Have you ever wondered why big business was so totally behind the failed voice campaign and, before that, in favour of same-sex marriage? Has it ever puzzled you that the green-left now consistently outspends the conservative side of politics in election campaigns, even though it’s the Coalition that was always thought to represent the “big end of town”?
There are a number of factors at work here: the sustained leftist indoctrination of the bright students (once just at uni but now in schools too) who eventually go on to dominate the commanding heights of our society and economy; plus the “long march of the left” more generally through our institutions.
But a key element in the radicalisation of big business and in the avalanche of money to support leftist causes has been the mobilisation of our savings into union-dominated superannuation funds that are staffed by Labor activists and largely run by former Labor politicians.
Arguably, thanks to the union-dominated super funds which now manage well over a trillion dollars of retirement savings for about 10 million Australian workers, there’s a giant green-left octopus with tentacles into every corner of the economy that’s reorienting big business towards social, rather than market, objectives.
Maybe socialising capitalism wasn’t the explicit objective when Paul Keating and then ACTU secretary Bill Kelty (and Garry Weaven) set up the compulsory super system, more than three decades back, but that’s been the outcome; especially as the savings taken out of workers’ pockets and given to the union-dominated funds have multiplied, with compulsory contributions climbing from an initial 3 per cent of wages to over 10 per cent now, and legislated for 12 per cent, with Labor wanting 15 per cent as its goal.
It was dressed up as helping people have a better retirement, but the main purpose was always to revive declining union influence (now less than 10 per cent of the private sector workforce) and, in the process, to turn big businesses into social enterprises.
Now, the move towards a green-leftist corporatist state is set to be turbocharged with the Albanese government’s recent announcement that former ACTU boss and Labor minister Greg Combet would succeed Peter Costello as chair of the Future Fund. Since leaving parliament in 2013, Combet has been chair of Industry Super Australia, an umbrella organisation owned by a number of large industry super funds, that in turn provided services back to them, such as investment advice, wealth management, government relations and campaigning.
As part of the closed shop operating in this sector, he’s also been deputy chair of the largest single union-dominated fund, AustralianSuper. More recently, he’s been the head of the Net Zero Economy Agency.
In that capacity, he has called for the mobilisation of workers’ savings towards “nation-building” projects such as welfare housing and green energy, that would not attract investment on a normal cost-return basis.
As Future Fund chair, he’ll now have the chance to redirect the $200-plus billion that’s been accumulated to help fund the pensions of public servants and military personnel, and that under Costello had generated returns of 9 per cent a year, into less prospective ventures that better accord with the left’s agenda.
But this is just the tip of the iceberg of the Labor Inc that Keating and Kelty set up and that successive Coalition governments have largely failed to rein in. The biggest of the union-dominated super entities, AustralianSuper, is chaired by Don Russell, a former Keating staffer.
Other large industry funds include HESTA, chaired by former Labor health minister Nicola Roxon; Cbus, chaired by former Labor Treasurer and current Labor national president Wayne Swan (before that, Steve Bracks); TWU Super, chaired by former Labor minister Nick Sherry; and Industry Super Holdings (the latest umbrella entity for the bodies providing services to many of the union-dominated funds), chaired by former Labor candidate and ACTU official Cath Bowtell.
John Howard has described the governance of these super entities as “almost like a House of Lords for Labor politicians”. And these are the funds that are growing strongly because they’re mostly the default superannuation choices for workers who fail to nominate a fund when they join a business and because the alternative for workers who don’t want to self-manage their superannuation – the retail funds that were generally owned by banks – have been discredited by the banking royal commission which Labor pressured the Coalition into setting up.
To put the economic clout of these funds into perspective, with nearly $300bn under management, the wealth controlled by AustralianSuper is twice the market capitalisation of BHP, our biggest public company.
What’s more, these union-dominated funds are starting to throw their weight around: whether that’s insisting that the public companies, where they have a large shareholding, disinvest in fossil fuels as part of the “ESG” (environmental, social, governance) push; or by taking direct control of important national assets.
For instance, an industry super fund consortium has bid to own Sydney Airport; super funds have lobbied against the reappointment of public company directors that don’t share their goals; and AustralianSuper has reportedly blocked a Canadian takeover of Origin Energy, partly on environmental grounds.
Meanwhile, unions have demanded super funds review their investments in CSL after Australia’s third-largest company (by market capitalisation) supposedly had a strategy to scale back highly paid workers’ conditions.
Then there’s the issue of super funds channelling money into unions that can then be recycled into the Labor Party.
In 2022, while unions gave some $17m to the ALP, super funds gave some $9m to unions. And if you want to know why sporting organisations were so quick to line up behind the voice, part of the explanation is another one of the big union funds, Hostplus, that reportedly gave nearly $2m in sponsorship to the AFL plus further large sponsorships to other big sports bodies.
Then there’s the issue of the training bodies which super funds sometimes sponsor and that unions often run.
In one recent notorious case, the electrical trades union tried to include in an award a provision that, in order to access pay increases, workers had to undertake a training course. This course was free to union members but cost twice the union fee to non-members. And the only entity reportedly running this course was the union itself.
None of this is going to improve while the Albanese government is in office. The question, though, is whether this giant union-corporate conglomerate is now too powerful for any Coalition government to touch. A reason for the then-Morrison government delaying its signature “super for homes” policy till the last week of the 2022 campaign was fear of the union-super response.
These days, opposition Treasury spokesman Angus Taylor keeps stressing that super balances belong to individuals, not to the funds or to the government. But if it really is our money, and not a government piggy bank, why not make compulsory super contributions optional? Because it’s still tax-advantaged, many would keep paying in.
But especially during a cost of living crisis, why wouldn’t the Coalition consider letting people take the nearly 12 per cent of wages that their employers put into super on their behalf as a pay rise instead?
It’s not as if compulsory super has reduced pension dependency for retirees, which is down just 2 per cent over three decades.
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