The long history of the Liberal Party’s efforts to destroy industry superannuation funds suggests they’re usually ineffective, and at worst spectacularly counterprodutive.
Like when the Turnbull government included super funds in the banking royal commission expecting it to expose rorts by “union-controlled” industry funds but instead exposed how corrupt and criminal retail super funds were — leading to the mass exodus of the big banks from super.
The recent “Your Future, Your Super” reforms, originally designed to discredit industry super funds by skewing comparison benchmarks in favour of retail funds, are another case in point. This week has seen the release of the first fruits of the government’s benchmarking tool, with 13 MySuper funds deemed as underperformers.
The business press dutifully lined up to focus on the 13 underperformers who had been “named and shamed” — and completely missed the real story.
The 13 funds jointly manage $56 billion on behalf of 1.1 million members in the default product. That’s out of $900 billion in MySuper funds — so about 6% of funds were deemed “underperforming”, covering about 7% of members. And 84% passed. Out of the wider super sector — in which there’s $3.3 trillion under management — $56 billion is trivial.
The government would have been hoping that some big industry funds would have ended up on the list of underperformers — Hostplus, or REST, or CBUS, even AustralianSuper — but sadly they all produced stellar results in 2020-21 of about 20% returns to go with their long-term positions at the head of the super pack.
Instead, Superannuation Minister Jane Hume and her cronies had to settle for naming and shaming the mighty Labour Union Co-Operative — an industry fund with just $4.7 billion in funds — and the Australian Catholic Superannuation and Retirement Fund with $4.6 billion.
And, as always, the Liberals’ plan backfired, because the list is dominated by retail fund BT, with nearly 550,000 members and more than $15 billion in funds, followed by Colonial First State, with more than 230,000 members and $9.2 billion in funds. Without the two retail fund giants, the list of underperformers accounts for about 3% of MySuper members.
It would be good for the relatively small number of industry super funds — there are now just 33 — to consolidate further, with smaller funds joining with the giants to ensure all members enjoy strong returns. But we already knew that — although it may not be too long before the Liberals decide that consolidation, which will increase the power of industry fund giants even further, isn’t such a good idea after all.
The trick is to compel the 93 retail funds to lift their performance to match industry super funds. But we already knew that as well.
As it stands, well over 90% of members know their funds are being managed satisfactorily. If only taxpayers could have the same assurance about the government.
There is absolutely no economic sense to the Liberals attack on Superannuation Funds – Jane Hume and little ‘Joshie’ and ‘Freedom Boy’ should be sent to the corner of the Politics classroom for the rest of the Term for mixing ideology with common sense
I’m afraid there’s lots of economic sense, Terry. Why would the neo-liberals stand by and let ordinary savers have an increasing influence over investment markets and company board performance through industry super funds?
It’s not about economic sense, it’s about breaking any power that the ordinary (wo)man has with money in investable funds. They prefer to have this in private hands rather then member based organisations.
Spot on
The Coalition live in a different Reality.
The results show, what most people outside the Coalition and their supporters already know. that Industry Super Funds are by far the best performing Funds.
I seem to recall a number of senior members of the Liberal and National Parties revealed in their declaration of interests that they had accounts with some of the dreaded industry funds. This seemed to demonstrate that when it came to their personal financial interests they were satisfied to run the associated risk, while dissing those funds and discouraging others from following their example.
Do as I say, not as I do.
But they don’t sponsor/donate to/own the Coalition like the retail funds.
Have you not noticed that it is fundamental to the ‘logic’ of Neoliberalism that when faced with powerful evidence that your ludicrous neoliberal obsessions are nonsense, the response is: It is only so because not enough neoliberal bullsh*t was applied?
Conversely, spreading woofle dust to deter dragons.
If the lack of dragons is pointed out that is proof of the efficacy of woofle dust.
“It is difficult to convince someone of their error if their income depends on its continuation.”
Knowing that industry funds results beat private funds hands down, what is it that motivates those who stick with private funds? I mean, we all have that mad uncle who sticks with private health even though he barely survives on a pension, but I would have thought that those on higher incomes would have more savvy about something like this. Are there other incentives or benefits I’m not aware of? Maybe someone out there can explain it to me.
Have been wondering the same thing. Some kind of snobbish loyalty? Some people refuse to be associated with anything union oriented. While unions have been far from perfect, a lot of the objection is that they stand up for the worker at all and therefore are a barrier to the super rich getting even richer
This is what they are terrified off. Unionists acting like capitalists. They are terrified that they will loose control of the Capital market. Little Johny never wanted his mum and dad shareholders to act in their best interest, only tie them to his ideology.
The Empire Strikes Back!
The ETU just launched a campaign calling on the industry superannuation funds that own Ausgrid to intervene and protect Ausgrid workers.
We need every ETU member to back this campaign by signing the petition and sharing the campaign online and to your networks.
Sign and share the petition:
https://www.dontswitchoffjobs.com.au
Agree but it’s “lose” not “loose”. Different meanings.
Look at the growth of SMSF’s both in numbers and FUM. If ever there is a Sector of the Superannuation Industry that needs a complete review its this one. High Income earners use these rather than Retail Funds, often to their detriment.
Ideology.
Sucks to be a retail fund member, I suppose.