In legislation passed by the Parliament today Bill Shorten has sought to protect the vested commercial interests of the union movement at the expense of the public interest.
Instead of putting the interests of one segment of the financial services sector first, he should have put the interests of Australians disengaged from their superannuation arrangements first.
Today’s passage of the Fair Work Amendment Bill provides a process for the selection of default funds in modern awards, which remains anti-competitive, conflicted and which inappropriately favours union dominated industry super funds.
Labor has a very bad track record on this.
Julia Gillard as the then Minister put in place the current widely discredited closed shop and anti-competitive process by which default funds in modern awards are selected through Fair Work Australia.
Even Labor had to finally recognise in the lead-up to the 2010 election that the process to select default funds under modern awards lacked credibility and promised to replace it with a more open, transparent and competitive process.
Bill Shorten has been very unenthusiastic about dealing with this.
First he was very slow to act and now the legislation he has delivered falls way short of the promise of an open, transparent and competitive process for the selection of default funds under modern awards.
Instead of ensuring genuine competition, the government’s process will impose an additional layer of red tape and government intervention in the default fund market.
It is a continuation of a process where conflicted parties within Fair Work Australia will select default super funds under modern awards.
Genuine competition in the default fund market is critically important to ensure efficiencies and value for Australians in default super are maximised.
The government is currently also legislating to enshrine all the consumer protection requirements it judges are important for Australians who do not make active choices about their own super arrangements through their MySuper Bills.
Given that is happening, surely any MySuper product should be adequate as a default product by virtue of its registration as a default product and be able to compete freely in the default fund market.
There is absolutely no reason why every product which qualifies as a MySuper product should not be able to compete freely in the default fund market.
The Coalition moved amendments today to enshrine genuine competition in the default fund market, which in our judgement is in the public interest.
Given those amendments failed today, if we are elected to govern at the next election we will revisit this and ensure that all Australians are able to benefit from genuine competition and less red tape in the default fund market.