The ACTU said the crucial test for the Abbott Government following the release of the Financial Systems Inquiry Report will be whether they put the interests of ordinary working Australians ahead of the big banks.
ACTU Assistant Secretary Tim Lyons said the superannuation safety net provides security in retirement to millions of Australians and the overriding purpose of any reform should be to help workers save and invest for their retirement, not to provide a quick and easy source of profit for major financial corporations.
“The Abbott Government showed their true colours when they tried to put the interests of the big banks ahead of millions of ordinary Australians with their FOFA reforms,” Mr Lyons said.
“We know they were on the wrong side of community opinion there and we hope they’ve taken notice and don’t try to use the Murray Inquiry recommendations to do the bidding of the big banks again.”
Mr Lyons said the recommendation for the current safety net superannuation fund selection process, overseen by the Fair Work Commission to be maintained in the short term was positive but warned that the big banks will be circling ahead of any future review.
“Superannuation contributions are deferred wages, a benefit of employment that belongs to workers and which many routinely bargain to improve,” Mr Lyons said.
“It is therefore appropriate that modern awards, as a key element of the workplace relations safety net, help to protect the interests of employees who are disengaged from their super by obliging employers to make default contributions to funds that operate in the best interests of the workers.
“Contrary to some misleading public reports, the modern awards system does not operate to deny individuals choice in relation to their super fund. It allows those who wish to choose to do so, but offers appropriate protection to those who do not and who therefore rely on default arrangements.
“Australian industry funds are some of the strongest, best performing and best governed in Australia and unlike retail funds that operate as a source of profit for parent corporations and shareholders, Industry funds operate primarily in the interests of fund members.
“With this in mind, we also call on the Government to follow Mr Murray’s rejection of lobbying from the big banks that would have permitted them to sell business banking services bundled with employee super to employers that would almost certainly have disadvantaged members.”
Mr Lyons welcomed the acknowledgement that superannuation tax concessions need to be made more equitable and sustainable, a position that the ACTU has held for many years, but said the ACTU does not support the mandating of majority “independent directors” on the boards of industry super funds.
“No evidence has been presented that the governance of not-for-profit and industry funds is failing members and that such funds should therefore be compelled to alter their governance structures,” Mr Lyons said.
“The continued multi-pronged attack on the not-for-profit model and governance structure of the industry funds is entirely for the benefit of the finance industry who want to make private profit from workers’ savings.
“The industry funds have outperformed the retail funds, and the ‘no commission’ model continues to embarrass the finance sector and the banks. The argument that industry funds have a conflict is laughable, considering they are run entirely to benefit members.”
Mr Lyons said the ACTU and unions would fight to keep superannuation default funds in Awards and enterprise bargaining agreements to protect workers’ rights and entitlements.
“For over 30 years unions have played a leading role in campaigning for better retirement incomes for working people, without which there would be no Superannuation Guarantee and many workers in Australia today would not have their own superannuation account containing savings that will help them live a more comfortable life in retirement,” Mr Lyons said.