20 February 2017
Australia’s biggest employer- and union-backed industry superannuation funds have doused suggestions they donated millions to Labor-aligned union groups, after an analysis of election funding disclosures showed industry funds paid nearly $5 million to ALP-associated entities.
AustralianSuper, the country’s largest industry fund, said the more than $550,000 that the fund paid to unions including United Voice, the Australian Manufacturing Workers Union, the Media Entertainment and Arts Alliance and the AWU over the 2016 financial year were not donations but receipts for commercial payments for member engagement, such as paid advertisements in union magazines.
“AustralianSuper does not make donations to any organisations,” said the fund’s spokesman, Stephen McMahon.
“These are normal commercial payments for commercial services with the purpose of engaging with members. We undertake advertising and marketing activities with unions, employer associations and other commercial organisations to attract and retain members.’’
Analysis of the Australian Electoral Commission data, carried out by financial research group Rainmaker’s Financial Standard publication, alleged industry super funds “donated” more than $4.8m to unions and ALP-associated entities during the last financial year.
The AEC, which requires political parties and associated entities to disclose all receipts above a $13,000 threshold, distinguishes between “gifts and donations” and “other receipts”.
Unions must disclose receipts for commercial services from industry funds and other organisations. The Australian Prudential Regulation Authority has only recently started collecting advertising spend as part of its superannuation data collection. Super fund payments for advertisements in other media, such as television and newspapers, are understood to account for a much greater share of the sector’s advertising spend.
Hostplus, which looks after hospitality and tourism workers, was the biggest- spending industry fund, with a payment of more than $850,000 to United Voice. The fund did not respond to requests for comment.
The big four banks, which operate in the rival retail super fund sector, donated
$352,000 last financial year to the Coalition and $310,000 to the ALP. Westpac, Commonwealth Bank of Australia and NAB have since pledged to end the practice of donating to any political party.
Last financial year, the Construction Forestry Mining and Energy Union’s branches donated more than $1m to the ALP, while United Voice donated a combined $1.67m.
The government is trying to force not-for-profit funds to increase the number of independent directors on their boards, and last week Financial Services Minister Kelly O’Dwyer blasted a long-overdue report on fund governance by former Reserve Bank governor Bernie Fraser as a “shame” and a “lobbying document to kill off legislation”.
Ms O‘Dwyer said government reforms would ensure all super funds put the interests of members first, “ahead of their own interests or the interests of any other related entity, including unions”.
Construction and Buildings Union Superannuation, Cbus, made the second-largest payment during the prior financial year to ALP entities, with about $630,000 going to the CFMEU and the AMWU, among others.
A fund spokesman said it understood the potential for conflicts of interest and all payments were subject to an independent audit.