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Wednesday, 25 November 2015
Page: 8906

Senator CONROY (VictoriaDeputy Leader of the Opposition in the Senate) (11:04): One of the tragedies of being in this place for nearly 20 years is the fact that my involvement in the superannuation sector takes me back to 1992, when I was a superannuation officer for the transport workers superannuation fund. I have been at the coalface and I have actually competed with so-called 'independent' funds, so I have dealt with ASFA both as an employee and for six or seven years when I was shadow financial services minister. I know ASFA well and I know the superannuation group sitting in the lobby well. The problem with ASFA is it no longer represents anything other than bank funds. There is been such a consolidation of superannuation funds around this country that ASFA is essentially nothing more than a mouthpiece for banks and their superannuation funds.

Let me take you back to 1998. The then head of the National Farmers' Federation wrote a full page in what was then a magazine called The Bulletin, an influential magazine, and it talked about the rising power of industry funds. They always call them 'union funds' to be pejorative. It said, 'We will be looking forward to checking the returns of the Electoral Commission to see how much money these union superannuation funds are going to give to the federal ALP in their election campaign, because they are just the puppets.' This was an article written by a bloke called Andrew Robb, then the head of the National Farmers' Federation. If you want to talk about ideology, those opposite—who now propose to caringly reform the most successful innovation of the Hawke-Keating government period, spreading superannuation to every Australian—voted against, every single time, every single increase that has been mandated for ordinary workers. Those opposite have voted against every single one, and every single time the banks have cried poor because the industry funds outperform them and have lower costs.

I was a superannuation officer. My job was to walk around at 5 o'clock in the morning at truck yards, stand on the dock and explain to them why they should be in a super fund. Do you know how much the average three per cent was back in 1992? It was about $10 a week. I had to convince people not only that this was a worthwhile thing for them to be in but also that they should put more into their superannuation because it was good for them. So I stood there at the coalface. Do you know what the bank funds used to do? Do you know what the other funds used to be doing? They were offering deals to employers to try to get the employer to sign up to one of their funds and they could give them a better deal for the employer. A lot of responsible employers around this country rejected these sorts of approaches and have participated magnificently while they have been on the 50 per cent representation, while they have been on these boards. And they have done a great job.

Let me be clear. They are not actually a stakeholder; this is the members' money. They are not elected by the members; they are the bosses of the members who have worked and recognised the importance of giving financial security to their members, to their employees, over many, many years. This is a structure that has stood the test of time, but it is a structure that terrifies the life out of the big banks because the big banks have, for years, paid commissions. Senator Muir, you have sat through some horrific stories about the behaviour of some of the banks and some of the financial advisers. I did not get paid a cent as a trailing commission. I got paid an annual salary. I got not one cent if I was successful in convincing someone to join the fund. Not one cent. I stood there and had to talk to people and convince them that it was about their future, about their kids' security in the future, and I did not get a cent for it. I am proud of that. But ASFA represents the trailing commission group, the bank group. Banks are being dragged slowly—because of all the exposure that you yourself have done, Senator Muir, and others have done in this chamber, in exposing the rorts and the trailing commissions. But it is still deeply embedded in their culture.

I have gone to meetings, as shadow minister, of the Financial Planning Association, and I have stood there and said, 'It is time to professionalise your sector. It is time to start moving away from commissions.' I have been shouted at, screamed at and howled down. The first question I was asked, when I finished my speech and a person strolled up to me, was, 'Now you've demonstrated you know nothing about the financial services industry, I want to ask you the following.' That was the first question I got back in the late nineties and early 2000s when I looked after this portfolio area. We had a superannuation committee that was the longest-running statutory committee of this parliament. Nick Sherry was in charge of it and we were on it for many years together.

Then you want to count Jeremy Cooper. Let me give you a very succinct view of Jeremy Cooper: he is the village idiot. I do not think I have met a dumber human being that has ever been appointed to the ASIC board. He is arrogant and uninformed. I take zero notice of his recommendations, and the previous government took almost no notice of his recommendations, for good reason. His logic was flawed, his arguments were weak. For those who would point to Jeremy Cooper as an icon in this area: he has no experience whatsoever in superannuation. He was an accountant.

Senator Cormann: You appointed him.

Senator CONROY: I am saying that we took no notice of plenty of what he said.

Senator Cormann: But you appointed him—

Senator CONROY: No, I didn't appoint him.

Senator Cormann: Your government did.

