It was revealed in the Senate Economics Legislation Committee today that the Turnbull Government has pressured the Australian Prudential Regulation Authority (APRA) to participate in the political debate over superannuation governance.
APRA Member Helen Rowell divulged that Assistant Treasurer Kelly O’Dwyer had urged her to lobby crossbench senators on superannuation trustee legislation.
A week after her inappropriate public intervention into the political debate, Mrs Rowell admitted that APRA advised Senators Wang and Muir, and staff in the office of Senators Day, Lambie and Lazarus, following a specific request from the Minister.
Senator KETTER: And can you tell us who you’ve been speaking with?
Mrs ROWELL: I participated in meetings with some of the crossbench senators.
Senator KETTER: In relation to the meetings with the crossbench senators, were those meetings occurring at the request of the crossbench senators, at your own instigation or at somebody else’s instigation?
Mrs ROWELL: APRA was asked by the Minister’s Office if we would make ourselves available to answer questions to anyone who wanted to ask questions or get clarification on aspects of the Bill.
The Turnbull Government should not be using APRA as a tool to argue its political case.
The behaviour of the Assistant Treasurer politicises APRA and risks bringing into question the independence of Australia’s financial regulator.
After questioning, Mrs Rowell further admitted the she did not have any quantitative evidence to support her assertion that independent directors provide higher returns for members.
Senator KETTER: Where’s the measurement of the benefit of that? What studies can you point to suggest that’s actually the case rather than your anecdotal evidence?
Mrs ROWELL: Governance is in some ways difficult to measure the outcomes of, and I think, whilst there are some studies that point to enhanced performance that can be attributed to independent directors, there’s also qualitative research that supports that view. From APRA’s perspective what is important is the quality and rigour of decision-making and the review that is applied to making decisions – whether it’s about arrangements with service providers, fees that are paid by members, or indeed, investment decisions. Again our view is that the breadth of skills and the quality of challenge that occurs when there are independent directors on boards is much greater and therefore that does lead to decisions which ultimately does have benefits for members. But it is very difficult to put any quantitative measure of those benefits.
From the beginning this has been an unnecessary and poorly-conceived ideological crusade against representative super boards from a government which has changed leaders but which hasn’t changed its ways.