Has Liberal Senator Andrew Bragg’s Christmas wish come true?
The country’s most powerful financial regulator, the Australian Prudential Regulation Authority (APRA), says it will investigate online publication The New Daily and its commercial relationship to industry super funds.
Bragg, a former senior executive at the Financial Services Council (FSC), the front group for retail super funds owned — back then — by the big banks and AMP, is leading the government’s deeply hypocritical war on industry super.
His latest target is The New Daily, which he has called “propaganda” for the industry super funds.
According to a letter sent to Bragg from APRA deputy chair Helen Rowell, reported by The Sydney Morning Herald and The Age, an investigation will have preliminary outcomes by March 2021.
But it’s unclear exactly what APRA is investigating and what powers it has to disrupt The New Daily’s business model.
The move also raises concerns about the politicisation of the regulator, whose main job is to ensure financial stability in the banking, insurance and superannuation sectors.
“There is an ideological battle going on here which you’d hope APRA was not involved in,” Kevin Davis, a University of Melbourne finance professor, told Crikey.
APRA’s letter to Bragg, as reported in the Nine papers, is not exactly a rallying war cry.
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According to Rowell, a review would “consider the frame-work and decision-making process of boards pertaining to certain areas of expenditure, including a review of the metrics and approach to assessment of benefits to members”.
And it cautions this would be “made more complicated where… expenditure is occurring indirectly through entities that are not regulated by APRA.”
Nevertheless, the timing of a review raises questions about whether APRA is bowing to political pressure.
Liberal Senator Andrew Bragg has been a vocal critic of industry super and last week passed a Senate motion to demand the ABC provide more details of its content-sharing agreement with The New Daily.
In a column in The Australian last week, Bragg criticised publication and the ABC affiliation. He also took aim at the regulator for having never brought action against a trustee for failing to comply with the sole purpose test.
“This is after 30 years of compulsory super and oodles of waste,” he said.
So is APRA just jumping to Bragg’s criticisms? And why is a key regulator taking an interest in a small investment of a group of industry funds when there are much greater and potentially destabilising issues in the wider economy and financial system?
Crikey asked the regulator about the timing of its investigation but a spokesperson was unavailable for comment.
As the Hayne Royal Commission revealed, APRA’s regulation of banks and super funds in the rorting years up till 2017-18 was not very good. The NAB, Westpac, AMP, Commonwealth Bank got away with all sorts of dodgy deals – including charging dead people fees – and APRA did nothing. In fact a post-royal commission review of APRA was scathing, pointing out that APRA fell short.
Of course there’s another reason why the government might want to attack The New Daily. The news outlet has a progressive news agenda and is home to commentators who often take aim at government policy. Indeed one of the best-known financial journalists in the country Alan Kohler has just moved there from The Australian.
NOTE: Eric Beecher, chairman of Private Media, which owns Crikey, is chair of Motion Publishing, which publishes The New Daily.