Senator CONROY: He was appointed to do a review and he came up with recommendations that were worthless—something I predicted.

Senator Cormann: You were part of the government that did it.

Senator CONROY: This was under the Rudd government, mate. This was done under the Rudd government. Cabinet had little to do with it. Let me be clear: the individual involved has no experience in the superannuation sector. None. Absolutely none. This is the banks trying to do two things. They want to weaken the board structures to put on more of their mates, under the guise of independence. Let me tell you why it so irks me, Senator Muir. Let me really tell you, because you, under this system, could almost certainly never qualify to be a director of a superannuation fund, no matter how well you had performed as a director. I object that truck drivers are being told that they are not good enough to be on the board of the super fund that has so successfully managed their superannuation fund. I have got friends who are directors and who are former truck drivers, and you want to throw them off because the big end of town do not like the fact that truck drivers want to represent their members' interests. This is an amendment that will throw truck drivers, timber workers and metal workers off boards. People who have been elected by their unions as representatives are going to be tossed off their boards. I am all for professionalising the industry. I am all for the training. I have supported, and we have advocated for, training for those representatives of the fund that I am still a member of and have funds in, and I trust the board of my fund. But I really object to the big end of town and their mouthpieces over on the other side, and people like Jeremy Cooper—who is nothing but a mouthpiece for the other side of the chamber—saying that a truck driver is not good enough to be on the board of a superannuation fund. Those truck drivers have done a bloody good job in representing the members' interests. They have delivered a cheaper fund, better investment decisions, no trailing commissions, and they have absolutely represented their members. They have absolutely represented their members' interests, including mine. I have still got money in my fund, and I am proud to say I have got money in my fund, because they do a bloody good job. I cannot believe that someone with your pedigree, your background and your genuine care in this area would fall for an argument that says that a truck driver or a timber worker is not good enough to serve on these boards—because that is what your amendment does. They will not tell you that, but that is what it does. You are going to say, 'You and you, you're not on the fund anymore.' That is truck drivers, timber workers, metalworkers. Do you know who is going to replace them? It will be a bunch of suits who do not have the culture, who do not have the understanding, who do not have the care for the members of these funds. They are not there to represent the absolute interests. They come from the end of town that supports trailing commissions. You will be putting people who have always traditionally supported trailing commissions onto an industry fund.

I accept the banks, thankfully, because of the great work that you and others in this chamber have done in exposing the shonks and the actual, real impact. Hundreds of thousands of dollars are lost to members because of trailing commissions and all the other deals and the lifestyle of the bank funds. Hundreds of thousands of dollars that should be in timber workers' pockets and in truck drivers' pockets is lost because of the structures that you now want to introduce to begin this process.

This chamber has rejected this over 20 years because the argument has not been made that there is something going wrong. If the definition of something going wrong is that I have got a better performance than bank funds, that I have a cheaper cost base than bank funds, let it all go wrong, because what I am proudest of is my time when I worked as a superannuation officer for the truck drivers fund. I am proudest of defending that structure for the last 20 years in this chamber.

This is not the first time I have stood on this issue. I apologise, as I say: I am sounding like a really old senator. But those who are owned by and are mouthpieces for the banks in this country, who sit on that side of the chamber, are not genuinely interested in the interests of timber workers and transport workers. They are not. They actually want to deliver to their mates at the big end of town. Do not forget what this bill actually started as: it was to take the default fund out so members of a site could actually negotiate with their employer and say, 'We’re in the TWU superannuation fund,' or 'We're in the Cbus fund,' or 'We're in this fund.' They want to take away the right for them to do that. As far as I know, you have all sensibly, hopefully, continued to say, 'There is not a chance in the world. We are not opening it up for the big end of town to start offering inducements,' and, believe me, they are very clever at how they do it.

So I am hoping that one is off the table. But this one is about saying truck drivers and timber workers are not good enough to be on this fund. They have not done the job, and we are going to get rid of them so that a few suits from the big end of town can start to wheedle their way in here. They do not understand the culture. They are not interested in the culture. They will be the mates of the big end of town.

It is really important that the structure of the super funds continue to maximise the benefits for the members. If there are people sitting outside this chamber who are telling you, Senator Muir, that it is okay to vote for this, they are not representing the unions—

Senator Bushby: Through the chair.

