In contrast to the 2016 campaign, superannuation has played minimal role in the election campaign, beyond Bill Shorten’s stumble early on when he (technically correctly) said Labor had no plans to increase taxes on superannuation.
If you don’t recall, in the 2016 budget the Liberals, in one of their last fits of trying to govern in the national interest, introduced some sensible reforms to slightly reduce absurdly high superannuation tax concessions exploited by the wealthy. The wealthy retiree section of the Liberal base promptly went feral and it became a running sore for the party in the 2016 election campaign, complete with shockjock gotcha attacks on Liberal ministers trying to defend good policy (after the election, it got worse, with a disgusting campaign against Kelly O’Dwyer by angry old white men in her electorate).
But having got exactly no electoral credit for a good reform that upset their own base (the best, and rarest, kind of economic reform), the Liberals promptly swore off touching super tax dodges ever again. This election, it’s Labor proposing to close down tax loopholes as part of a broader campaign to make the tax system a little less generous to wealthy, politically influential older people.
It’s been radio silence on another issue, as well. Ever since the banking royal commission, the government has been silent on its long-running campaign to undermine employer and union-run industry superannuation funds. With routine exposure of how many retail super funds run by the big banks and other major financial companies were rorting and failing to protect their members, the Liberal loathing of industry super had to be put on the backburner, especially with thousands of members bailing out of retail funds and switching over.
Now, however, Liberal elder Alexander Downer has revealed that the Liberal Party determination to get industry super remains, and that they see it as unfinished business.
“Industry super funds need stronger and more independent systems of governance and we should have done that when we could have,” Downer told the Financial Review yesterday. He’s referring to the government’s attempt to impose retail super fund-style governance on industry super funds. That was abandoned in the middle of the royal commission after Senate crossbenchers wondered why the Liberals wanted industry super to be run like the retail super funds being exposed every day by Kenneth Hayne.
The crossbench will change after the election, however, with Clive Palmer likely to enter the Senate with Liberal preferences. After initially railing against the Abbott government’s efforts to repeal the Future of Financial Advice laws in 2014, Palmer ended up backing their gutting in the Senate, so the Coalition will have a willing negotiating partner if it wants to renew hostilities against the sector.
Another new arrival in the Senate will be Liberal Party operative Andrew Bragg, who worked for the retail sector lobby group the Financial Services Council. Bragg led a Liberal Party-Business Council of Australia campaign against industry superannuation, demonising it as a vehicle for funnelling cash to unions and Labor (as opposed to a vehicle for funnelling cash to the big banks?). Bragg has second spot on the Coalition ticket in NSW (behind the excellent Hollie Hughes, who will finally enter the Senate in July).
If re-elected, the Coalition has a couple of options to pursue. It can continue Senator Bragg’s campaign to discredit industry super as a front group for Labor, which will probably mean reviving the push for retail fund-style governance, expecting that Palmer will wave new laws through. It can try to use the superannuation choice issue to cut down the flow of default funds to industry super, possibly by nationalising super, as Peter Costello and Kelly O’Dwyer want — although Mathias Cormann opposes this. Or it can go down the route The Australian and the Financial Review and attack the “activism” of industry super funds, constructing a straw person of union thugs using giant investment portfolios to boss around company boards.
Scott Morrison seems to already be going that way, claiming last week “Sally McManus will now be a board member, figuratively, on every single one of your companies. The union movement will be in control of your businesses if the Labor party are elected.”
The official line will be that Australians must be protected from unions who will let activism get in the way of good returns for members. Meantime, post-royal commission legislation to make sure big banks don’t let gouging and rorting get in the way of good returns for members remains in limbo because the government didn’t want Parliament to sit much before the election.