Sinodinos accuses union boss of industry fund bias

Responding to claims made by Australian Workers Union boss and AustralianSuper deputy chair Paul Howes in the Australian Financial Review – in which Mr Howes likened SMSFs to “mortgage-backed securities” in the US and claimed the sector was responsible for the housing boom – Senator Sinodinos told ifa there are likely ulterior motives at play.

“The real answer to Paul Howes is that people like him prefer the money to be tied up in the industry funds where people like [him] make decisions in the name of their members,” Mr Sinodinos said. “Well, we want a system where the members drive the change.”

The government’s proposal to have superannuation fund boards comply with independent governance requirements in line with ASX 200 companies will help weed out these links and conflicts of interest, the Assistant Treasurer said.

“We want people power in industry funds and other funds, we don’t want union power,” he said.

More broadly, the senator said the government – and Liberal Party – supported the SMSF sector’s “philosophy” of self-direction and personal responsibility, outlining the case against a compensation scheme for self-managed super investors.

“Our philosophical position is it’s a light-touch regulatory regime, and therefore people have responsibility for their financial decision-making and it’s not up to government to compensate them and potentially create a moral hazard, which encourages excessive risk taking,” he said.

A core aim of the upcoming Murray Inquiry will be to foster a “system of retirement incomes” that inspires stability and confidence, Mr Sinodinos said.