It's my money mate: Superannuation.

Breaking the Union-Big business partnership. Stop compulsion.

It’s time for me to dive in and say what no one in Australia seems prepared to say; Australia’s compulsory superannuation system should be abolished.

(Phew! I’ve been wanting to put that into print for ages!)

What should happen instead is that the compulsory employer contributions (currently 11.5 percent of employees’ incomes) should be paid directly to workers. It’s their money. And workers, that’s ‘us’ by the way; should be allowed to decide what we want to do with our money.

The tax advantages of super should be retained which would keep tax advantages as the primary motivation for people to put money into superannuation. That makes sense.

However frankly I see the compulsory side of superannuation as ‘evil.’ Okay I’m being emotive. But the Australian superannuation system, hinged around compulsion is designed to give control of Australian workers retirement savings to cliques of networked, powerful individuals. I see that as ‘evil.’ And it’s all to do with the tie-in to the industrial relations system and the broad labour movement who are now the ‘Establishment’ running Australia. I first discussed this in January 2023 The Socialists’ Capture of Capitalism.

Let me explain my reasoning in more detail.

Superannuation = monopoly control of workers savings

Australia’s superannuation laws are perhaps most generally viewed as financial laws that regulate the management of workers’ savings. But in reality the laws are a key lynchpin to the Australian industrial relations system, a system that cements a big business–union partnership against the interests of workers. I know that it’s counter-intuitive to look at the system this way! But let me continue.

The truth about the superannuation system is that major parts of it monopolise control of Australian workers’ savings by delivering financial control into the hands of very small numbers of elite, powerful people. Those parts deny workers access to, and control of, their own money.

The area of greatest control and centralisation of workers’ money is the Industry Superannuation funds. These funds control over $1.4 trillion of workers’ money. Rather than unions and bosses being in constant ‘war’, the system has created a financial partnership between unions and big business associations. That is the legislation governing the Industry funds stipulates that the ‘controllers’ of the funds, the trustees, are union and employer association representatives.

This legislatively mandated partnership delivers to unions and big business associations (but not to the workers) high levels of control of Australian workers’ financial assets.

Effectively unions (who would ordinarily be thought of and claim to be socialist/communist/Marxists to some degree at least) have become the most powerful capitalists in Australian society in partnership with big business. They are the most powerful because they don’t have imposed on them the levels of transparency and accountability that other capitalists in Australian society have imposed on them.

Some basic facts

The total superannuation system now controls more than $4.1 trillion of workers’ assets (Jan 2025). This is split into several types of funds as shown in this table. Compare this to Australia’s four dominant banks which combined have $A3.8 trillion in assets

The self-managed super funds (funds with less than 7 members) are the only funds where individual workers actually control their own money.

In all the other funds individual workers cannot control their own money. The only ‘control’ they have is to choose into which fund their money goes. That’s the nature of the compulsion.

The area of greatest control and centralisation of workers’ money under the system is the Industry Superannuation funds. You can see that just 21 Industry funds control more than $1.4 trillion of workers’ money. And those funds are highly networked within closed interrelationship loops. I discuss this below.

Compare this to other parts of the superannuation system where control of money is highly diversified through more than 632,000 separate self-managed funds containing a little over $1 trillion in assets. And over $1.5 trillion is contained in 91 funds. These 91 funds are diverse in their structures and operations and have no inter-relationships and networks of control of the likes of the Industry funds.

Industry Superannuation Funds - some detail

As explained above, the Industry funds are controlled by a partnership of unions and big business associations. That is, big business and unions are in a partnership where they control the workers’ savings.

This simple fact explodes the myth that the industrial relations system is ‘war’ between workers and bosses. It is not. The industrial relations system should instead be seen as a formalised, legalised, collusive combine of big business with big unions working together to control Australian workers.

A simple question has to be put: How in the world can unions be trusted to fight for the interests of workers when the unions are in a financial partnership with big business? This must be an open door to collusion between big business and unions. In my view this is ‘corruption’ but it’s ‘corruption’ enabled even facilitated by the law.

