The Australian, November 29, 2017
Industry super funds are being used as a vehicle to transfer millions of dollars to the union movement, with almost $20 million in third-party directors’ fees paid out over four years.
An Institute of Public Affairs report released today shows unions received $18.4m in fees, dwarfing the $2m paid to industry groups and $5.6m paid out to third parties over the same period. The IPA report, Rivers of Gold, shows 70 per cent of third-party payments of directors’ fees went to trade unions between 2013 and 2017.
The Construction Forestry Mining and Energy Union received almost $3m, ahead of United Voice ($2.3m), Australian Council of Trade Unions ($2.05m) and the Maritime Union of Australia ($1m). IPA director of policy Simon Breheny, who co-authored the research, said industry super funds were “being used as a vehicle to transfer millions of dollars from hardworking members to the trade union movement”.
“At a time when less than one in 10 workers in the productive sectors of the economy is a member of a trade union, it is clear the industry fund model has been very significantly undermined,” Mr Breheny said.
“Significant efforts should be made to stop members’ funds being funnelled from industry funds to the union movement.”
The Turnbull government put legislation into the Senate in September, which would grant broad new powers to force the $2.3 trillion superannuation industry to make detailed disclosures of the millions of dollars in hidden annual payments made to unions and employer groups. The new laws would issue orders against funds that failed to act in the best interests of its members.
Minister for Revenue and Financial Services Kelly O’Dwyer said the payments, highlighted in the IPA report, raised questions about union representation on the boards of superannuation funds.
“It is just another example of millions of dollars being spent for purposes other than for the benefit of members across the superannuation sector including poor behaviour by bank-owned super funds,” Ms O’Dwyer said.
“The government is not interested in picking sides in an ideological battle within the superannuation industry.
“Our reforms will lift the standards of transparency, accountability and independent oversight of every single super fund in the country.”
The IPA report showed many large single payments to unions and industry groups were significant. “The top 30 single payments to third parties expose a significant bias towards trade unions, with 19 of the top 30 payments going to a variety of unions,” the report says.