Written by Cover Note editor Eva Wiland.
Federal financial services minister Kelly O’Dwyer has reacted angrily to Industry Super Australia’s (ISA) latest advertising campaign, calling it a union scare campaign.
At the centre of the ISA campaign is a 30-second TV commercial (TVC) which depicts the hand of a federal politician opening a hen house to waiting foxes, using the tagline “banks aren’t super”.
ISA said the TVC responded to banks’ attempts to secure “unfettered access” to Australia’s default super system for those who do not choose their own fund.
ISA CEO David Whiteley said: “The banks are quietly pressuring federal politicians to remove laws that protect Australians who save through workplace default funds.” Amending legislation to end the default super system (CN 24/03/16) lapsed last year before the double dissolution.
O’Dwyer said there was no government legislation before Parliament to change default super. FSC, which has long advocated removing default super (CN 22/04/15), would not comment on the campaign but CEO Sally Loane told CN O’Dwyer had found as many as 800,000 members were not entitled to choose their own super funds because of trade union enterprise agreements.
“Young Australians in particular want to be able to choose their super fund – they belong to the real world of digital options, competition and choice,” she said. “Unfortunately, thanks to Australia’s old-fashioned super system, which remains protected against competition and choice by industrial laws from a quarter of a century ago, many people are locked into underperforming, subscale union-controlled industry funds.”
Loane said Rice Warner Actuaries had found employees locked into subscale industry funds were likely to pay fees on super investments at 141 basis points, 28% higher than the average industry fee of 110bps.
(This story first ran in Cover Note 2001, 23 March 2017)
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