Senator REYNOLDS (Western Australia) (13:23): I too rise to commend this government on both of these bills, the Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Bill 2017 and the Superannuation Laws Amendment (Strengthening Trustee Arrangements) Bill 2017, although, after speaking first of all on the Marriage Amendment (Definition and Religious Freedoms) Bill 2017 this morning, it does almost seem like a bit of a let-down, talking about Treasury and superannuation—that is, until you realise just how important these bills actually are. In 2017 the superannuation system has grown exponentially. Today it is a system now worth around $2.3 trillion. That is $2.3 trillion of money from millions of hardworking Australian men and women who absolutely deserve to know that their money is being spent in a transparent and accountable manner and in a way that is always in their best interests to probably the highest possible standards of any governance regime.

I was grossly disappointed to hear the contribution just now from Senator Dastyari and to hear that Labor are not supporting this bill. I’m disappointed but, unfortunately, hardly surprised, listening to Senator Dastyari trying his best to shadow-box against big business and big banks, and pulling out all of these absolutely spurious reasons to avoid greater governance, accountability and transparency for millions of Australian superannuation holders. I find it somewhat ironic that he and those on the opposite side, who are the biggest defenders of big unions, in this place, in recent committee inquiries, have heard that the biggest offenders of all in terms of sticky fingers are the big unions who have gone into absolutely atrociously bad secret deals with big businesses to ensure that unions keep their sticky fingers on union members’ fees. Under these deals they get the big businesses to make sure that their workers’ only option is to sign up with union superannuation-related funds. These bills absolutely provide greater accountability and transparency in governance. That cannot possibly be a bad thing, despite Senator Dastyari’s rather clever—actually, it wasn’t even that clever—or heroic attempts to find some way of demonstrating how greater accountability for those who manage our superannuation funds could be. All I’d say is, ‘Good try, Senator Dastyari, but I think that’s a big, fat F.’

These bills do provide greater transparency and accountability. They are unashamedly focused to ensure that Australia’s superannuation system delivers outcomes for its members above the vested interests of the industry and those who manage $2.3 trillion of Australians’ money by introducing a stronger regulatory framework and by assuring that a portion of the directors of these funds are independent. Just think about that. Those opposite are arguing against having a board that has a portion of the directors as independent. It is frightening that anybody in this place would argue against having independent directors. I would hope that people listening and members of the public would actually get on to the Labor Party and actually say to them, ‘What is wrong with ensuring those who manage my superannuation funds have the greatest possible transparency and accountability?’ Having independent people on their boards who come from a range of sectors in the community brings diversity of thought and opinion and also, I might say, a diversity of gender, which I will come back and talk about shortly.

The first of these bills, the Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Bill 2017, is a bit of a mouthful but an important bill. This bill provides comprehensive measures focused on protecting members’ money and members’ interests. It still just astounds me that anybody opposite could actually get up in this place and say, ‘No, we don’t believe in creating greater accountability and protections for you Australian mums and dads who have invested a lifetime of savings in your superannuation.’ It’s a package along with another suite of measures that has been developed with a very clear objective: to improve the outcome for Australian consumers of these products.

As the minister indicated in the second reading speech, this is what the bills will do:

… help deliver all Australians a strong and modern superannuation system with a stronger prudential regulator that is solely focused on delivering outcomes for all Australians who rely on these funds to secure their retirement.

It is pretty simple and pretty clear. Read the bill. That is clearly what it does. Yet we have Senator Dastyari coming into this chamber today to say, ‘We don’t support those principles. Opposition crossbenchers, go slow, don’t think about these things.’

Senator Sterle: You sound just like him!

Senator REYNOLDS: Sorry. This bill achieves these objectives by also amending the Superannuation Industry (Supervision) Act, and it does so through the following eight schedules. Again, I will actually read these schedules out because any objective observer, listener or reader of these could not help but to think: ‘That’s exactly what I want from my superannuation funds. That’s exactly the sort of accountability and transparency I want for my superannuation funds.’

