Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Tourism) Share this | Hansard source

I rise today to speak on the Governance of Australian Government Superannuation Schemes Bill 2011, the ComSuper Bill 2011 and the Superannuation Legislation (Consequential Amendments and Transitional Provisions) Bill 2011. Just over a year ago we stood in this chamber debating this very bill. This bill lapsed because the then Minister for Finance and Deregulation, Lindsay Tanner, failed to consult adequately with stakeholders and the crossbenchers in the Senate and refused to take onboard the advice that was provided by the veteran community. It is true that this bill will take various organisations—one of those being the Australian Reward Investment Alliance, ARIA, who have the investment management rights over the CSS, PSS and PSSap—and bring them together with the board which oversees the MSBS as well as parts of the DFRDB and DFRB.

The Public Service superannuation fund this time last year amounted to some $16 billion. The money held on MSBS amounted to some $3 billion. As I stated when this bill was being debated last year, in principle the coalition has no problem with that money being joined together for investment to provide greater returns to each member, whether they be public servants or retired military personnel. The coalition sticking point all along has been this Labor government's desire, in essence, to hand over control of these funds de facto to the ACTU.

A board will be formed that will have five employer directors chosen in consultation between finance and defence ministers. It will have three members nominated by the President of the ACTU. It will have only two members nominated by the Chief of the Defence Force and it will have one independent chair. Already Defence is behind the eight ball, because there are three sectors of service in the Defence Force. There is the Air Force, there is the Navy and there is the Army. But the issue with this bill that concerns the coalition most of all is not just the imbalance in the structure of the board; it is the fact that the minister cannot dismiss an ACTU-nominated director. The President of the ACTU has more power in control of these funds than the minister, who ultimately is accountable to this parliament for the administration of the funds. This is outlined in the explanatory memorandum, which says:

The CEO is not subject to ministerial direction in the performance of this statutory function.

Given the make-up of the board, the CEO is de facto responsible to the President of the ACTU. That is an area that we have concerns with.

I cannot recollect any board of 11 where you need a quorum of nine. As my colleague the member for Fadden so rightly pointed out, this would mean that the ACTU could spoil the quorum and delay the progress of any investment decisions if it does not go their way.

The thing that concerns me most of all is the unintended consequences of this. In the last parliament I was the shadow minister responsible for this—and I congratulate the member for Fadden for the work that he has been doing on behalf of our defence members. One of the briefings said that this $16 billion and $3 billion will be combined to create a $19 billion fund which will then be put out to tender. It will not be the board of directors working out where the investment goes. It will go to tender. I suspect that sitting in the back of the mind of the President of the ACTU and all the ACTU members is the idea that this fund would be well placed with an ACTU-driven superannuation investment arm. That is why the sticking point is with this government. They want to make sure that they have absolute control over all these funds so that they can put all these funds to a union-driven superannuation management fund and therefore prop up the union movement even further.

Mr Perrett interjecting—

This will be payback. The member opposite says to name the ones that will exist. The member is nothing but a fool if he does not understand that within a moment's notice the ACTU could pop up an arm and establish such a body.

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