Jonesy stumbles

Features Australia

But unions rule

Judith Sloan

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Judith Sloan

25 February 2023

9:00 AM

It was the first political setback for the Albanese government. Most senators – Coalition, Greens, the Jacqui Lambie Network – combined to overrule a disallowance motion inserted by hapless Assistant Treasurer, Stephen Jones, to keep the release of information about political donations and marketing made by superannuation funds to a minimum.

It had been an early favour called in by the union-controlled industry super funds.  They had been most displeased by a measure implemented by former Liberal treasurer, Josh Frydenberg. Heaven forbid: they would need to come clean about the members’ money they were shoveling out for political and related purposes. This would never do.

Jones made up some mumbo-jumbo excuse about excessive red-tape and Treasury did his bidding to back this bogus argument. All looked hunky dory. The fact that the aggregated information that would still need to be released by the industry super funds required the funds to assemble the more detailed information was something that Jones was careful to ignore.

Mind you, the vote to overrule Jones’s disallowance motion is not retrospective, so the industry super funds are relieved of the need to disclose the extent to which they chipped in to secure Labor’s victory at the last federal election.

At least, Senator Andrew Bragg, whose positioning on all sorts of issues is highly suspect (is he in the right party?), has done some admirable work trying to get to the bottom of the political donations made by industry super funds. By and large, the donations are indirect: hand over money to the unions and the unions then hand it over to the Labor party.

According to Bragg, Australian Electoral Commission figures indicate that nearly $13 million was paid from super funds to unions in 2020-21. ‘This is a new record, up from $11 million in the previous year.’ He adds that, ‘Super funds have paid $40 million to Labor party-affiliated unions in the past four years. Super funds are becoming the biggest political donors in the country.’

The fact that industry super funds are able to hand over members’ money unimpeded to trade unions is a very black mark against the Australian Prudential Regulation Authority. In theory, APRA is there to ensure that superannuation funds, with the exception of self-managed funds which are regulated by the Tax Office, meet their statutory obligations. And chief among these is the sole-purpose test that funds must seek to maximise the retirement incomes of their members.  How donations to unions could conceivably be regarded as meeting this test is anyone’s guess.

But over the years, APRA has applied all the power of a lettuce leaf to regulating superannuation funds. We had the laughable example of a number of industry super funds investing members’ funds in an on-line newspaper, the New Daily. There was no way that this should have been allowed but the super division of APRA offered up a number of pathetic excuses for its failure to act.

We had to appreciate that the investment dollars were being sourced from the administration accounts of members’ funds and the newspaper was in the job of educating people about the benefits of superannuation. It was only when the loss-making rag ran out of the initial investment from the super funds that the ‘assets’ were transferred to an industry super fund-related entity that isn’t regulated by APRA that the hard working staff down at the agency could sigh with relief.

Now it’s not clear how reinstating Frydenberg’s regulation on disclosures by superannuation funds will play out. At least, the members will have a clearer idea of where the money is going, although because the trustees are not elected – they are simply nominated by the unions and employer associations – it’s hard to enforce any accountability. It is likely however that the trustees will be more careful in the future about political (and marketing) spending because there are a sufficient number of pesky journalists who take an interest in this matter.

A broader point is how the unions can influence political outcomes when in fact fewer and fewer workers are joining up.  Recent figures point to the continuing cratering of the percentage of workers who belong to trade unions. In 2022, only 12.5 per cent of workers were members of trade unions compared with 41 per cent in 1992. Women are now more likely to be members than men – think here nurses and teachers. The most unionised sector is education and training followed by public administration. But even in these highly unionised sectors, membership is falling.

It’s interesting that the Australian Bureau of Statistics no longer publishes figures for the private sector only. But it’s clear that significantly less than 10 per cent of workers in the private sector are union members.

The reality is that the Labor party and the union movement are joined at the hip. Unions aren’t really there to represent the best interests of members, but rather to provide a source of temporary employment for ambitious urgers with mediocre university degrees to be preselected to the federal or state parliaments. And without the funds that unions provide, the Labor party would struggle to fund their campaigns. It’s the yin and yang of progressive politics.

Just getting back to Stephen Jones, it is truly astonishing that he is Assistant Treasurer. After all, there are a number of extremely well-qualified Labor parliamentarians, including Andrew Leigh, Andrew Charlton and Daniel Mulino, who could do that job on their ears and would be a material improvement on Jones. Of course, Jones is there for factional reasons – he is from the left and a former union official – or perhaps because he knows something.

He recently burst into the media claiming to know more than the Governor of the Reserve Bank. Now Phil Lowe should not be above criticism, even from the poison pen of this author, but let’s be realistic: he knows a whole lot more about the economy and inflationary trends than Jonesy.

So when the current Assistant Treasurer started telling us that inflation had peaked and there shouldn’t be any more increases in interest rates, he was talking through his politically-motivated hat.

He was also politicising an issue that should be left to the bank. Rather than the board of the bank taking any notice of this self-serving commentary, it’s likely to have the opposite effect: a demonstration of the bank’s independence and more increases in the cash rates – and therefore mortgage rates.

Bad call, Jonesy.

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Published by Nelle

I am interested in writing short stories for my pleasure and my family's but although I have published four family books I will not go down that path again but still want what I write out there so I will see how this goes

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