The first schedule amends the SIS Act to strengthen the obligation on super trustees to consider the appropriateness of their super products and how these products deliver appropriate outcomes to their individual members. What a terrible thing those opposite must think it is that there is actually greater governance for super trustees to consider the appropriateness of their packages for individual members, not for the unions who are associated with these superannuation funds but for the members themselves—outrageous, Labor!

What is the second outrageous proposition that we want to introduce for people with superannuation accounts? We actually want to give the regulator enhanced powers and capacity to enforce and regulate super funds. Yes, Labor, I can see how it is such a terrible principle to give the regulators greater powers to enforce and regulate these super funds.

Let’s have a look at the third schedule that Labor thinks is so dreadful. Schedule 3 reinforces the purpose that the funds must always deliver for their members through appropriate, transparent and accountable means by imposing both civil and criminal penalties. Labor, I can really understand why you don’t want that to happen for the millions of Australian superannuation holders. How disgusting that we actually want to make sure that superannuation funds deliver for their members by more transparent and accountable means. Shocking! I can see why you’re not supporting it.

What do the Labor Party think about schedules 4 and 5? Well, let’s have a look: sections 4 and 5 strengthen the regulator’s supervision and enforcement powers specifically to include the power to issue directions when a change of ownership or control of registered superannuable superannuation-entity licences take place and when the regulator has prudential concerns. That is a lot of gobbledegook to most of us, including myself, probably; however, it just means greater powers and ability to make sure that those who have their fingers on your superannuation account do the right thing.

The Labor Party clearly have concerns about those four things. What else do they have concerns about? They have concerns about schedule 6, which amends the Corporations Act to include requirements for portfolio holdings to be made publicly available. Oh, dear. Labor don’t want these accounts and these portfolio holdings to be made public and to be held accountable so that people with these funds can actually see—goodness me!—who’s involved in their superannuation funds. Dearie me!

Schedule 7 refers to funds to hold annual general meetings for members to discuss key aspects of the funds and provide members with a forum to ask any questions in relation to the fund’s performance and operations. I can see why the Labor Party don’t want this. Just imagine members of superannuation funds actually having the opportunity every year, like shareholders of other companies, to hold those who hold their money in their trust accountable and transparent. Shocking!

What is the final schedule that the Labor Party is so opposed to? Schedule 8 relates to reporting standards and provides the regulator with the power to inspect and obtain information on expenses incurred by the funds. Oh, dearie me; I can see why Labor doesn’t support this either. How terrible to have those who have their fingers all over our superannuation having a regulator to inspect and obtain information about expenses incurred by the funds. That translates to the people who manage your accounts actually being accountable for the parts of your money they are spending on themselves. I can understand why the Labor Party and the unions would certainly not want this.

I commend the government on all eight of the provisions in the schedules, because, unlike those opposite, we think there should be greater accountability and greater transparency for every single Australian who has a superannuation fund to know what those who are managing their funds are doing with their funds.

What does industry say about this thing that the Labor Party finds so objectionable? The Financial Services Council stated:

… the reforms are a cohesive package and are designed to deliver better outcomes for consumers.

Oh, dear! ‘Better outcomes for consumers’. The Financial Services Council said:

We urge the Senate to pass the package of reforms as they are clearly designed to act cohesively, put the interests of consumers first and apply evenly without fear or favour across the entire superannuation industry.

I have to say, Mr Acting Deputy President, those on this side of the chamber could not agree more—that this is essential legislation.

So what have Industry Super Australia said about this? They’ve also provided their support and, in a media release on 24 July, stated that they would welcome the emphasis on transparency and accountability and that they would also urge the regulator to use powers to investigate the cause of bank-owned super funds’ chronic underperformance. So, contrary to all of the shadow-boxing that Senator Dastyari has just attempted to do in this chamber on this legislation, Industry Super Australia themselves have said, ‘This is a good thing.’ Not only is it a good thing, they’re not shadow-boxing at some big industry or big banks; they have said it will allow the regulator to use powers to investigate the cause of bank-owned super funds’ chronic underperformance. Again, we on this side of the chamber think that is a uniformly good thing.

