It’s OK, we’ve already got a royal commission into super…
While the government is resisting calls for a royal commission into the Commonwealth Bank’s financial planning scandal, there is a royal commission into at least one part of the wealth management industry. This week, Dyson Heydon’s royal commission into trade unions will be hearing evidence about CBus, the construction industry super fund.
Has CBus dudded tens and possibly hundreds of thousands of clients over many years? Have clients’ retirement savings been lost due to the inappropriate and even illegal behaviour of CBus employees? Has CBus misled a Senate committee of inquiry? Not quite: the allegation, instead, is that someone in CBus may have leaked members’ information to the Construction, Forestry, Mining and Energy Union. The retail super funds’ lobby, the Financial Services Council, seized on the allegations to demand greater “independence” for industry fund boards, though that’s unlikely to fix the ongoing problem that industry super funds — overseen by representatives of employer groups and unions and, in the case of CBus, an independent director (John Dawkins) — consistently outperform retail funds.
Indeed, if the royal commission bothers to check CBus’ performance according to SuperRatings, it will find CBus’ balanced “Growth” fund, on a one-year and three-year rolling basis, produced the second-highest returns of any balanced fund, though its performance drops to 16th on a five-year basis. Its “High Growth” fund was fifth among high-growth performers on a three-year basis. Indeed, its balanced fund actually outperformed some other industry and retail high-growth funds, while its conservative fund outperformed a couple of retail balanced funds.
The pursuit of CBus is part of a week of royal commission hearings in Melbourne to be spent going after the CFMEU. The hearings will be conducted under practice direction 1, a rule put in place Dyson Heydon covering witnesses and evidence. Under practice direction 1, witnesses attend and give evidence under examination by counsel assisting the commission, but no cross-examination by other legal counsel is permitted until a later date. This means witnesses making claims about the CFMEU can’t be cross-examined by the lawyers representing the union or those of individuals named by them until, most likely, several months hence.
This works well if the goal is to demonise unions and officials: allegations can be aired in a friendly environment with the help of counsel assisting, but they can’t be tested in cross-examination until weeks or months after the ensuing headlines.
Unsurprisingly, the government is likely to bring on its bill to re-establish the Australian Building and Construction Commission this fortnight amid what’s likely to be further allegations about the CFMEU. The bill likely to find a more hospitable reception under the new Senate. Libertarian Senator David Leyonhjelm has signalled his support for the restoration of the ABCC, a curious position for a libertarian given the extraordinary powers of the body, including a capacity to override the right to silence and a power for secret, compulsory interrogations of anyone, whether they’re in the building industry or not. Then again, as we’ve already seen, Leyonhjelm’s thirst for freedom comes to a halt when freedom is used in ways he doesn’t approve of.