The last few years have been a difficult time for enemies of industry super funds in the Liberal Party, the finance industry, the Business Council and the media.
What were supposed to be some long-awaited comeuppances for the employer and union-run sector not merely failed to work, but backfired on their enemies.
A Productivity Commission inquiry commissioned by Scott Morrison intended to replace the default super allocation system that favoured industry funds recommended a new model, but along the way demonstrated that industry super funds were far superior to retail funds controlled by big banks and AMP.
Kelly O’Dwyer famously couldn’t bring herself to acknowledge what the PC had found.
A campaign to demonise industry funds run out of the Business Council by former Financial Services Council exec and Liberal Party apparatchik Andrew Bragg imploded in humiliation for all concerned.
And, most of all, there was the financial services royal commission, in which the Turnbull government included industry superannuation with the hope of, somehow, maybe, exposing some sort of wrongdoing.
We all know how that ended: the destruction of the big banks’ super fund model, the smashing of AMP, the confirmation of literally everything that industry super had ever claimed about what a rort retail super was, and tens of billions of dollars being shifted by angry Australians from retail to industry super.
It was the biggest own-goal in Australian financial history. And ever since, the enemies of industry funds have been itching for revenge. They think the virus crisis has provided the opportunity.
For over a decade, ever since industry super funds outperformed retail funds during the financial crisis, their enemies have been complaining that the willingness of industry funds to invest more in illiquid, and less volatile, asset classes gave them an unfair advantage when stockmarkets tanked — and that their outperformance had nothing to do with better management or the extortionate fees that retail funds paid to the big banks and AMP.
In a crisis, while retail funds copped a hiding from their exposure to equities, industry funds would only suffer mild indigestion as assets like infrastructure projects held up.
But remember that Scott Morrison actually benefited from industry funds’ liking for infrastructure assets — they saved his bacon when he nixed the Chinese acquisition of NSW’s Ausgrid.
This time around, there are few safe assets in an economy that is being deliberately put in the freezer across the board. Moreover, one of the reasons the government was dead keen to allow people to access their super in the crisis is that it knew that would put pressure on industry funds, with a greater proportion of illiquid assets.
That doesn’t mean allowing workers to access some of their super is a bad idea — it affects retail, super and corporate funds alike. But ever since, the enemies have been attacking the industry sector and hinting that it is struggling.
Just today the AFR, which has long despised industry super, attacked the “moral hazard weakness” (whatever that is) of the sector and argued it only outperforms the rorted funds of the banks because of the industrial relations system. The AFR also gleefully ran an attack on the sector by AMP — the company that charged dead people premiums and charged fees for no service.
Two weeks ago the AFR gave a platform to Bragg — these days a Liberal senator — to renew his attack on industry funds. Since entering parliament, Bragg’s main contribution to public life appears to have been getting infected with coronavirus and potentially exposing other senators. But he told the AFR he was using his time in isolation to develop a “big plan” for super, which has “been totally captured by vested interests.”
Bragg, possibly taking the “destroy the village in order to save it” approach, has previously argued super should be made voluntary, so perhaps his plan would be more accurately described as a little one.
Yesterday, The Sydney Morning Herald got Bragg to attack “suggestions” that the Future Fund “props up super funds”. Perhaps the article had been badly subbed, but the “suggestions” appear to have been invented either by the journalist who wrote it or Bragg himself, rather than come from anywhere in the sector.
Then there was Tim Wilson, a veteran foot-soldier in the war against industry funds, whose MO is to use his role in the House of Representatives economics committee to demand information from them.
That information then mysteriously makes its way to journalists — how, we don’t know, but they all claim that the information has been acquired through legitimate journalism, so who are we to question that.
This week Wilson was again using his position to issue “please explains” to industry funds about liquidity issues — via committee correspondence that, coincidentally, made its way the AFR, doubtless due to the great diligence of the journalists involved.
It is comforting to know that Liberals aren’t letting a little thing like a global pandemic get in the way of their war on industry super — and that the Financial Review remains as focused as ever on demonising a sector that, like pretty much the entire economy at the moment, doesn’t fit with its neoliberal obsession with what the world should look like.