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senate vote 2022-10-25#7
Edited by
mackay staff
on
2022-10-27 15:34:55
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Title
Regulations and Determinations — Superannuation Industry (Supervision) Amendment (Annual Members' Meetings Notices) Regulations 2022; Disallowance- Regulations and Determinations - Superannuation Industry (Supervision) Amendment (Annual Members' Meetings Notices) Regulations 2022 - Disallowance
Description
<p class="speaker">David Pocock</p><p>I move:</p>-
- The majority voted against a [motion](https://www.openaustralia.org.au/senate/?id=2022-10-25.145.2) introduced by ACT Senator [David Pocock](https://theyvoteforyou.org.au/people/senate/act/david_pocock) (Independent), which means it failed. This means that the regulations mentioned in the motion will remain as part of our law.
- Read more about Senator Pocock's reasoning for this motion in [his speech](https://www.openaustralia.org.au/senate/?gid=2022-10-25.145.3).
- ### Motion text
- > *That the [Superannuation Industry (Supervision) Amendment (Annual Members' Meetings Notices) Regulations 2022](https://www.legislation.gov.au/Details/F2022L01162), made under the Superannuation Industry (Supervision) Act 1993, be disallowed [F2022L01162].*
<p class="italic">That the Superannuation Industry (Supervision) Amendment (Annual Members' Meetings Notices) Regulations 2022, made under the Superannuation Industry (Supervision) Act 1993, be disallowed [F2022L01162].</p><p>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.</p><p>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.</p><p>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.</p><p>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.</p><p>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.</p><p>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.</p><p>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.</p><p>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.</p><p>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.</p><p>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.</p> <p class="speaker">Glenn Sterle</p><p>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?</p> <p class="speaker">Malcolm Roberts</p><p>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.</p> <p class="speaker">Glenn Sterle</p><p>Absolutely, no dramas. With the indulgence of the Senate, Minister?</p> <p class="speaker">Jenny McAllister</p><p>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.</p><p>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.</p><p>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—</p> <p class="speaker">Gerard Rennick</p><p>It's a world-class rort!</p> <p class="speaker">Jenny McAllister</p><p>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.</p><p>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.</p><p>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.</p><p>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.</p><p>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.</p><p>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.</p> <p class="speaker">Hollie Hughes</p><p>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.</p> <p class='motion-notice motion-notice-truncated'>Long debate text truncated.</p>-
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