At 10 minutes to 10pm on Tuesday evening, as most Australians tuned in to watch the Socceroos draw with Japan in the World Cup football qualifier, Paul Fletcher MP, federal member for the safe Liberal seat of Bradfield on Sydney’s upper north shore, gave a speech to an almost-empty parliamentary chamber.
Mr Fletcher, who sits on the Parliamentary Joint Committee (PJC) on Corporations and Financial Services and has often voiced publicly his views on Australian business, took the opportunity to visit an old chestnut for Liberals: the links between trade unions and industry superannuation funds.
“I am very pleased to rise to speak on the issue of the economic power exercised by the major unions in this country through their capacity to appoint directors to industry and public sector superannuation funds, which have funds under management totalling hundreds of billions of dollars,” the former Optus executive told the House of Representatives.
“This power exercised by the unions through this mechanism reflects the playing out of a strategy adopted by the Hawke-Keating government in the early 1990s under which the so-called equal representation model was established, whereby directors of industry and public sector superannuation funds are appointed in large number by unions,” echoing an oft-voiced pet peeve of the Howard government.
While a Coalition MP rising in parliament to voice concern over the labour movement’s supposed control of industry superannuation is nothing new, Mr Fletcher drew attention to recent Australian Prudential Regulation Authority (APRA) figures, indicating this is a rolling issue in Coalition thinking.
Given the central role Mr Fletcher plays as a member of the PJC within the Coalition's financial services policy wonk ranks, super fund chiefs may wish to sit up and take notice.
Mr Fletcher proceeded to present to the House APRA figures pertaining to funds under management of a snapshot of industry funds, and the numbers of super fund directors appointed by some of the most prominent trade unions.
“The most recent statistics issued by APRA in January show that there are 71 funds that APRA classifies as public sector or industry funds,” he said.
“If you look at the annual reports of these 71 funds, you discover that the total funds under management exceeds $380 billion — so, by any measure, a very large amount.
“Across these 71 public industry and public sector funds, analysis of their annual reports reveals a total of 551 directors and, of these directors, 171 were appointed by unions, and a majority of those directors appointed by unions were union officials.
“It is particularly instructive to look at which unions appoint large numbers of directors across some of the major funds. There is a very clear pattern in which large unions and large union peak bodies extend their influence across a large number of major superannuation funds.”
In conclusion, Mr Fletcher drew attention to aspects of the Fair Work Australia reforms – instigated by the Rudd-Gillard governments – that have, in his view, exacerbated union control of superannuation funds.
This trend is “continuing to play out today in a very significant way”, he said.
