Consumers break with industry funds on making super funds disclose expenditures

Mike Taylor

Managing Editor/Publisher, Financial Newswire

7 September 2022

What has become a traditional nexus between consumer groups and industry superannuation funds has been broken, with consumer groups siding with the Federal Opposition arguing that funds should not be let off the hook on itemising expenditure, particularly political donations.

Super Consumers Australia has aligned itself with Liberal parliamentarians, Senator Andrew Bragg and Stuart Robert in opposing proposed Albanese Government amendments which would allow superannuation funds to report expenditures to annual member meetings in aggregate rather than in detail.

In doing so, the Choice aligned superannuation group has placed itself at odds with Industry Super Australia (ISA), the Australian Institute of Superannuation Trustees (AIST) and the Association of Superannuation Funds of Australia.

The Treasury has made public stakeholder submissions responding to the Government’s proposed amendments, with Super Consumers Australia strongly arguing for the status quo stating “Annual Members’ Meetings are one of the few ways members can exert pressure on their funds directly”.

“Neither aggregate nor itemised expenditure disclosure alone will deliver adequate scrutiny,” the SCA submission said. “What is most important is that disclosure be coupled with quantifiable justifications of how the expenditure is directly benefiting members of the fund.

“For example, knowing the advertising spend for a single television advertisement helps members less than knowing the marketing spend on a particular campaign and how it directly and quantifiably benefited members,” the consumer group said.

“Enshrining obligations to justify expenditure in the regulations will lead to a more efficient use of member money and a more grounded and informed public debate about superannuation fund expenditure,” it said.

Shadow Assistant Treasurer and Shadow Minister for Financial Services, Stuart Robert, used his submission to argue strongly for retention of the former Government’s legislative and regulatory position stating that the proposed amendments “removes transparency, accountability and integrity for super fund members”.

“These provisions are a transparent attempt to remove accountability for super funds and to subvert the will of the previous Parliament. These proposed amendments are being rushed through by the Government so that the transparency and accountability provisions will be overturned before they have even had a chance to be implemented. This will deny members the opportunity to compare the new disclosure regime to the previous one, and one year’s disclosure to another,” his submission said.

The Law Society of Australia also opposed the changes arguing that claims that they are necessary to limit higher costs being imposed on fund members does not hold water.

“The draft Regulations have been assessed as having no more than a minor regulatory impact and accordingly no Regulatory Impact Statement has been prepared,” it said. “While the cost of complying with the current regulations is undoubtably higher than under the draft Regulations, we submit that the focus should not be on cost alone. The current disclosure regime is designed to enable better informed decision-making by members.”