Industry super funds ‘in breach of rules’ because they fund loss-making newsite The New Daily

Industry super funds are in breach of rules because they fund a loss-making news website, according to Liberal MPs.

Liberal MP Tim Wilson. Picture: Hollie Adams

Industry super funds are in breach of rules which say members‘ money should only be used to benefit retirement savings because they fund a loss-making news website, according to Liberal MPs Tim Wilson and Andrew Bragg.

Mr Wilson, who chairs the House of Representatives economics committee, said retirement savings were only supposed to be spent on increasing returns, “which makes the millions regularly ‘invested’ in the New Daily a joke”.

“The real question is why isn’t (the Australian Prudential Regulation Authority) pulling them up,” Mr Wilson said.

“That’s why I’ve recalled APRA … so they can explain their inaction and unwillingness to enforce the law.”

The New Daily was established in 2013 and initially bankrolled by AustralianSuper, Cbus and Industry Super Holdings. It is now owned by ISH after AustralianSuper sold its 30 per cent stake for zero consideration.

The online news site is unprofitable and requires ongoing financial support, although ISH earlier this month refused to reveal in a parliamentary committee hearing how much it was ploughing into keeping The New Daily alive.

ISH did not respond to a request for comment on Sunday, but industry super funds have been repeatedly questioned about their involvement with the news website.

During the Hayne Royal Commission hearing, AustralianSuper chief executive Ian Silk defended the investment saying it was included in the fund’s marketing budget and helped the raise financial literacy of members

The Hayne report eventually found that the investment was “undoubtedly more controversial” than its other investments, but that “spending on advertising … may be consistent with the sole purpose test”.

The New Daily includes commentary from former ABC correspondent Quentin Dempster, former The Age columnist Michael Pascoe and Labor president Wayne Swan.

Senator Bragg said superannuation had become “an endless pool of money for union hacks and finance sharks”. The New Daily “has to be the greatest boondoggle of all”, he said.

“The New Daily must be a breach of the sole purpose test. But the way APRA administers the test is laughable,” Senator Bragg said.

The Australian Taxation Office requires that all activities of a super fund must be for the sole purpose of providing retirement benefits to their members.

A breach of this test, as determined by the Australian Prudential Regulation Authority, would risk a fund losing its preferred tax treatment.

Industry Super Holdings earlier this month refused to disclose to the parliamentary committee chaired by Mr Wilson how much money it provided each year to the news website.

“That matter is confidential. These matters are prejudicial to The New Daily,” IFM Investors deputy chief executive Joshua Lim told the inquiry.

Mr Wilson on Sunday said it was “outrageous that trustees refuse to answer simple questions on how they spend Australian’s compulsory retirement savings; questions asked by the same parliament that industry super demands increase the compulsory superannuation guarantee only for them to refuse to answer how it is spent,” Mr Wilson said.