The 2020 budget will end the practice of super funds spending your money on themselves thanks to the “your future, your super” package.   

The super funds are against you having early access to your super, but they’ve had early access to your super for years. They spend your money on political donations, propaganda newspapers and pointless, vain advertising.  

They are very defensive about all this because they pretend to work in the national interest.  

The unions and banks are desperately trying to protect these rivers of gold.  

Yet they are not supposed to plunder your super. There is a special law for super funds which you could drive a truck through. It is called the “Sole Purpose Test”. 

The Sole Purpose Test specifically says members’ money may only be used to provide them with benefits upon their retirement.  

The Australian Prudential Regulatory Authority (APRA) is the super regulator and is supposed to monitor this stuff. They are asleep at the wheel.   

They have never brought an action against a fund for wasting your money. APRA even lets union bosses stay on super boards for 27 years when the limit is 12 years 

Accordingly, we will strengthen the test, to “put beyond doubt that trustees must act in the best financial interests of members.”  

Getting APRA to enforce the law will be an important step.  

Historically, the best APRA has come up with on enforcing the sole purpose test is: “In circumstances where a (super fund) expends or invests members’ money in good faith, and can point to analysis that supports the outcome the expenditure or investment is expected to provide and its connection to superannuation purposes, the (Super fund’s) action is unlikely to breach the sole purpose test.” 

The new test will reverse the onus and trustees must “establish that there was a reasonable basis to support their actions being consistent with members’ best financial interests.” 

As I wrote in my book, Bad Egg: How To Fix Super, super funds are powerful – they are on track to be the biggest political donors in Australia.  

In fact, political payments from super funds to trade unions hit $13 million this year alone on the way to $30 million in 2030. 

So where is this money wasted? There are at least two examples.  

Firstly, there is a hilarious propaganda project called The New Daily, an online newspaper.  

The super funds seeded this “newspaper” with $12 million in 2013. The money is now gone and is being secretly recapitalised by the super funds. They won’t tell parliament how much more has been wasted. 

The New Daily was proposed as a venture which would have a “slight tilt toward using industry super spokespeople for quotes”.  

At best, the newspaper is a monumentally expensive exercise in self-marketing. At worst, it is a platform to push its own interests under the guise of objective reporting.  

The claim on The New Daily’s website that it “will not have a policy position on issues” is absolutely farcical.  

How can funding a loss making and biased newspaper help workers have more money in retirement?  

Secondly, there is a giant advertising spend.  

Fifteen super funds have admitted to the Parliament that as a group they’ll spend at least $1 billion on advertising over 10 years.  

In 2019 they spent $96.9 million on advertising, in 2020, they will crack $100 million. 

That explains why the only adverts you see during the footy are from the super funds. 

But at least these are adverts for products that people can actually invest in.   

Perhaps the worst of all this absurd expenditure is the $40 million spent by the lobbyists Industry Super Australia spruiking themselves over the past year.  

You see these ads during the footy too.  

Former Labor minister and union boss Greg Combet bobbing up telling you “how good is super” really highlights the waste.   

That’s because Combet is not even selling a product.  

He is just selling propaganda about a system that doesn’t even work.  

Super doesn’t get many people off the pension and it costs the budget more than it saves. It hasn’t worked well. But he’ll tell you, it is great.  

Combet has used $40 million of your money in the past year on turgid propaganda according to Neilson.   

And since we’re talking footy, do you want to see who’s top of the table? 

Over the past five years Hostplus takes the minor premiership having reported spending of $99.3 million dollars of members’ money. 

The runner-up is CBUS, with reported spending of $93.7 million of members’ money.  

Third, but not by far, is Australian Super, with reported spending of $90.3 million of members’ money.  

How is expenditure on marketing and advertising on this scale revealed by these disclosures consistent with the ‘sole purpose test’?  

Historically, funds have not been required to disclose this expenditure to members or to explain what benefits members obtained from the expenditure. 

This will now change. Trustees will have to show how expenditure benefits members.  

The “your super, your future” package is amongst the most important structural reforms our government is undertaking. It will make a big difference.  

Andrew Bragg is a Liberal Senator for New South Wales. His book, Bad Egg: How to Fix Super, is available from Connor Court. 

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