fund system—the fact that the industry super funds have these guaranteed board positions for union members. The union, in this case, is the CFMEU, a union that this Labor government, kicking and screaming, has put into administration. You couldn't write this as a script for a Hollywood movie—the president of the Labor Party has been talking directly to the Treasurer about investing $500 million of members' money in a Labor government policy. Surely Mr Swan had the brains to realise that that was an extraordinarily crass, dangerous and potentially corrupt thing to do—surely! It's absolutely unbelievable that this is the way the chairman of a super fund would behave, it's absolutely unbelievable that the Labor Party would defend this, and it's absolutely unbelievable that they cannot see this core of corruption at the heart of the industry super fund system. (Time expired)

Marielle Smith (SA, Australian Labor Party) Share this | Link to this | Hansard source

The time for the discussion has expired.