The new Minister for Superannuation, Victorian Senator Jane Hume, worked for an industry superannuation fund before entering politics. Does this mean that, finally, the decades-long Liberal war against industry super is over?
Hume’s arrival in the Senate in 2016 was cause for some consternation among people in the Victorian Liberals, given she was a woman and had worked for AustralianSuper. As we know from Kelly O’Dwyer’s experience, some Victorian Liberal men prefer their women out of politics and certainly not threatening their cosy super arrangements.
But Hume had only briefly worked for AustralianSuper, from 2015-16, and had longer stints before that in retail and business banking, working for NAB and Deutsche Bank. She thus continues the proud Liberal tradition of appointing former big four bankers to manage superannuation — in just the last six years, Arthur Sinodinos, Josh Frydenberg and O’Dwyer have all ended up managing the banks they used to work for.
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Hume has previously been chair of the Senate Standing Committee on Economics, in which role she’s led legislation inquiries, dissented from references inquiries and generally offered her wisdom on various financial services issues, including super — on which, naturally, she has strong views. Very strong. Biblical, in fact. Industry superannuation funds, trade unions and Labor form an “unholy trinity”, Hume wrote earlier this year, in a piece calling for the imposition of retail fund-style governance on the industry sector.
Hume is fond of the “unholy” line. She also appears to believe the primary problem in superannuation isn’t the massive underperformance of retail super funds — like the ones run by her former employers at NAB — or the gouging and rip-offs perpetrated by the big banks, AMP and IOOF on retail fund members, but industry super’s conflicts of interest.
“Inevitably, there is vested interest in the superannuation industry,” she told the senate in February. “Particularly from the Labor Party. The Labor Party is in an unholy alliance with the union movement and the industry superannuation movement. So it’s not ever going to be something easy to reform.”
Indeed for Hume, the very birth of compulsory super in Australia was evil. “There was an unholy accord, for want of a better expression, between Bill Kelty and Paul Keating back in about 1991 when they decided to introduce compulsory superannuation, rather than a pay rise, for the unionised workforces.”
Actually, compulsory super was introduced in the 1985 accord but let’s not sweat the small stuff. Compulsory superannuation was, Hume said, “very hard for employers”. Indeed, “that compulsory superannuation system actually put a lot of people out of work,” she insisted, though she has yet to go so far as to call for its abolition.
In 2017, in a speech in which Hume claimed compulsory superannuation had been introduced “during the death throes of a Labor government”, she argued that the existing industry super governance model, which has delivered returns for members far greater than retail super, was “entirely irrelevant, it is a legacy of the past”. It suffered from “uncritical group-think mentality” and needed to be replaced with the retail super fund governance model of independent directors — the model that would shortly be exposed by the Hayne royal commission as profoundly inadequate in protecting members’ interests.
Hume has also repeatedly and enthusiastically invoked David Murray’s views on superannuation in justifying her position, which augurs poorly given Murray — architect of the Commonwealth Bank’s push into retail super and funds management at the end of the 1990s — now chairs an AMP deeply scarred by the revelations of the royal commission.
As Crikey warned ahead of the election, the Coalition now wants to return to its plan to impose retail super governance on the industry sector. Treasurer Josh Frydenberg flagged after the election that the government wanted (yet another) review of superannuation and retirement incomes.
“There are a number of superannuation reforms that remain outstanding from the last term of government,” Frydenberg told The Australian Financial Review, including “a strong case for reform to strengthen accountability and governance”.
The ministers sent into battle may change, but the Liberal determination to attack industry super remains steadfast.