Why is the Government so determined to break industry super?

Font Size:

The Government reintroduced legislation into Parliament yesterday aimed at changing the make-up of superannuation fund boards.

The proposal mandates the make-up of superannuation fund boards to include one-third independent directors and an independent chair.

The Government last tried to pass the legislation through Parliament in 2015, but it failed to pass through the Senate, with the legislation failing to gather support from the Labor Party or the cross benches.

The legislation is being strongly opposed by industry super funds, which favour the equal-representation model of appointing directors from employer and union groups.

The industry funds rightly argue that the current system serves them well, consistently out-performing bank funds by a significant margin.

In fact, last month the Australian Prudential Regulation Authority (APRA) released figures showing that in the past financial year, industry funds delivered an average return of 10.7 per cent, compared to 7.8 per cent for super funds run by financial institutions, a gap in performance of 2.9 per cent.

The most galling thing about the proposals is they come at a time when the poor governance, culture and conduct within banks and their wealth-management arms are at an all-time low.

Industry Super Chief Executive David Whiteley said: “Industry super funds are deliberately different and have been immune to the scandals that continue to cause significant consumer loss and hardship.

“Member-first governance and culture is the reason industry super funds outperform bank-owned super funds.”

“The success of the trustee governance model is evident in the outperformance of the industry super sector over the bank-owned super sector,” said Mr Whiteley.

If the Government wants to reform superannuation it should look at the parts that are not working.

Earlier this week, the Nick Xenophon Team (NXT) introduced legislation to try and fix the unpaid superannuation problem that has cost Australians $17.1 billion.

Addressing the gender gap in superannuation is infinitely more important than trying to fix a system that isn’t broken.

Speaking at the launch of the new Women in Super (WIS) Make Super Fair campaign, National Chair Cate Wood said the crisis in retirement outcomes for women warranted an urgent rethink of how the superannuation system can better deliver for half of the population.

“When around 40 per cent of older single retired women live in poverty, we need to stop and say enough is enough,” Ms Wood said.

“We must do better than a system that sees women retiring with 47 per cent less than men. This is a crisis and unless we act now we will be leaving a tragic legacy for younger women. It is not fair or reasonable to simply tell women to fix the problem themselves. We need to get the basics right.”

Some of the WIS suggestions include paying super on paid parental leave, an immediate increase of super contributions to 12 per cent and an annual $1000 super contribution to provide a fair share of support for low-income earners, up to a super balance of $100,000.

All of these suggestions seem significantly more urgent than changing the way industry super funds are run, which has generally worked in favour of members.

What do you think? Why is the Government so determined to break a winning formula with industry super funds?


Nick Xenophon Team aims to fix unpaid super problem

Plan to align superannuation guarantee payments to the wage cycle.

How many times is your super taxed?

The taxman has many ways of extracting a share of your super.

Latest APRA figures reveal industry super funds are still the best

The performance gap between industry and retail superannuation funds is widening.

Written by Ben


Sign-up to the YourLifeChoices Enewsletter

continue reading


How to boost your gut health and immune system this winter

A healthy gut is key for overall health, and affects so much more than just our digestion. With links to...


Things people who grew up in the '70s will remember

If your childhood or teen years happened to fall in the 1970s, you probably have a lot of fond memories...

Food and Recipes

The favourites that send food lovers pie-eyed

Pies, pies, pies. For some of us it's the flaky pastry and gooey filling. For others, it's the firm shortcrust...


How much of a risk are microplastics?

Perhaps you've seen headlines saying we consume a credit card's worth of microplastics a week, or that microplastics have been...


Friends, family and Aunty Maud

Columnist Peter Leith has always been one to take time to talk, lobby and observe. In this true short story,...


Podcast with leading Melbourne podiatrist

They take you thousands of kilometres, but we probably look after our car tyres better than we look after our...


Travel SOS: When will cruising restart in Australia?

With the travel bubble between Australia and New Zealand set to reopen, will we see cruising restart earlier than expected?...


Air New Zealand's blueprint for post-COVID travel

Air New Zealand's trial a digital health pass on flights to Australia could be the blueprint for future digital 'vaccine...