The Deafening Cost of Staying Selectively Silent When Unions and Big Super Are Involved

Originally published in The Australian

Under the Albanese government, unions and big super funds are a protected class.

Labor has made a habit of commenting on corporate scandals in the financial sector.

When Jim Chalmers addressed the media on the national accounts he made a point of commenting on the Commonwealth Bank’s decision to reverse ban cash payments.

When Westpac faced money laundering allegations in 2019, the Treasurer said: “These are extraordinarily serious allegations.

“If they are right, and there’s no indication that they’re wrong, then Westpac’s got some very serious questions to answer about their governance and about their processes.”

But when it came to questions about the failure of Cbus Super to pay out more than 10,000 death and disability payments, near radio silence. All he said was “we don’t comment on matters before the court”. He did when it concerned Westpac, just not Cbus.

Chalmers’ mentor, Labor national president and Cbus chair Wayne Swan, recently faced a Senate inquiry into retirement systems where he deflected blame to subordinates.

Cbus is Australia’s fourth-largest superannuation fund by assets, yet it has apparently failed more than 10,000 working families, delaying their death and permanent disability insurance payments from 2022 onwards.

There are two matters that concern me.

First, Labor’s amendments to weaken the Coalition’s super reforms will undermine any future regulatory actions against Cbus.

When Westpac was hit by a $1.3bn fine by Austrac, the Westpac shareholders paid.

In this case, Cbus shareholders such as the CFMEU will be able to weasel out of paying fines.

This was in fact designed by Labor in 2020 during the Covid crisis. On December 10, 2020, the Hayne royal commission bill passed the Senate, with the Labor opposition’s amendment to defer rules on liabilities and fines for super fund trustees to January 1, 2022.

The Supreme Court of NSW confirmed the Cbus Trust Deed amendments on December 20, 2021, and the amendments became effective on December 24.

The amendments would allow Cbus to charge members higher fees to establish a pool of capital available to pay fines.

In other businesses, directors are liable to pay these fines themselves for problems that occur under their leadership.

If ASIC is successful in the Federal Court against Cbus, the fines will be paid by the workers.

Despite CFMEU and other ­unions pulling millions of dollars out of Cbus each year, they will avoid any and all liabilities.

Secondly, the credibility of Swan’s evidence to the Senate has raised more questions than answers. In January 2022, Swan began as Cbus chair, and Labor’s amendments to defer rules on liabilities and fines for industry super fund trustees came into effect.

In February 2022, under Swan’s leadership, Cbus announced amendments to its trust deed. These changes enabled the trustee to levy a services fee from the fund. In other words, the members. This change was publicly disclosed in a media statement by Cbus at the time, outlining the rationale and details of the amendment.

During our Senate inquiry on November 29, 2024, when questioned about these trust deed changes, Swan stated: “No, it hasn’t done anything of the sort … We have reserves in our fund.”

This response may contradict both the earlier public statements and the documented trust deed amendments approved under Swan’s leadership.

Such discrepancies between public statements and Senate testimony raise important questions.

This matter warrants further examination to ensure transparency and accountability in the management of superannuation funds. It is also a slap in the face to those families whose insurance claims were delayed so egregiously that ASIC has intervened.

Swan also gave troubling evidence on Cbus’s payments to the CFMEU where he said: “We have partnership agreements with the CFMEU – I don’t have the total figure in front of me – which are subject to the BFID (Best Financial Interests Duty) test because they are highly commercial arrangements which deliver great benefit to the fund.”

Yet the independent Deloitte report said: “Despite this emphasis on partnership benefit, and calculation method, there are no metrics outlined in the partnership proposal as to how to assess what member outcome will be achieved for each specific expenditure (such as a reduction in fees). There is also no guidance provided as to how the matter should be monitored on an ongoing basis.”

There are clear rules where a witness can be in contempt of the Senate, including giving “any evidence … which the witness does not believe on reasonable grounds to be true or substantially true in every material particular”.

Giving false or misleading evidence to a Senate inquiry can result in a person being held in contempt of the Senate.

Again, Chalmers and Labor are silent despite the truckload of evidence. Imagine if the chair of Westpac had made clearly inconsistent claims at a Senate hearing or fiddled with the rules to avoid fines.

The real danger here is the ­nation is run purely for the benefit of a few vested interests and the national interest is long forgotten. We’ll all pay the price.

We need a government that will put Australia first.

Senator Andrew Bragg is the Coalition’s home ownership spokesman