Legalised theft, avarice, Wild West lawlessness, price gouging, profiteering and secretive practices have been exposed by the Hayne royal commission as shockingly commonplace in Australia’s $620 billion retail superannuation industry.
There are flagrant breaches of the law – such as fees for no service or fees charged after a customer has died – yet the regulatory bodies, the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC), are nowhere to be seen.
Welcome to the vulture-ridden world of neoliberal capitalism.
As each day unfolded during the royal commission, the dark arts of money-making came under the laser sharp questioning of commissioner Hayne and counsel Michael Hodge.
Uncovering what the funds do when they are “alone in the dark with our money”, Hodge revealed a viper’s nest of illegal and corrupt practices, the only goal of which is to deliver profit to the administrators, boards, trustees and parent companies of the funds.
All the more galling were the responses of the industry representatives being questioned. Some words about reviewing practices and … nothing. Investments going backwards because of fee gouging at AMP, admissions that money would have been better invested in a bank account were offered with barely a hint of remorse. In the Catholic Super Fund covering teachers, the manager of investments employed his brother’s consultancy firm for $2 million – without disclosure.
As for the regulators, calling them toothless tigers would be a compliment.
APRA’s Helen Rowell admitted the Authority knew all along that the big banks, AMP and IOOF took fees they have no right to. But APRA launched only a single court case in the last decade.
Adding that APRA preferred “enforceable undertakings” to going to court, Rowell had to agree that the regulator had sought no such undertakings in that period.
Meanwhile, ASIC did a deal with ANZ and the Commonwealth Bank rather than take them to court for the billions of funds they picked up by “mis-selling” superannuation.
ASIC deputy Chair Peter Kell was reported as having “some welcome fire-in-the-belly” for saying he thinks the corporate regulator should do more to police the trustees of super funds and that they had “considered” briefing the Director of Public Prosecutions on criminal charges over the $1 billion plus fees-for-no-service scandal.
And we haven’t even started on the rest of the companies and the billions they hold in these funds. Nor should we forget the amount employers have stolen from workers by not paying into the superannuation funds at all – an estimated $17 billion over the past seven years.
It’s impossible not to be in a white-hot rage about the way these highway robbers have stolen money from workers day after day after day.
However, don’t hold your breath waiting for these thieves and charlatans – including their parliamentary allies – to be jailed, given a meaningful fine, or have their organisations deregistered. Michael Hodge has already signalled some soft-pedalling. “The very strong preference should be away from any form of legislative intervention in particular corporate structures”, the Financial Review reported him as saying.
What a contrast to the war on unions – the CFMMEU was recently fined $306,000 for one official entering one workplace and $822,000 for four other cases. Plus it was threatened with deregistration.
The retail super industry is, in the words of Guardian columnist Greg Jericho, a “stinking cesspit”. But the investigation into it was something the Coalition – with its bevy of lawyers, right wing acolytes and neoliberal champions – fought to prevent. After being pressured into calling the royal commission, government MPs consoled themselves with the prospect that industry or union funds would be hit hardest, only to see these funds largely exonerated.
They may have lost this round of the battle, but the ruling class will not let go of this $2.6 trillion industry, with its rivers of gold provided by our money, unless we force it to. Superannuation is a mug’s game for workers, enshrining inequality and condemning many to poverty. It’s time we shut down these funds and used the money for properly funded retirement incomes for all.