Wayne Swan accused of giving misleading evidence to Senate about Cbus conduct

Liberal senator Andrew Bragg has accused Cbus chair Wayne Swan of providing ‘false or misleading evidence’ during his testimony to the Senate.

Cbus chairman Wayne Swan leaves his home in Brisbane. Picture: Lyndon Mechielsen/The Australian

The Coalition has raised the stakes in its pursuit of Cbus chairman Wayne Swan, accusing the ALP president and former federal Treasurer of providing “false or misleading evidence” during his testimony to the Senate over allegations that the superannuation fund mishandled death and disability payouts.

Liberal senator Andrew Bragg has levelled the accusation at Mr Swan, after the former deputy prime minister denied the industry fund had changed its trust deed arrangement to pay for fines.

Senator Bragg said the “evidence was clear that Cbus did indeed change its trust deed so that workers would pay fines”, after the fund overhauled its rules in 2022 allowing it to carve out a war chest to cover future penalties.

But a spokesman for Cbus said Mr Swan rejected the “clear implication” in Senator Bragg’s questioning during November Senate hearings that the fund had “changed the trust deed following ASIC’s recently announced legal action regarding our management of insurance claims and the potential for penalties to arise from it”.

“Like other not-for-profit super funds, Cbus Super made changes to its trust deed in 2021 following decisions of the Federal Court, which protected members’ financial interests by setting clear ­parameters for trustees to make provision for reserves to deal with potential future regulatory penalties,” the spokeswoman said.

Senator Bragg’s question to Mr Swan leaves room for interpretation as to whether he was asking about regulatory fines strictly in relation to the ASIC action.

Appearing in front of the Senate economics committee following revelations the $94bn construction industry super fund had mishandled death and dis­ability payouts, Mr Swan was asked about Cbus’s “apparent non-payment of insurance claims and the prospect of fines”.

After a brief to-and-fro about transactions with unions, Senator Bragg asked Mr Swan: “You have changed your trust deed so you can charge your members to build up a reserve to pay regulatory fines, have you not?”

Mr Swan replied: “No, it hasn’t done anything of the sort … we have reserves in our fund.”

Asked by Senator Bragg how big the reserves were, Mr Swan said “I’m not about to go through the finances of Cbus here” and refused to speculate if fund members would have to pay for fines.

After new laws were passed by the Morrison government following the Hayne banking and financial services royal commission, Cbus updated its trust deed in ­December 2021 to ensure the ­trustee could cover costs and ­financial risks related to future higher penalties.

Coalition analysis of Australian Prudential Regulation Authority data shows Cbus administration fees jumped from $97.5m in 2020 to $211.1m in 2023.

The Cbus changes, which came into effect in January 2022 when Mr Swan replaced former Victorian Labor premier Steve Bracks, allowed the fund’s trustee to “take a trustee services fee from the fund”.

“The funds collected from this fee will be set aside in the trustee’s own account and used to cover the costs the law now prevents a super fund from reimbursing,” a statement on the Cbus website says.

“The fee is expected to be paid from the fund’s existing reserves and as such won’t impact your investment return. The trustee fee will not increase the fees you pay either. From 1 January 2022 a trustee cannot pay for certain costs, like trustee penalties, out of the ­assets of a super fund. We have a strong track record of complying with superannuation laws, but this new law presents a unique challenge for trustees of profit-for-member super funds like Cbus.

“Cbus and other profit-for-members super funds don’t have access to separate funding of its own to meet costs like these. So while for-profit super funds (e.g. retail funds) will have their own income and funding available, industry super funds have had to develop an alternative method to cover these costs and manage these financial risks.”

Mr Swan during the 2024 Cbus Annual Members Meeting on November 28, 2024.

Senator Bragg said witnesses at Senate hearings must “not provide false or misleading evidence”.

“Mr Swan has serious questions to answer. Either the Senate has been misled or he didn’t know. Mr Swan is now at risk of being held in contempt. The contempt process is clear that Mr Swan will be given an opportunity to explain himself. The committee will then make a decision,” Senator Bragg said.

“Mr Swan was asked a very clear question about changing the trust deed to charge members for future fines. Mr Swan was clear that Cbus had not. Yet the evidence is clear that Cbus did indeed change its trust deed so that workers would pay fines rather than the CFMEU or other shareholders.

Senator Bragg said “mega rich unions pulling millions from super each year” should be forced to pay for fines and penalties.

“Why should workers pay again for the sins of trustees acting disgracefully? The governance of the system is a joke. No capital requirements, weak fit-and-proper tests and conflicts galore on the boards. Super has to be more than a retirement home for former Labor politicians and a cash cow for unions.”