Interview with Ali Moore on ABC Radio Melbourne

E&OE………

Ali Moore

Andrew Bragg is a Shadow Assistant Minister for Home Ownership. He's a Liberal Senator in New South Wales. He's also the Chair of the Economics References Committee, which is the Senate Committee that was listening to that apology, or maybe I should say, eliciting that apology today. Andrew Bragg, welcome to Drive.

Senator Bragg

Ali, how are you? 

Ali Moore

Well, thank you. This isn't the first time Cbus has been in the spotlight. I know our morning programme here on 774 has been speaking with Carolyn Hocking. She waited 15 months to receive her deceased husband's superannuation. Cbus apologised at that time. What did they say to you today?

Senator Bragg

Well, the super funds are the most privileged industry in Australia because they open the door, and the money falls in. So, the least they can do is try and process insurance claims quickly when families are undergoing a bereavement. Look, Cbus, I thought, was quite evasive today at the hearing. I think they have a lot of initiatives they're pursuing in Canberra with the Treasurer, Jim Chalmers, which they weren't too open about. But look, I think the regulator now has to make his case in the court that they have failed to meet their duties to members.

Ali Moore

Does that satisfy you that is how this is going to be dealt with in the courts through ASIC's action?

Senator Bragg

Look, I think there are a few issues here. One of them is that the super governance arrangements are quite poor, and clearly, they're delivering poor consumer outcomes. I mean, the fact that the CFMEU is still owning Cbus in part, and it is putting three...

Ali Moore

What do you mean owning? You can't really own a super fund. It's owned by its members.

Senator Bragg

It's not owned by the members; it's owned by the shareholders. And the shareholders are the CFMEU and a bunch of other unions and employer groups. And so, the CFMEU actually own 21 % of the fund, and they put three people onto the board of the Cbus fund. And so even though the Parliament has put the CFMEU into administration, they're still running a super fund. So, it's quite extraordinary.

Ali Moore

Do you link that with the issues that Cbus is now facing?

Senator Bragg

I'm one of the housing spokespeople, and one of the things I look at every day is who's helped cause the housing crisis. And one of the guilty parties here is the CFMEU. They've massively increased the cost of apartment buildings by 30% in some cases. So, I don't think they should be turned to for housing advice. Certainly, I don't think they should be allowed to run a major super fund, like Cbus or any other fund for that matter.

Ali Moore

Is this issue around the processing of payouts for death and disability payments? I mean, it doesn't seem to be limited to Cbus. The indication through ASIC is that it's actually a broader industry problem 

Senator Bragg

There's no doubt. The Australian Financial Compliance Authority data shows that it's a systemic issue, which is why we have a Senate Inquiry into these issues. Very sadly, the super funds have not been dealing with these claims quickly, and therefore, they are now facing significant public scrutiny. As I say, banks, airlines, and the like are, of course, important products, and they have been under a lot of scrutiny in Canberra recently. But super is probably the most deserving of scrutiny, given it is mandatory for everyone.

Ali Moore

Do you think that there needs to be regulatory change around this area in particular?

Senator Bragg

Well, I think there's a strong case to make that the governance arrangements for the funds are totally antiquated. And it's, I think, helping drive some poor outcomes. I mean, the fact that Wayne Swan is the President of the Fund and the President of the Labor Party and engaging in all sorts of lobbying with Jim Chambers, as we've uncovered today, I think is very problematic from a governance point of view. I think that is also cascading into some poor member outcomes, as we've seen with the insurance issues.

Ali Moore

You're not a fan of superannuation, though, are you … compulsory?

Senator Bragg

Look, I don't think that it always works well for people. And so, that's why we have passed a number of measures when we were in government to improve the operation of the system. So, one of those changes we made was that when the funds have regulatory fines, they must pay for them themselves, not charge the members. But somehow, the funds have found a way to unwind that. And now, for example, if Cbus has to pay a massive fine to ASIC, the members of the fund will pay, not the trustees, which I think is absolutely ridiculous.

Ali Moore

Andrew Bragg, thank you for talking to us. 

Senator Bragg

Thanks, Ali. Cheers. Bye 

[Ends]

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