Interview with Patricia Karvelas on ABC RN Breakfast

Subjects: Cbus board, CFMEU influence, Wayne Swan, Housing Australia Future Fund

E&OE………

Patricia Karvelas

Andrew Bragg is a Liberal Senator and the Chair of the Senate Committee on Economics and our guest this morning. Senator, welcome back to the program.

Senator Bragg

Hi, PK. How are you?

Patricia Karvelas

Good thank you. You want CFMEU board members kicked off Cbus. Why?

Senator Bragg

Well, I think Cbus should cut ties with the CFMEU because they're bringing the whole super industry into disrepute. These are allegations of organised crime, mafia-like activity. The Cbus fund, in particular, has been making large payments to the CFMEU. And as you said in your intro, it has a number of its officials on its board. So I think that it needs a major overhaul here, and the Government has been silent for some reason on these issues.

Patricia Karvelas

Fairfax is reporting that one union figure facing allegations of corruption was boasting about their influence at Cbus, but that could just be talk. There's boastful individuals, and then there's something systemic. Have we really seen anything systemic or solid evidence of wrongdoing?

Senator Bragg

Well, the corporate governance here is a joke. If the Labor Party wants to excommunicate the CFMEU from its labour movement. Why isn't it talking about ensuring that the Cbus and the super industry is clean of influence from the CFMEU? I think Wayne Swan, who's the Chair of Cbus and also President of the Labor Party, he should resign from either post because this is an unmanageable conflict of interest here. Effectively, you've got millions of dollars being transferred every year from the super funds like Cbus into the CFMEU. So if it's good enough for Labor to excommunicate them from their main political movement, then surely it's inappropriate for them to be involved in the compulsory superannuation scheme.

Patricia Karvelas

But the Cbus directors do have to pass, I understand, a fit and proper person test. Isn't that the way that you sort these things out?

Senator Bragg

Yeah, but there's a best financial interests test, which means that every dollar that's in superannuation can only be spent for the benefit of members. Last year, Cbus gave a sponsorship payment to CFMEU Victoria, which is now a disgrace of over $300,000. Now, how does that pass a fiduciary style duty? How does that sponsorship payment to a crooked union, how can that be in the best interest of the members of the super fund?

Patricia Karvelas

It's not just union picks though, on the Cbus board, there are six members of the sponsored industry group, Master Builders Australia. Don't you think they're probably, I'm not on that board, but I imagine with six members, they're playing a pretty big check and balance.

Senator Bragg

I don't think so because they're all part of the IR club. I think it's a totally antiquated corporate governance regime. The fact that the Government is so silent about these issues shows that they would rather put their big transfers and big payments from the super industry above any concerns they have about probity and governance. Ultimately, this is a compulsory savings scheme. I would have thought that every elected official would be worried about the probity and governance here.

Patricia Karvelas

If you're just tuning in, this is ABC RN Breakfast. I'm joined by Liberal Senator Andrew Bragg. We're talking about super funds being pressured to cut ties with the troubled CFMEU. You're a long-time critic of unions and their role in super funds. Are you trying to use the wrongdoing of this particular union to make a broader point here?

Senator Bragg

Well, the governance is obviously very questionable, but it also raises the issue of the CFMEU are massively inflating housing costs. They're adding a 30% premium. The Government want to use the Cbus fund to help them with their Housing Australia Future Fund, which is one of their housing policies. And I think that's inappropriate. I don't think there should be any role for Cbus or CFMEU in any of the government housing schemes like the Housing Australia Future Fund. I mean, these are the people that are making housing worse in Australia, not better.

Patricia Karvelas

Cbus is above its 10-year returns on its default fund. Isn't it doing pretty well for its members. I've got lots of text messages here saying they actually deliver better than the retail funds. If you are a member, you'd be pretty happy with your returns, wouldn't you?

Senator Bragg

The point here, though, is how can it stand that the government can excommunicate the CFMEU from its movement but leave the CFMEU directors on the board of a compulsory savings scheme? That's the point. The fact that all the Labor Ministers are so silent about this, including Stephen Jones, who's the day-to-day minister, I think is very telling. There's a huge amount of money that is transferred from the super funds into the labour movement more broadly. In the last reporting year, over $40 million was spent by the super funds into the ALP registered union. You have to ask yourself, why are they so quiet about this?

Patricia Karvelas

You also want Cbus excluded from the government's Housing Australia Future Fund. Cbus has committed half a billion dollars to the fund. Why would you want to cut them off? You'd lose the money potentially, wouldn't you? That's a risky idea.

Senator Bragg

Well, Labor has spent billions of dollars on these boondoggle housing schemes, and they've built no houses. Just eight years ago, we were building 230,000 houses in Australia. Now, we're only on track to build about 150,000 in this year. So this Housing Australia Future Fund is a bad idea. I'm very concerned that Wayne Swan is involved with this Housing Australia Future Fund in his dual role as the Labor Party President and head of the Cbus Fund. How is Cbus supposed to fix its governance issues when the person who is the President of the fund is also the President of the Labor Party, which is the recipient of large payments from the fund? I think Wayne Swans should resign either one of these positions to improve the governance of the Cbus fund immediately.

Patricia Karvelas

I want to just ask you about something else because you are also the Shadow Minister for buying houses. It's not quite the title, but can I go with that?

Senator Bragg

Sure.

Patricia Karvelas

Buying houses.

Senator Bragg

That's close enough.

Patricia Karvelas

Okay, it's an easier one. Now, there's this news out today, which is really disturbing that the number of babies being born is at their lowest level since 2006. We've had the largest annual drop since 1975. At that time, I think Australia was battling stagflation right? A lot of the reason that's been attributed is our cost of living crisis. That birth rate is just, wow, it's astonishing news, isn't it?

Senator Bragg

It's too expensive for many people to have children. It's too expensive for many people to buy a house. Education is very expensive. There's a whole lot of reasons why people under 40 are so angry in this country. They feel like the deck is stacked against them. In many ways, they are right. In relation to housing, we need to turn around home ownership very quickly. Otherwise, I think we will fundamentally change the character of our country.

Patricia Karvelas

At the same time, your party wants to limit migration at a really restricted rate, but we're not really replacing ourselves. How is that a sustainable way to build an economy?

Senator Bragg

Well, of course, we want to make sure that migration and housing is properly calibrated. When you're bringing in over a million people and you're building so few houses, you're going to make the housing problem so much worse. As you know, the ‘Australian Dream’ is a very important part of our country, and that is slipping away from younger people. We think that reducing foreign demand for Australian housing is a reasonable policy. But clearly, there's a lot of other policies that are needed to fix the housing mess. Chief amongst those is boosting supply.

Patricia Karvelas

Thank you so much for joining us.

Senator Bragg

Thank you.

Patricia Karvelas

That is Andrew Bragg. He's a Liberal Senator. He's the Chair of the Senate Committee on Economics.

[Ends]

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