By Michael Pascoe
The big banks are murderous foxes determined to slaughter a little girls’ pet chooks, according to the major industry superannuation funds. As if our banks weren’t having enough public relations problems at present.
The television ad launched by Industry Super Australia is gruesome enough to give kiddies nightmares. Wolf Creek 3: The Henhouse. (Make sure your hens don’t see or they’ll never lay again.)
And the politics behind the industry funds declaring outright war on the banks’ looks like getting bloody as well. The advertisement was signed off by the full ISA board – which is chaired by former NSW Liberal leader Peter Collins and includes the employer representatives of Australian Industry Group.
AIG chief executive Innes Willox was Alexander Downer’s chief of staff when he was foreign minister. Willox also sits on the board of our biggest super fund and key ISA member, AustralianSuper.
The ISA campaign is interesting in that it takes aim at the banks for lobbying the coalition government to make life harder for industry funds and improve banks’ access to compulsory super accounts.
By implication, the federal government is taking instructions from the Big Four banks to help them get their hands on workers’ super savings. It’s a big step up from merely comparing the average for-members industry fund outperforming the retail for-shareholders funds.
The cunning part of the campaign is that it overlooks the strong desire within parts of the Liberal Party to curtail the industry funds to damage Labor and unions, not because it would help the bank-dominated retail super funds. Some Liberals believe the industry funds provide covert financial support for unions which in turn finance Labor. It doesn’t matter whether it’s true or not, it drives the anti-industry fund fervour. Given the strong performance of the industry funds and the fact that union representation on the industry fund boards is matched by employers, you’d wonder why they’d bother with such a fight when they have so many other bushfires to put out.
Yet when Josh Frydenberg was made Assistant Treasurer in 2015, he made it clear winding back the industry funds was one of his key priorities. The present holder of that portfolio, Kelly O’Dwyer, also has been pushing back on the industry funds, ignoring the various bank scandals in that space.
It might be convenient for ISA chief executive to blame the banks. The banks could be pressured to distance themselves from the government’s policies. The banks also have other bushfires.
According to the ISA chief executive, David Whiteley, the banks are demanding:
Abandoning the long-standing safeguard of short-listing high quality defaults to protect employees who do not actively choose their own super fund;
De-linking super from employment laws to maximise cross-selling and bundling opportunities;
Diluting member and employer representation on not-for-profit super fund boards through uniform governance standards based on the bank model.
“The changes, elements of which the Government has already attempted to implement, would dismantle the governance model of the not-for-profit super funds; remove super funds from employment Awards; and put at risk the long term investment outperformance of industry super funds,” says Whiteley.
“The banks want to replace the cost-efficient and high performing not-for-profit model with cross-selling to consumers and by bundling business banking and super with employers.”
The campaign will make board meetings more interesting at super industry gatherings where both sides are represented. And the great irony is that the banks are substantially owned by the industry super funds.