Opposition leader Bill Shorten has floated the idea of forcing retail superannuation funds to have “genuinely” independent trustees.
“One idea that has emerged from some quarters is: should banks actually be in superannuation?” Mr Shorten is widely reported as saying, including in The Australian.
“I don’t know about that. One idea, and it’s only an idea … you could require for-profit funds to outsource the trusteeship to genuinely independent organisations.”
The Government has a Bill before Parliament which would require super funds to have at least one-third independent directors, which was seen as targeting industry super funds. But the Bill doesn’t have the votes and has reportedly been dropped.
The comment by Mr Shorten appears to be far from a policy proposal, with it already being walked back. A transcript including the comments has not been released on Bill Shorten’s website. Though a transcript of a subsequent press conference does go to the issue.
A journalist, unnamed in the transcript, asked: “Mr Shorten, you called for independent trustees to be considered – appointed to retail funds. What about industry super funds?”
Shorten replied: “First of all the context to which I raised it, and you were there last night, is I was asked about the Productivity Commission’s report about reforms to banking superannuation.”
“The challenge for Australia’s banks is that they are governed by the Corporation’s Law, which basically puts shareholders as the number one importance for corporations, for banks. But our superannuation system and trustees should have as their number one priority, the beneficiaries, the members of the superannuation fund. So the tension within banks, the conflict of interest which they face – and it’s a real issue, is the banks are about profits for the shareholders, whereas superannuation funds need to be about the best returns for members of the superannuation fund itself.”
“So what I raised last night – and we have got to talk about it, we have to see what the Royal Commission decides, we have to go through our policy processes – is perhaps if banks want to stay in superannuation, and some people say they shouldn’t either. But if they want to stay there, they need to consider transferring some of the trustee roles, that’s the people who run the superannuation funds, to independent organisations. Because when you run a superannuation fund, you can’t serve two masters. You should serve the members of the fund’s interest – their best interests first.”