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Wednesday, 31 October 2012
Page: 12882

Mr FRYDENBERG (Kooyong) (18:55): I rise to speak on the Fair Work Amendment Bill 2012 and, in so doing, I follow some excellent speeches by my colleagues. I would like to pay tribute to the member for Wannon, the member for Mayo, the member for Farrer and of course the member for Bradfield, who has done, as the member for Wannon said, some very important work both publicly and in this House in shining a light on this union dominated racket that we call our superannuation funds.

I was recently asked what I most dislike about the Labor Party. At the top of my mind was economic mismanagement. Then I thought about the class warfare that they embark on. Then I thought that what really irks me most about the Labor Party is that they are beholden to the union movement. Only 12 per cent of the private sector workforce and about 18 per cent of the total Australian workforce are members of a union. But do you know what? One hundred per cent of the frontbench of those opposite are members of a union and 70 per cent of the caucus are members of a union. The minister for industrial relations—the fox in charge of the henhouse—was a former secretary of one of our major unions. You do not call that democracy; you call it a union dominated Labor agenda. We have seen it played out so many times—for example, the decision to lift compulsory superannuation from nine to 12 per cent, which will see $8 billion a year plough its way back to industry super funds. Out of the 10 appointments that were made to Fair Work Australia between December 2009 and December 2011, eight had union backgrounds. You do not call that democracy; again, you call it a union dominated agenda.

In today's bill before this House the Labor Party are seeking to deny the Productivity Commission's recommendation that they should open up default super beyond industry superannuation funds to retail funds and other funds—again, another example of a union dominated Labor agenda.

The superannuation industry in Australia is huge—$1.4 trillion is under management. In 2011-12, $90 billion of new money flowed into superannuation. The industry super funds are the giants among the superannuation industry. In 2011 they had $250 billion under management. In 2009-10 industry super funds received 31 per cent of the $78 billion that was contributed to super funds, not including self-managed funds, during this period. And AustralianSuper, which, as we know, the minister has had a personal relationship with, is also a major fund.

The Institute of Public Affairs, a very reputable organisation, has undertaken a study. It found that, across 166 modern awards approved by Fair Work Australia, 513 of the 566 super funds were industry or public sector funds. They were the default funds for millions and billions of dollars. These industry super funds, typically, choose up to half of their directors from unions. The unions get to nominate up to half of their directors.

I ask you the question: why should more than 10 million people in these industry funds have to pay directors' fees to half of those directors who come from union backgrounds, when the unions have only just over one million members across the country?

This is a closed shop; it is anticompetitive. It lacks transparency and it lines the pockets of union members. In the 30 seconds I have left, I promise you that on this side of the House we have an alternative. (Time expired)

Debate interrupted.