Former Labor politicians in critical superannuation roles
A trio of former Labor politicians occupy crucial roles in running $1 trillion of Australians’ super savings, which are jointly controlled by unions and employers.
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A trio of former Labor politicians occupy crucial roles in running $1tn of Australians’ super savings, a News Corp analysis shows.
Former ministers Wayne Swan and Greg Combet, together with failed Labor candidate Cath Bowtell, each hold multiple positions on the bodies governing industry super funds, which are jointly controlled by unions and employers.
Former Rudd-Gillard era health minister and attorney-general Nicola Roxon is also on the ISA council and chairs super fund Hesta.
Over the past few years, industry funds have grown to dominate the super landscape at the expense of the scandal-plagued retail fund sector run by banks, where the amount of money under management collapsed last year from $690m to $639m.
Unions and employers are usually equally represented on the boards of industry super funds, although in recent years the number of independent directors has increased due to pressure from watchdog the Australian Prudential Regulation Authority.
However, Mr Combet and Ms Bowtell hold positions a level up, on the advisory council of the peak body for the sector, Industry Super Australia, where members also include ACTU secretary Sally McManus.
Mr Combet, a former ACTU secretary and minister in the Rudd and Gillard governments, is chair of the council.
Mr Swan sits on the council and is also the chair of construction industry fund Cbus.
The only Liberal politician on the council is its deputy chair, Peter Collins, a former NSW state opposition leader who served in Nick Greiner’s ministry.
ISA’s chief executive, Bernie Dean, defended the positions of the former Labor politicians.
“Their qualification rests with their commitment to always put the interests of working people first,” he said.
He said that while retail super funds had to make a profit for shareholders, industry fund directors were solely focused on returns to members.
“They might wear many hats, but every time they walk into a boardroom, they know, and everyone else knows, that it’s members interests that they’re serving – and I can speak from personal experience there,” he said.
Mr Combet, the former deputy chair of the country’s biggest super fund, the $280bn AustralianSuper, also chairs investment manager IFM Investors, which is owned by a group of industry super funds.
News Corp reported this week that IFM Investors received $412m in fees from clients last financial year.
Ms Bowtell ran for Labor in 2010 in a bid to succeed long-serving member for Melbourne and former finance minister Lindsay Tanner, but was thumped by Greens leader Adam Bandt.
In addition to her role at ISA, she is deputy chair to Mr Combet at IFM Investors and is the chair of the boards of two important subsidiaries, Industry Fund Services, which provides member financial advice services to super funds, and the news website the sector owns, The New Daily.
The New Daily racked up a loss of $1.7m last year, down from $2.7m in 2021.
Mr Swan supplements his advisory council position at ISA with a seat on the board of the Australian Institute of Superannuation Trustees, a body which represents industry super funds and other profit-to-member funds.
AIST and ISA are currently in merger talks, but it is understood that at least one of the non-industry funds among the AIST membership has baulked at the proposal an ACTU representative sit on the new board.
At Cbus, Mr Swan’s fellow trustees include some of unionism’s more colourful characters such as Victorian Plumbers Union secretary Earl Setches, a Bill Shorten ally who in December was accused of headbutting the Transport Workers’ Union’s Victorian branch assistant secretary Mem Suleyman at labour law firm Maurice Blackburn’s annual Christmas party.
Mr Setches was not charged over the incident.
Also on the Cbus board is CFMEU official Jason O’Mara, who the union spent $300,000 protecting after shots were fired at his Canberra home in 2019. Mr O’Mara was charged with criminal cartel conduct following a referral from the Trade Union Royal Commission but, in an embarrassment for the competition watchdog, the case collapsed in 2021.
ON BOARDS
Wayne Swan
Ministerial roles include being finance minister under Julia Gillard and treasurer for both Gillard and Kevin Rudd. Left parliament in 2019. Chairs construction industry fund Cbus, is on the advisory council of peak body Industry Super Australia and a director of the Australian Institute of Superannuation Trustees, which represents a broader group of profit-to-member funds.
Greg Combet
Former ACTU secretary who held ministries in Rudd and Gillard governments including science, climate change and industry. Left parliament in 2013. Formerly chair of Australia’s biggest super fund, AustralianSuper. He is now chair of ISA’s advisory council and the investment manager the industry super sector owns, IFM Investors.
Nicola Roxon
Health minister for Gillard and Rudd and Gillard’s attorney-general. Left parliament in 2013. Member of ISA’s advisory council and chair of health industry fund Hesta.
Cath Bowtell
A long-time worker in the industry super sector who ran for the seat of Melbourne for Labor when incumbent Lindsay Tanner, who was finance minister under Rudd and Gillard, retired in 2010. She was beaten by Greens leader Adam Bandt, who has held the seat since. Member of ISA’s advisory council, deputy chair of IFM Investors and chair of two important ISA subsidiaries, Industry Fund Services and The New Daily.
HOW SUPER FUNDS SPENT YOUR MONEY TO BE REVEALED
Australians will get a full picture of the millions of dollars superannuation funds spent on sporting sponsorship, unions and advertising for the first time after Labor lost a bid to water down transparency rules.
Super funds are expected to report granular detail about spending at the end of this financial year under requirements reinstated in February after the Coalition and crossbench Senators joined forces to disallow the Albanese Government’s move to weaken them.
The rules for super funds to publish the itemised details of how they spend members’ money were first introduced by the Morrison government in 2021, but were relaxed by Labor before most funds had reported under the new system.
Arguing the stricter rules were too much of an administrative burden, funds would have instead been required to provide overall aggregate spending figures.
But last month the Greens joined a push led by ACT Senator David Pocock and Tasmanian Senator Jacqui Lambie to disallow Labor’s regulation changes and reinstate the Morrison-era requirements.
A report by Australian Prudential Regulation Authority (APRA) in late 2021 criticised super funds’ spending money with “insufficient evidence to demonstrate that the expenditure would be in the best financial interests of members”.
In one example, APRA found “no evidence” a fund considered the economic benefit of a multimillion-dollar sporting sponsorship fund.
When Labor moved its changes to the transparency requirements in November last year, Assistant Treasurer Stephen Jones said it was to make the information “clearer” and “more meaningful” for members.
He said decades of “scattergun regulation” had resulted in a “dog’s breakfast” of reporting requirements.
“We are cleaning up the mess so meaningful, detailed information is made available to members, easily and consistently,” he said.
Opposition assistant treasury spokesman Stuart Robert argued Labor had no mandate to make the changes to regulation, and accused the government of undermining transparency.
“There should be transparency and integrity in how … funds report on matters,” he said.
- Additional reporting byClare Armstrong
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