There can be a lot of confusion about lobby groups, particularly when shows like House of Cards portray back door deals and secret handshakes.
The truth is lobby groups are somewhat similar, just much less dramatic.
Earlier this week, Senator Andrew Bragg said superannuation lobby groups shouldn't exist which sparked an angry response from industry super fund lobby group Industry Super Australia (ISA) saying they’re necessary to stand up for the rights of members.
So, let’s take a look at who lobby groups are, what they do, and who they represent.
By definition, lobby groups are organisations put together with the aim of advocating on behalf of a specific group to help influence decisions made by lawmakers.
The argument for lobby groups
There are a few groups in the superannuation industry that have this intention. ISA is one of them, and are instantly recognisable by their ad campaigns of people making a diamond shape with their hands.
ISA states that its purpose is to help participating funds retain existing members as well as attract new ones, and protect those members’ interests by raising awareness of issues that might undermine their retirement savings.
As such, ISA focusses its ad campaigns on demonstrating to Australians the benefits of being in a not-for-profit super fund and provides tools to help Australians compare funds to find the best fit for them.
ISA chief executive Bernie Dean is extremely vocal about changes to superannuation laws, and doesn’t mince his words.
“Senator Bragg’s intent is clear – he wants to use these laws to silence those trying to protect members’ interests, as he cuts workers’ super and tries to funnel their retirement savings into the coffers of his former paymasters at the big banks,” Dean said.
In the financial year 2019-20 ISA had a total revenue of $23 million, the majority of which it said was allocated to its marketing campaign.
ISA is also a fierce advocate for an increase in the superannuation guarantee (SG). As it stands today, the SG rate is 9.5 per cent, meaning 9.5 per cent of Australians' pay is automatically allocated to their retirement savings. This rate is legislated to gradually increase to 12 per cent by 2026.
ISA has dedicated its resources to protecting this increase, and has argued the scheduled rise will protect members’ financial interests, claiming any changes to the increase could “blow a six-figure hole in couples retirement savings”.
“Despite making an election commitment to not interfere with the legislated super guarantee increase the government is now considering cutting it or making other adverse changes,” an ISA spokesperson said.
“These changes could push retirees into having to sell or mortgage their home to get by.”
So, according to their own definition, the purpose of ISA as a lobby group is to protect the members of industry super funds to ensure they are able to enjoy a secure financial future.
The argument against lobby groups
Senator Andrew Bragg said the issue is not quite that simple. Earlier this week Bragg proposed legislation that would see superannuation lobby groups merge.
Speaking to Yahoo Finance, Bragg said the major issue with superannuation lobby groups is that they’re spending members’ money just to tell them what a good job they’re doing.
“It’s an industry that has its tentacles deep into all parts of the country, and when we have conducted inquiries it’s very clear that almost everyone has been bought,” Bragg said.
“So, there are very few people advocating for the genuine interests of consumers.”
Bragg is part of the Senate Economics Legislation Committee which has been holding hearings over the proposed Your Future, Your Super legislation.
Bragg said Australians are spending more money in superannuation fees than they are on their power bills, and members shouldn’t be expected to fund campaigns aimed towards them.
“There is a huge amount of wastage and the fees are too high, and part the reason they are so high is because they go towards payments to unions, advertising and lobby groups,” he said.
“There are just too many of them. We see the same people coming to Canberra to tell us the same thing.
“As a legislator, if I’m going to pass laws that take away people's money then we’d better make sure it’s money that is being looked after well.”