Even a senior ASIC executive leader indicated that ASIC was supportive of initiatives that enhanced transparency for members and that the disclosure of information for consumers will allow them to make better and more informed decisions. How those opposite could think that is, in any way, not a good thing for all working Australians looking to save for their retirement, I still cannot understand.

The second bill being debated here is the Superannuation Laws Amendment (Strengthening Trustee Arrangements) Bill 2017. This bill further reaffirms this government’s commitment to the appropriate, transparent and accountable management of Australian workers’ superannuation funds. The Cooper review—now, this is actually very interesting because this was a Labor-initiated review by the Gillard government, as I understand. So this is not a review commissioned by those on this side of the chamber. This was your own review. The Cooper review into superannuation—again, as I said, which was initiated by those opposite—had some very interesting things to say. The Cooper review’s report stated that governance structures had not kept up with development of the industry and that there had been difficulty for trustees and their trustee directors in understanding what was expected of them. Think about the implications of that. This is saying that those men and women, the trustees and their trustee directors, are having trouble in understanding the governance requirements for them managing all of our superannuation funds. If that doesn’t keep Australians awake at night, I don’t know what should. So that was the Labor Party review and report that said that.

What else did the Labor review have to say? It also said that governance structures had not kept up with developments in the industry and that there had been difficulties for their trustees in understanding what was required under these new arrangements. While Labor did not implement measures that would put tighter governance and transparency requirements over trade union superannuation managed funds, this side of the house, this government, is doing it. This bill addresses that by legislating for the definition of ‘independent’ and provides a clear governance structure which many key industry stakeholders have supported.

One of the things that I particularly like about this bill is that it will implement new board governance structures in addition to mandating that at least one-third of trustee directors and the chair be independent from the superannuation funds. I think most Australians would probably be incredibly shocked to learn the composition of some of the boards that actually manage their retirement income. What did the Labor Party’s review say about this measure we’re now proposing? Guess what: the Cooper review actually endorsed mandating this very requirement. Again, this bill addresses many of the Cooper review’s reforms that the Labor Party, because of their union ties, simply would never implement. What utter hypocrisy that is—but, again, as I said, it’s hardly surprising.

Some of the industry funds who are members of the Australian Council of Superannuation Investors have no shame when they threaten to wield their enormous economic power as active shareholders against public companies with a poor record of gender diversity on their boards. These guidelines stated in February in 2015: ‘ACSI proposes a target for women comprising 30 per cent of all ASX 200 boards by the end of this year.’ Additionally, they also recommended to vote against the re-election of directors in those companies which performed poorly on board gender diversity where attempts by them to engage at senior levels had been ignored and/or the board could not articulate a clear strategy to address gender diversity in the near term. They’ve also announced that they will recommend their members vote against the re-election of company directors who sit on boards with no female members.

Guess what? What do you think the situation is on the boards of our superannuation funds? Before they start moralising about other companies—and more gender diversity and more diversity generally is a uniformly good thing—some of these superannuation funds should look to practise what they preach. There are three industry superannuation funds that have no women on their boards whatsoever—not a single one. Guess what? ACSI member TWUSUPER have no women on their board despite women making up 62 per cent of their total accounts as of June last year. There are others. The Australian Meat Industry Employees’ Superannuation Fund and NESS Super also have not a single woman on their boards. As at July 2017, there were five further funds where women made up less than one-fifth of their boards. These funds were Maritime Super, REST Industry Super, Prime Super, Intrust Super and Cbus. The REST board was only 11 per cent female, despite 60 per cent of its accounts belonging to women as of June last year. Intrust was in a similar position, with female directors making up only 17 per cent of its board despite women making up 54 per cent of its accounts.

It is unfathomable that funds representing a majority female membership do not have a single female on their boards of directors. Clearly, these union blokes think they still know what’s best for their female members. The same unions that dominate these super funds are the same unions that are religiously and continuously supported by those opposite, including in their opposition to this bill which their own Cooper review recommended and which this government is now implementing. Every single Australian working man and woman who is saving for their retirement deserves the highest possible transparency, governance and assurance that those sticky fingers, supported by those opposite, aren’t on their superannuation funds. So it is for all those reasons that I commend the government on these bills and commend them to the Senate.