In his latest media release, Liberal senator and shadow assistant minister for home ownership Andrew Bragg accused Labor of “burying its head in the sand” by denying any scrutiny into the “CFMEU–Cbus cartel”.
The senator has, on a number of occasions, sounded the alarm regarding allegedly close ties between the Construction, Forestry and Maritime Employees Union (CFMEU) and industry fund Cbus, as well as Cbus’ role in the Housing Australia Future Fund (HAFF).
Last month, he introduced a bill to the Senate aiming to amend the HAFF’s governing legislation to prevent investments in housing-related projects that Cbus has or will invest in. Labor subsequently refused to refer the bill to an inquiry.
In his latest statement, Bragg said Labor has, once again, blocked the referral of the bill because it is “afraid of any scrutiny into the CFMEU–Cbus cartel”.
“There was strong opposition and crossbench support for the motion, which was defeated by a single vote,” the senator said.
He alleged that the CFMEU owns 21 per cent of the Cbus fund and accused Labor of “denying any scrutiny of the CFMEU–Cbus cartel” by hesitating to support the bill.
InvestorDaily understands that Cbus shareholders include all of its sponsoring organisations, including the CFMEU, the Master Builders Association, the Australian Council of Trade Unions and others.
In recent weeks, the senator has levelled serious allegations against Cbus and the Labor government, accusing them of “locking young people out of the Australian dream”.
Moreover, the senator last week issued a statement claiming that documents released by the Information Commissioner under an FOI revealed that super funds, including Cbus, sought to become “corporate landlords”.
“In another integrity issue for Labor, the Treasurer Jim Chalmers and super fund Cbus have engaged in a cover-up and made false claims. The documents reveal the deep ambition of super funds to become corporate landlords,” Bragg said.
According to the senator, Cbus and Wayne Swan sought “a special deal to exempt funds from reporting the cost of their corporate housing plan to their members”.
“Their special deal would have covered up the costs of stamp duty in their residential real estate transactions,” he said.
“Jim Chalmers was so concerned about these documents being made public that he filed a public interest immunity claim last year to prevent their release.”
Cbus’ chief investment officer, Brett Chatfield, responded to this in a written statement, strongly denying Bragg’s allegations.
“This is yet another false and misleading claim from Senator Bragg,” he said.
“Cbus Super, like others in the industry, has for a long period proposed that the reporting of investment transaction costs be better aligned between unlisted direct investments and listed investments.
“This is to ensure a like-for-like comparison, and not penalising funds that invest directly including in development activity, which creates jobs and supports the real economy. This change would not only apply to superannuation funds but all investors that are subject to RG 97 requirements.”
Under the proposal, Chatfield said, all fees and costs (including stamp duty) would continue to be reflected in net investment returns, which is ultimately what matters most to members.
“This long-held view has nothing to do with the HAFF nor the proposed debt product that Cbus Super has been working on with other large institutional investors, given stamp duty and related costs are not relevant from a debt perspective,” the CIO said.
He also denied that Cbus Super has committed any money to the HAFF, adding that it “rather provided a high level indication of potential interest in such a product should the risk/return settings be attractive for our members”.
“During the previous Coalition government, Cbus invested $150 million into the bond issuance from the National Housing Finance Investment Corporation (precursor to the HAFF) and NHFIC raised over $3 billion for the construction of over 7,000 new social and affordable homes.
“Then housing minister Michael Sukkar welcomed Cbus’ investment”.
Labor ‘protecting union-affiliated industry funds’
Also last week, following news that the Australian Prudential Regulation Authority (APRA) has commenced proceedings against a CFMEU-linked First Super director, members of the opposition again accused Labor of protecting “their union-affiliated, industry super funds”.
The prudential regulator alleged that Michael O’Connor, also national secretary of the CFMEU’s manufacturing division, breached several director covenants in the Superannuation Industry (Supervision) Act, including acting honestly, exercising prudent care and diligence, prioritising beneficiaries’ interests, and managing conflicts of interest.
Shortly after, shadow treasurer Angus Taylor, Senator Michaelia Cash, and shadow assistant treasurer Luke Howarth issued a joint statement calling for “rigorous” consumer protections in the super industry, alongside better governance, to ensure consumers are in charge of how their money is spent.
“Revelations today of APRA investigations into allegations union-appointed super fund directors breached their director duties should raise alarm bells for all Australians,” the senior members of the opposition said.
“Allegations of directors using their position to direct contracts to the CFMEU highlight the need for rigorous consumer protections in the super industry, as well as better governance,” they said.
The trio also accused Labor of “protecting their union-affiliated, industry super funds and donors with ideologically driven reforms”.
APRA also recently issued a directive for Cbus and two building industry funds managed by BUSSQ to undergo independent reviews, to determine whether their CFMEU-affiliated directors were fit for their roles.
Shortly after, all three CFMEU-appointed board directors resigned from the Cbus fund’s board of directors in a move believed to have been orchestrated by the administrator of the troubled union.
Speaking to InvestorDaily at the time, a spokesperson for Cbus said the departure of the three directors does not impact the daily operation of Cbus and does not influence the fund’s “unwavering focus on protecting and growing the retirement savings of our 925,000 members”.