Senator CONROY: Absolutely! Thank you for your admonishment, Senator Bushby, I accept it. If there are people sitting outside these walls right now, Senator Muir, who told you, 'No, it's okay. This is okay,' they are not representing the workers in this super fund. They are not representing the Transport Workers' Union members when they whisper in your ear it is okay to vote for this. They are not representing them, because I can tell you that transport workers are bloody happy with the returns and the performance of their fund and the cost base of their fund. They were very happy that I was not getting a trailing commission when I convinced them to put more money in—which, back then, was pretty hard, I can tell you. Five o'clock in the morning in a garbage truck depot is not a great time to convince people to put another 10 bucks into the super fund, let me promise you that.

I was not immensely successful, but my financial remuneration did not depend on it. So I did not have to fib to them. I did not have to con them. But if you start voting truck drivers off boards, then I say that I cannot believe you would do that, Senator Muir. With your background, your genuine concern in this area, your understanding of ordinary working people in this country, I cannot believe you would fall for the spivs from the big end of town—just like they told you they would be kidnapped, and we have seen through that. I congratulate you and I acknowledge that. You saw through that, and this is another one. This is nothing more than putting some suits on and taking some representatives of working people off these funds—truck drivers, metalworkers, timber workers. These are people you know, people you spend every day of your life with and people I know you care about.

You are saying they are not good enough to be on these boards. I absolutely find that offensive. I am used to them. I get them. I cannot believe you would fall for it. I genuinely cannot believe, Senator Muir, you will move an amendment to vote transport workers, truck drivers, airport workers and timber workers off these boards simply to appease the big end of town. I repeat what I said at the beginning of this contribution: ASFA do not represent the truck drivers in the fund that I am a member of. They absolutely do not. They once represented an incredible mix of funds, but if you look at who ASFA's members are now it is the big end of town calling the shots. I have dealt with them for 20 years—I love them—from when Sue Ryan, a former Labor minister, was in charge of ASFA right through 20 years of this history.

So I ask you to think carefully. I know you do genuinely listen to the debate in the chamber. I know you do genuinely listen to the concerns that are raised with you. But, genuinely and seriously, you are going to vote working people off the boards if you put this amendment up that you are talking about doing. I hope we get a chance to continue the conversation. You have said you want to. I appreciate that. But, please, I ask you: understand what it is really about. The Liberal Party and the business community and the banks, particularly, hate industry funds because they challenge the business models of those institutions. They are challenging them successfully. They are challenging them with better products, with cheaper prices and better returns for their members. So they will do anything; they will make up any argument. I am surprised not to hear that there are going to be kidnappings of superannuation fund officials if this does not happen! That will be the next thing they will try, Senator Muir, but I know you will not fall for that one.

I hope this bill gets defeated on the second reading, because it should be sent off to where it belongs—back into the bottom drawer of the big end of town and the banks, who want nothing more than to begin the destruction of industry funds. Do not fall for ASFA's line. I know ASFA intimately. They are now controlled by the big end of town and the big banks, who are the big funds in ASFA. They provide all the funds, they drive all the policy and you should not draw solely on them as your inspiration. I am not saying you are, but I am saying you should not draw on them. You equally should not necessarily draw on some of the people who are pretending they are out there representing the funds. You should be talking with actual elected representatives of the people whose money is in the funds. When you elect your union leadership, you then knowingly elect the directors of your fund. They are elected by their members to be on these funds. That is how the system works. I have sitting with me a former member of his superannuation fund, Senator Bullock. He was elected as a union official and, through that, onto the fund board. The members elect them, and you want to take away that right.

Senator Cormann: That's not true.

Senator CONROY: You do. You are saying there has to be a reduction in the number of representatives on the board. I know you want to increase it so you can have 10 mates on the board who all then get paid more fees. They will love it. It is a big trick. The next argument will be that they have got to rationalise the number of people on the board. I have been through this for 25 years or longer, as an employee of a union. I have watched how these funds operate. They are not absolutely perfect and at times they have needed more training. If you were to say, 'We've got to make sure that they've done all the professional training standards, make sure they do the courses,' I would support that. The truck drivers who are on the board of the TWUSUPER fund would absolutely support that. They have always got a thirst for more information and more knowledge, but it is not like they have been making the wrong decisions. If it is about making sure that they have the best representation possible, go for it, and this chamber, I am sure, will support you on it. But, if it is simply about making sure that some truck drivers and some timber workers are kicked off, then I am going to stand up and say no, and I am going to say it with a heartfelt appreciation for the people who are on those boards who are doing a great job for their members today. I hope that we get a chance—well, I hope we do not, because I hope the second reading goes down— (Time expired)