Super Funds advertising campaign in support of the resource super profits tax unlikely to be permitted by APRA
Fri, 11 Jun 2010
Following questioning at Budget Estimates by Senator David Bushby, Chairman of the Coalition Economics Committee, the Australian Prudential Regulation Authority (APRA) stated that any superannuation advertising campaigns supporting the Government’s resource super profits tax would be unlikely to meet the sole purpose test under which superannuation funds operate.
“There has been media speculation that some superannuation funds, particularly union backed industry funds, might run their own advertising campaign in support of Rudd Labor’s proposed job destroying RSPT,” Senator Bushby said.
“Indeed, senior Government sources quoted indicate the Government might be encouraging these funds to run such a campaign.”
In light of this, Senator Bushby asked APRA, which provides prudential regulation of the superannuation funds, whether they would consider the expending of members’ funds on such a campaign to be permissible. The answer was that they would find it hard to see how such a generic campaign would fall within the sole purpose test, strongly suggesting that such a campaign would not be permissible.
At the Budget hearing APRA executive general manager Keith Chapman said APRA would examine any new campaign for the purpose of deciding whether it was an appropriate use of members’ money but that “It would be hard to conclude that some sort of generic campaign would fit within the sole purpose of an individual fund”.
"The Government's mine tax has already hit super fund investments. It would be intolerable to see Labor linked union industry funds further damage the investments of their members," Senator Bushby said.
Senate Thursday, 3 June 2010
ECONOMICS
Senator BUSHBY—The reason I am asking will probably be fairly obvious at this point in time. On 27 May 2010, the Sydney Morning Herald had a page 1 article on the RSPT which amongst other things reported: A senior government source said the government would not mind if the super industry started running ads to counter the mining campaign.
‘‘It would be wrong to say we have leant on them. Equally it would be incorrect to say we are not discouraging them,’’ he said.
A super industry source said an ad campaign was not in the pipeline yet. ‘‘We’re certainly considering what steps we can take,’’ he said.
How can it be said that a political campaign paid for out of super funds’ moneys such as the one which the government is encouraging is in accordance with the statute which you would administer? Have you written to the funds advising them that this would be in breach of the SI(S) Act? Have you advised the senior government source that a campaign funded by the funds which are owned by super fund members would be in breach of the SIS Act?
Mr Chapman—…It would be hard to conclude that some sort of generic campaign would fit within the sole purpose of an individual fund. That is the best I can say.
… Those are all issues we look at as a matter of course when we are looking at how the fund is being used because the sole purpose test is a pretty fundamental cornerstone of the whole superannuation system.
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