This problem with the Industry funds goes much deeper when details of the Industry funds’ operations are understood.

In 2009–10 the then Labor government held a review into Australia’s superannuation system (The Cooper Review). The Institute of Public Affairs submitted a lengthy report and submission, Keeping Super Safe. The report exposed disturbing things about how the system operates. At the core of the report was the finding that the superannuation system operated on secrecy. That is, the levels of disclosure about how workers’ money was managed and by whom was effectively non-existent.

The report found in relation to the Industry funds;

• A massive concentration of money in the hands of a small number of funds.

• The funds channel the control of the money to centralised money managers. This creates an effective ‘monopoly’ of sorts over control of the workers’ money. Who actually controls the workers’ money is lost in complex corporate structural webs. There is no effective disclosure of who controls what. Disclosure is not required at law.

• Of the three major audit companies auditing the funds, two of the audit companies were owned by the funds. In other words, the funds were auditing themselves. The only independent auditor was on the record expressing concern about non-disclosure.

• Industry funds are controlled by a very small number of individuals. The report identified at the time that just twelve people dominated the trustee positions across a network of some of the biggest Industry superannuation funds.

The report stated (page 5):

• “The poor disclosure means that Australians who have their retirement funds tied up in superannuation funds do not have access to information necessary to understand where their money is invested and what expenses are being paid from their superannuation savings.”

• “There is strong international and domestic evidence to show that superannuation funds and/or trust arrangements can be subject to abuse.”

• “Particular attention must be paid to situations where financial power is concentrated. Safeguards must be inbuilt to minimise the ability of well-connected political players to manipulate the system to favour particular investment funds, managers or individuals.”

• “This report calls for new laws that will force Australian Prudential Regulation Authority (APRA) regulated superannuation funds to comply with extremely high standards of disclosure and transparency.”

In short, the Industry superannuation funds, in particular, are run on the grounds of secrecy. There’s a simple rule. Where secrecy exists, expect corruption!

The Cooper Review Preliminary Report (December 2009) called for major changes to the laws to require transparency and disclosure. It stated:

• The Panel is also concerned that superannuation fund trustees are not sufficiently accountable to members.

• The Panel views disclosure as one important way in which trustees can be made accountable to members: that is, specific information must be given to members. (6.6)

• The Panel is attracted to the general proposition that governance of APRA‐regulated super funds should be equivalent to the standard applying to a listed company (6.1)

• The Panel endorses the development of a methodology that will provide consistent and meaningful information to members on the trustee’s investment performance for universal members and choice members. (6.5)

That is, the Cooper Review called for major changes to the law to require and force superannuation funds to have imposed on them high levels of disclosure. The specific levels of disclosure and accountability to be required were of the same level as those required of listed companies.

Some 25 years after the Cooper Report, effectively nothing has changed in this respect. Any ‘reforms’ are at the margins, consist of window-dressing and give the impression of ‘doing something’ without actually doing anything.

And what we are starting to now see is evidence of the results of a ‘legalised corrupt’ system (my view). Reports of misuse and bad governance of members funds are now coming to public attention. That such bad governance of the funds is occurring should not be a surprise. Bad governance is a direct result of bad legislation and a bad or corrupt political process that created and supports the bad legislation.

Dump the system

In conclusion I reiterate that the compulsory superannuation system should be abolished. If the current funds are doing such a brilliant job, as they claim, then what have they to fear from ‘the people’ having control over their own money!

If you’re interested in my other writings you’ll find them under the following groups

Modern Marxism Articles, posts looking at my deep study into the operations of marxists active in the Australian political and social scene.

Aust Work Issues : My study/commentary on the ‘revolutionary new labour laws of 2022-2024. Plus the strange happenings with the radical construction union the CFMEU.

ATO Reform : I describe the urgent need to reform the Australian Taxation Office

All Articles/Posts;