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No evidence to support government's attack on representative super boards



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JIM CHALMERS MP

SHADOW MINISTER FOR FINANCIAL SERVICES AND SUPERANNUATION SHADOW MINISTER FOR SPORT SHADOW ASSISTANT MINISTER FOR TRADE,

INVESTMENT AND PRODUCTIVITY MEMBER FOR RANKIN

SENATOR SAM DASTYARI

CHAIR, SENATE ECONOMICS REFERENCES COMMITTEE SHADOW PARLIAMENTARY SECRETARY FOR SCHOOL EDUCATION AND YOUTH PARLIAMENTARY SECRETARY TO THE LEADER OF THE

OPPOSITION

SENATOR FOR NEW SOUTH WALES

NO EVIDENCE TO SUPPORT GOVERNMENT’S ATTACK ON REPRESENTATIVE SUPER BOARDS

A number of witnesses at today‟s Senate economics committee inquiry into the composition of superannuation boards echoed Labor‟s concerns with the lack of evidence to support the proposed changes.

They also criticised the absence of a clear definition of „independence‟ in the draft legislation, the small pool of possible directors to draw from, and the implementation timeframe.

Organisations and experts criticised the Government‟s proposed „one-sized-fits-all‟ approach, ambiguous drafting and definitions, the lack of consultation with affected funds and their members, and the possible unintended consequences that have not been explored.

Professor Thomas Clarke, from the UTS Centre for Corporate Governance stated “it would be remiss if Australia abandoned its representative system of governance”.

The Governance Institute noted that they had concerns about the relatively small pool of directors that funds would have to draw from.

Representatives of CHOICE, the Governance Institute of Australia, the Business Council of Co-operatives and Mutuals, and the Association of Superannuation Funds of Australia all indicated they were concerned about the lack of a clear definition of „independence‟ in the legislation.

It makes no sense for the Government to attack the board structures of the best-performing superannuation funds.

The changes are part of an ideological crusade against the representative model which has delivered the best outcomes for fund members.

Evidence at the committee today has reinforced our view that:

1. There is no evidence that independent directors produce better results for fund members. 2. The current balanced representation model is working well, and delivering higher returns for members. 3. APRA was given additional powers to monitor boards in June 2013. 4. The proposed changes are too prescriptive and will restrict both employers and employees from electing their own board representatives. 5. The proposed changes are estimated to cost up to $168 million, a cost that will be passed on to fund members.

The Government is imposing an ideological solution to a problem that does not exist.

The Senate Economics Legislation Committee, chaired by government Senator Sean Edwards, agreed to hold two public hearings, in Sydney today, and in Melbourne on Wednesday 28 October, and to report on 9 November.

FRIDAY, 23 OCTOBER 2015