Senate debates

Tuesday, 21 August 2018


Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry

7:35 pm

Photo of John WilliamsJohn Williams (NSW, National Party) Share this | | Hansard source

I rise to speak about the banking royal commission. After having a total hip replacement six or seven weeks ago, I spent some time at home after a week in hospital and found it very interesting watching the royal commission. Commissioner Hayne QC, Mr Hodge QC and Ms Rowena Orr QC have become household names in superannuation. I'm glad we included superannuation in the terms of reference, because I doubt those opposite would have. It's amazing that we learnt of banks' commissions continuing. One bank delayed clients' transfers from default accounts to MySuper accounts until just weeks before the 2017 deadline, and encouraged advisers to contact clients in order to keep the fees flowing. Another has been charging members administration fees for services that have not been quantified, agreed or explained. Another failed to transfer 15,000 customers into a MySuper account by the 2014 deadline, as required by law. Another raked in more than $3 billion pushing a superannuation product through its branches under the pretext of general advice, before ASIC stepped in.

The reason I am talking about this is that we have certain bills coming before the Senate. They actually came to the Senate in September last year. One bill, the Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Bill 2017, was, I believe, debated here at the time but hasn't been voted on. You all know how this place works. If we don't have the numbers, it gets put on the backburner. These bills require trustees to undertake an annual outcome assessment test on whether the outcome is being delivered or is promoting the financial interests of their MySuper members. It allows APRA to refuse or cancel authority to offer a MySuper product if APRA has reason to believe a trustee may fail to comply with its obligations. Importantly, it imposes civil and criminal penalties of up to $420,000 and five years' jail for directors of trustees who fail to execute their responsibility to act in the best interests of members or to further their own interests.

When superannuation came in 25 years ago, no criminal laws were attached to it. We've seen billions siphoned off—you could say stolen—for no criminal punishment. I am saying to the Senate tonight that if, when these bills come here, Labor and the Greens oppose that punishment they will have to have a good reason for it. Criminal activity is criminal activity, and I want to see these criminal charges attached to superannuation so that, in future, when individuals, trustees or directors, steal money from the retirement funds of hardworking Australians, they face the proper music. I was amazed that this failed in the past.

The bill will provide APRA with a new direction power, harmonising its powers across the banking, insurance and superannuation industries, and enabling APRA to intervene to address prudential concerns in a manner that ensures action is taken. It will introduce a workable portfolio holdings disclosure regime to provide transparency on where super funds are investing member's contributions. It provides APRA with the ability to obtain information on expenses incurred by funds, to better understand how they are using members' contributions and whether they are in line with their obligation to act in their members' best interests. There are other things as well.

Another bill, the Treasury Laws Amendment (Protecting Your Superannuation Package) Bill 2018, bans exit fees on all accounts, regardless of balance. It caps administration and investment fees at three per cent annually for low-balance accounts. While opt-out for insurance is the situation now with group insurance, under-25s will have an opt-in situation, as will those with low-balance accounts where no contribution has been made for 13 months or more. So, the fund won't simply be taking away the savings through insurance premiums. It protects low-balance accounts by transferring them to the ATO, where no contributions have been made for 13 months or more.

The point I'm making is that, when these bills come back to the Senate—and I'm confident they're going to come pretty soon—I hope that Labor and the Greens do not oppose them this time and that they give us the numbers to see that people, when they commit criminal offences, actually face criminal law, serious fines and jail terms for stealing Australian workers' monies and retirement funds, as they should. When these bills come back, I will follow them with a lot of interest to see that those opposite do the right thing this time, instead of living in fear of their Industry SuperFunds trustees and friends.