"Whichever party is in office, theTreasury is in power."
-~ Harold Wilson
Assistant Treasurer Stephen Jones is definitely not for sale
The assistant treasurer is working very hard for his primary constituency, but it’s not the voters of Wollongong.
Michael RoddanNational correspondentIt was 2015 when Joe Hockey was awarded $200,000 by the Federal Court after The Sydney Morning Herald wrongly labelled him “Treasurer for sale”, an accusation we’d never level at Stephen Jones, no less due to his lower ranking as assistant treasurer.
Jones is, however, working very hard for his primary constituency (no, not the voters of the Illawarra) – the industry superannuation sector.
Since taking office, Jones has bent over backwards for the defined contribution industrial complex. His first Treasury consultation seeks to defend super funds from the inglorious requirement to disclose to members itemised political donations and payments to industrial bodies (no coincidence these flow overwhelmingly to Labor entities).
Labor MP Stephen Jones has taken a strong interest in superannuation reform.
Since Jones’ announcement of the regulatory tweak, no reasonable or defensible rationale has emerged. His excuse that his reforms demolish an “unnecessary administrative burden” on funds sits uncomfortably next to Treasury’s own contention that the laws have “no more than a minor regulatory impact”, which is why “no regulatory impact statement has been prepared”.
Then there is the concurrent Treasury review of the Coalition’s “best financial interests” duty. It was designed to ensure super funds allocate member savings in that manner, curtailing a sector drunk on dubious marketing arrangements, lavish sponsorships and questionable investment arrangements.
Curious, also, is the support for this review from religiously geared funds, such as Christian Super CEO Ross Piper, whose fund was ordered by the regulator to merge after “persistent investment underperformance”, and Crescent Wealth managing director Talal Yassine, a one-time Labor preselection seeker, whose own annual member outcomes assessment finds its fees and costs “are not appropriate having regard to their [members’] financial interests”.
Super funds are not banks
But wait, there’s more! To further sweeten the situation, Jones told our sister paper, The Sydney Morning Herald, on Monday he now plans to issue a discussion paper examining fund mergers and the appropriate size of funds.
Here, Jones has torched mountains of expensive research to claim “there should be a space for small and medium-sized ones as well”, putting him at odds with a regulator that is adamant efficient scale can only be found in funds with more than $30 billion in assets.
His argument that dominant mega-funds could replicate the harms of the oligopolistic banking sector is as ridiculous as it is diversionary.
Due to the compulsory nature of super contributions and the rigging of the industrial system to guarantee cash flows, competition in the super sector is at best on the margins, and overwhelmingly manifests in the addition of unnecessary bells and whistles (mainly by micro-funds tricking gullible demographicsinto accepting poorer outcomes).
Just as absurd is Jones appearing on the same page as First Super chief executive Bill Watson, who warned “very powerful forces” are clamouring for “the creation of a super system that mirrors the banking system” while clinging to one-year performance figures that showed First Super and tiny fund comrades Christian Super and Qantas Super among the top 10 for FY2021-22 investment returns.
Any (assistant) treasurer worth their mettle would know the uselessness of such short-termism. Indeed, over 10 years to FY22, the top funds are (in order) the $68 billion Hostplus, the $260 billion AustralianSuper, the $200 billion Australian Retirement Trust, the $74 billion Cbus and the $105 billion UniSuper. Need we go on?
According to figures being examined by the regulator, the $3.6 billion First Super, chaired by CFMEU heavy Michael O’Connor, recorded $10.8 million in non-donation and non-gift payments to political entities over three years, nearly as much as the $11.2 million worth of payments the far-larger CFMEU-linked Cbus made over five years.
But that doesn’t sound like “very powerful forces” clamouring to shape the superannuation system, does it?
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The creation of “mega” super funds could leave the nation with problems similar to the big four commercial banks, Financial Services Minister Stephen Jones has warned amid calls from small funds not to be forced into mergers.
Jones, who is leading a delegation of fund investment officers to Jakarta this week, said there had to be space in the super sector for small and medium-sized operators as well as those controlling hundreds of billions of dollars in investment.
Mega super funds could leave nation with too big to fail problem: Jones