Super funds reject need for financial services inquiry

Sally PattenBOSS editor

Nov 28, 2017 – 10.00pm

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Superannuation funds say there is no need for a commission of inquiry into the sector because more than a dozen inquiries and reviews over the past decade have already led to substantial reform.

"While it's going to be a matter for the Parliament to decide, it isn't clear how a commission of Inquiry would add any more consumer value to the more than 18 major reviews and inquiries the financial services sector has faced since the global financial crisis," said Financial Services Council chief Sally Loane.

"There is no evidence of systematic cultural and ethical problems in the profit-to-member super sector. It would be a very expensive fishing exercise. This would not be prudent spending of taxpayer money," added Eva Scheerlinck, chief executive of the Australian Institute of Superannuation Trustees.

The recommendations of several earlier reviews and inquiries need to be implemented before another one is started, say superannuation industry executives. Sam Bennett

"I don't know what information [an official inquiry] could uncover that the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority can't get hold of," Ms Scheerlinck said.

David Whiteley of Industry Super Australia warned of the opportunity cost of conducing another super sector inquiry, arguing that the number of inquiries and reviews that had taken place over the past decade had acted as a distraction and had prevented retirement schemes from focusing on key issues.

"The past four years represented a lost opportunity in constructive policy-making. The government focus on fund governance and default super has meant insufficient focus on how to realise the potential of the $2 trillion pool of capital. Ideally, the government and super sector would have been exploring how to invest in infrastructure, agriculture, affordable housing and venture capital and how to drive economic and employment growth," Mr Whiteley said.

He said he doubted a commission of inquiry would consider super fund governance, where changes are included in legislation currently before the senate, or the arrangements around the distribution of default super, which are part of a Productivity Commission inquiry.

Ms Loane pointed to the raft of inquiries in the super and life insurance sectors currently in progress, including a parliamentary joint committee inquiry into life insurance, a three-stage Productivity Commission review of super, a PC inquiry into competition in the Australian financial system and a senate economics inquiry into consumer protection in financial services.

Previous inquiries have already resulted in a "massive" raft of reforms, she said.

"As well as these reforms, there are still a large number of recommendations that have not been implemented and need to be before another inquiry goes over old ground," Ms Loane said.

Sally Patten edits BOSS, and writes about workplace issues. She was the financial services editor and personal finance editor of the AFR, The Age and the Sydney Morning Herald. She edited business news for The Times of London. Connect with Sally on Twitter. Email Sally at spatten@afr.com