Union grip on super funds must be broken

YOUNG Australians are being pulled into the political fray thanks to the dodgy dealings of their superannuation companies, who have run riot for far too long, writes Miranda Devine.

LIKE most uni students, my son works a variety of part-time jobs to support himself.

His main sources of income have been labouring on building sites, coaching rugby and working in bars, for around $25 an hour.

His employers also have had to pay 9.5 per cent of his wages as compulsory superannuation into the default funds associated with each industry, CBUS, HostPlus and NGS Super.

Because he doesn’t earn much, his balance has been eaten away by fees, charges and premiums for life insurance he does not want and did not ask for.

He keeps receiving urgent letters from CBUS telling him his insurance cover will be cancelled because his balance is too low, and inviting him to make additional contributions.

“If we haven’t received a Superannuation Guarantee Contribution in six months and your balance drops below $1200 any Death and TPF cover will stop” warns CBUS ominously.

Now, for a teenager, all this annoying bureaucracy effectively works as a tax on his meagre earnings. Compulsory superannuation makes him more expensive to hire but provides him with zero benefit.

He has not seen a cent of the extra 9.5 per cent in wages his employers have paid. Whatever super hits his account is eroded by administration fees, charges and premiums, which are an average nine per cent impost on accounts with balances of $1000, according to Treasury analysis. And if he wanted to switch funds, he’d be slugged with an exit fee of around $70 — almost three hours of work.

Just as the banks have been rumbled for rip-offs and poor governance so, too, will industry superfunds be exposed. (Pic: Joe Castro)

This theft from Australia’s lowest paid workers has just enriched the industry super funds and the companies which provide the useless insurance.

Long overdue reforms in the latest budget include making insurance “opt-in” for workers aged under 25 and capping fees at 3 per cent for low-balance accounts.

Of course, the industry super funds are railing against the changes, which stand to take $3 billion out of their pockets and back into worker’s pay checks.

This is just one example of the opaque financial shenanigans of Australia’s $2.3 trillion superannuation industry which will soon come under scrutiny in the financial services royal commission.

Just as the banks have been rumbled for rip-offs and poor governance so, too, will industry superfunds be exposed.

Most disturbing is the tens of millions of dollars that are being sucked out of the retirement savings of workers and funnelled by industry super funds into trade unions — $60 million in the past decade and expected to rise to $22 million annually within the next.

This money is used to fund political campaigns and self-serving lobbying operations. It is effectively a left-wing war chest for political activism.

What we are seeing is the emergence of Australia’s first “SuperPac” — the equivalent of an American political campaign slush fund, former Liberal Party acting director Andrew Bragg, will say in a speech to today’s libertarian Friedman conference in Sydney.

“Secret industry fund payments to unions are as shady as banks and insurers charging dead people for financial advice,” he says.

“With union membership at less than 15 per cent of the workforce, most Australians have actively chosen not to support unions, yet almost all of us are supporting kickbacks to union campaigns through payments from industry super.”

Many super fund members have no idea that their money is going to unions. (Pic: David Crosling)

Because members have no idea where their money is going, Bragg has created a new searchable database, showing exactly how much each industry fund donates to each union.

Access to the database will be available exclusively to Sunday Telegraph readers for the next 24 hours at andrewbragg.com/supercheck.

Just enter the name of your industry super fund to find the value of its union donation.

For instance, CBUS, the default superannuation fund for construction workers, has donated $13 million to the militant Construction, Forestry, Mining and Energy Union (CFMEU) in the past decade.

So, CBUS members have unwittingly helped pay the $15 million in fines imposed by the courts on the CFMEU for proven breaches of industrial law.

They’ve helped pay the millions of dollars in legal fees clocked up by CFMEU boss John Setka to beat blackmail charges this month.

They’ve helped pay the $11 million in donations the CFMEU has given to the Labor Party since 2000, and the $1.1 million the union donated to left wing activist group GetUp in 2010.

Bragg’s database, compiled laboriously from mandatory disclosures to the Australian Electoral Commission, shows hospitality industry fund Host Plus has donated $7.5 million to unions, mostly to the powerful left-wing United Voice. TWU Super has paid more than $8 million, mainly to the TWU. Australian Super has paid almost $5 million to unions, including United Voice.

Bragg says that the unions and industry superannuation lobby combine with GetUp and environmental “charity” groups to form a powerful, well-funded activist cabal

to advance the interests of the broad political left, from campaigns against tax cuts or against conservative Liberal MPs in marginal seats.

Law-abiding, non-unionised workers who are automatically signed up to an industry union like CBUS should at least be told how much of their hard-earned money is being donated to the trade union movement and why.