The Turnbull government will reintroduce a bill to force all superannuation funds to appoint an independent chair and fill a third of its board seats with independent directors, Kelly O’Dwyer has said.



The minister for revenue and financial services told a superannuation conference on Tuesday she would not wait any longer for a review of the non-profit superannuation industry led by Bernie Fraser, which was due to report in April.

But industry super representatives said they had repeatedly tried to meet O’Dwyer to discuss the review, without success, and responded angrily to her remarks on superannuation governance.

The Fraser review was commissioned last year by Industry Super Australia and the Australian Institute of Superannuation Trustees in a bid to fend off the changes to super boards.

“Almost 12 months ago, a bill to legislate higher standards of governance for the superannuation industry was deferred by the Senate pending the outcome of a review into governance arrangements in respect of not-for-profit superannuation funds and to propose a best practice governance code for such funds,” O’Dwyer said.



“This review, led by Bernie Fraser, was due to report in April. It seems that this review has disappeared into a black hole.

“We will reintroduce our bill to require trustee boards to have minimum of one third independent directors, including an independent chair.

“I look forward to hearing what became of the Fraser review.”

O’Dwyer’s comments angered officials from Industry Super Australia.

Peter Collins, the chairman of ISA and a former leader of the NSW Liberal party, said he and his colleagues had tried numerous times to set up a meeting between O’Dwyer and Fraser so she could see the review, but O’Dwyer was not interested. It was therefore disingenuous to claim the report had disappeared into a black hole.

He also ridiculed O’Dwyer’s claim that superannuation funds were not governed at the same standard as major banks and life insurance companies, which drew laughter from the audience.

“Are you serious?” one audience member said. “She’s got to be joking,” said another.

Collins told Guardian Australia her comments were laughable.

“The minister for superannuation is saying that she would like super fund governance to be the same as governance for the banks,” he said.

“If super funds had been responsible for systemic failures in financial advice, failure to pass on interest rate cuts, excessive executive remuneration and other forms of profit gouging by banks, there would have been a royal commission into super funds in a flash.

“It is abhorrent and unacceptable in the minds of most Australians that the standards for super funds should be the same as those tolerated for the banks.”

A spokesman for O’Dwyer told Guardian Australia she had not spoken to Fraser because his report was not a government report, and there was no reason to delay its release.

Unions and industry super funds last year seemed to win a fierce lobbying campaign when it convinced four independent senators (Nick Xenophon, Jacqui Lambie, Glenn Lazarus and John Madigan) to side with Labor and the Greens to block the government’s trustee governance bill.

They did so by promising to consider options for better self-regulation and to propose a code of conduct. But the review’s findings have not been made public.

They have accused the government of waging an ideological attack on industry super funds by trying to abolish their “equal representation” model under which half the board seats of industry super funds go to contributing employers and the other half to affiliated unions.

O’Dwyer’s one third independent director rule would radically restructure non-profit super boards.

“My question for you all today is, are you serious about lifting governance standards in this sector or do you want to cling to outdated practice which do no reflect the size, scale, nor the enormous importance of this industry,” she said on Tuesday.

David Whiteley, ISA’s chief executive, said he was disappointed O’Dwyer chose to make such a speech at a conference set up to discuss how super funds could use their huge pool of savings to invest in infrastructure and drive economic and productivity growth.

“The minister, unfortunately, has not addressed any of those issues and has instead given a deeply ideological speech,” he said.