Thursday, 20 March 2014
During the last round of Senate estimates in the Education and Employment Legislation Committee, my colleague Senator Back asked a number of questions regarding the appointment of expert panel members for the Fair Work Commission's review of default superannuation funds in modern awards. The Financial Services Council had earlier raised concerns about potential conflicts of interest for two panel members.
On 7 March, the president, Justice Ross, removed Ms Vicki Allen and Mr Stephen Gibbs from the expert panel as a result of potential conflicts of interest due to their current directorships of superannuation funds under review. This, rather embarrassingly, left Mr Arthur Apted as the last member standing. The president has since reconstituted the panel by appointing Mr Tim Harcourt, who is a current panel member for the minimum wage review. However, I am concerned that the president may not have met his statutory obligations by appointing Mr Harcourt—who is arguably not sufficiently qualified to conduct the superannuation funds review—and replacing two expert members with just Mr Harcourt to join Mr Apted.
Mr Apted seems to have only recently disclosed that he is a member of AustralianSuper. Senators may be aware that AustralianSuper is named as a default fund in 73 of 109 modern awards that include superannuation provisions. It is unfortunate that this disclosure does not appear to have been forthcoming at the time of Mr Apted's appointment, but only at the direction of the president. So we have a situation where Mr Apted is reviewing default superannuation funds while he has his own superannuation with the single largest superannuation fund under review.
According to ASIC records, from 1992 to 2002 Mr Apted was also a director of AustralianSuper, in which—for the same period—he was also a non-beneficial shareholder. To be clear, this means that Mr Apted will be overseeing the review of default superannuation funds while a member of the fund which presently is a default fund for two-thirds of the modern award terms and having in the past been a director of this fund for a decade.
I am also concerned about perceptions of the cosiness of the new panel arrangements. Justice Ross, Mr Apted, Mr Harcourt and Senior Deputy President Acton were all comrades at the ACTU in the early 1990s at the time compulsory superannuation was first being implemented, as designed by the then Labor government and the ACTU. Justice Ross was the assistant secretary, Senior Deputy President Acton was a senior industrial officer, Mr Harcourt was a research officer and Mr Apted was an industrial and superannuation officer.
It is reported that then Secretary Bill Kelty and Justice Ross encouraged a young Mr Apted to take an interest in all things super. Talk about an IR club! But this is no ordinary IR club; it is the super IR club. Senators might be forgiven for thinking that the ACTU is having a super reunion on the Fair Work Commission's expert panel! Mr Apted has a long history of involvement in ACTU-affiliated superannuation funds. Most notably, Mr Apted headed ISPT, a trust established by former ACTU Assistant Secretary Garry Weaven as a vehicle for industry superannuation fund property investment.
The President and Mr Apted share a history of company directorships. In addition to AustralianSuper, throughout the 1990s they were, at various times, directors of Thales Australia Ltd, ACTU Financial Services Pty Ltd, ACTU-JCH Pty Ltd, Australian Investment Management Services Pty Ltd and ACTU Building Ltd. Given the continuing flaws in the appointments process, conflicts of interest and the tangled web of relationships here, I would invite Justice Ross to clarify what further steps he is taking to restore confidence and transparency in the default superannuation fund review process.
In passing, I note that one Arthur Apted appears to have been an active member of the Socialist Forum in the mid-1980s, while it was administered by none other than Julia Gillard. How many other persons might share the name of expert panel member, Mr Apted? How far these ACTU comrades have all come! This would be funny if it was not so serious.
The Fair Work Commission bears a heavy responsibility. The decisions it makes as part of this review have the potential to affect the retirement savings of millions of Australian workers. I will shortly be forwarding a copy of this adjournment speech to Justice Ross and may request his attendance at the next round of Senate estimates in May. I look forward to receiving the President's response to what is a very serious issue.
Senate adjourned at 18:44