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Issue No. 263 13 May 2005  
E D I T O R I A L

A Fistful of Dollars
And so the great political debate of our time has become who gets the money and how quickly they can pocket it – the Howard Government’s latest application of the base art of wedge politics.

F E A T U R E S

Interview: Fortress NSW
NSW IR Minister John Della Bosca on how to win the battle for workers rights - and save the state system.

Unions: Fashions Afield
With new anti-sweatshop creations being paraded at this year's Australian Fashion Week, is equity the new black and are sweatshops the new fur? asks Tara de Boehmler.

Industrial: Pay Dirt
John Burgess argues that the flow-on effect from changing the minimum wage could be more than we bargained for.

Politics: Infrastructure Blues
With much attention given belatedly to the shortage of infrastructure, little attention has been given to the structure of infrastructure, writes Evan Jones

History: Big Day Out
Neale Towart looks back on the events that created the May Day heritage.

International: Making History
Hundreds of aid organisations, charities, trade unions and religious groups have formed a global alliance called “ Make Poverty History”.

Economics: The Fear Factor
The solution to skill shortages is intelligent planning, argues John Spoehr

Review: The Robots Revolt
New kids flick Robot uses our electronic friends to teach audiences that inbuilt obsolescence is just a state of mind, writes Tara de Boehmler

Poetry: The Corporation's Power
The idea of a corporations power that could cure any ill has inspired our resident bard, David Peetz, to verse.

N E W S

 Bikies Needle Heroines

 Bosses Play China Card

 Giant Collapses on Ankle

 NAB Cuts More Than Jobs

 Left Footers Kick Back

 Oh Brother, Tim Plays House

 WA on the Block

 Patrick Fails to Hide Asbestos

 Budget Hits Civil Rights

 Combet Launches Shark Attack

 Childcare Wage Grows Up

 US To Drain More Aussie Brains

 Dictators Beg Eric To Stop

C O L U M N S

The Soapbox
May Spray
Unions NSW secretary John Robertson delivered the annual May Day Toast - and warned it is no time to be comfortable and relaxed.

The Locker Room
A Rucking Good Time
Phil Doyle reveals many things, some of them useful

Parliament
The Westie Wing
Our favourite MP, Ian West, is back to regale us with inside goss and intrigue from the Bearpit.

L E T T E R S
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News

Combet Launches Shark Attack


Financial planners should be banned from receiving commissions for pushing workers’ retirement savings into super funds, the ACTU says.

ACTU secretary Greg Comber says the commissions are a major threat to industry super funds, as they refuse to pay planners for bringing them in business.

"The ACTU is worried that when the new 'superannuation choice' laws take effect from after 1 July unscrupulous financial planners will move their clients super from one fund to another -- in processes known as mis-selling and churning -- to gain more commissions and fees," Combet says.

"Higher fees will eat into employees super accounts and ultimately leave them worse off when they retire.

"The Federal Government should move to prohibit commissions on super guarantee contributions. This will remove the incentive for unscrupulous financial planners and ensure super fund members know how and what they are paying for. "

The ACTU is concerned that the way the Government's superannuation choice system is being implemented is deeply flawed and believes that problems that need fixing include a poor fee disclosure regime and inducement for employers to shift funds to a retail fund.

Current rules mean super funds only need to disclose the first year of fees. This will lead to "honeymoon rates" like those that credit card companies advertise. We all know that in the long-term customers ending up paying more. It is ridiculous that a 40 year investment can be sold on the basis of a one-year honeymoon rate. Instead there should be a requirement for clear fee disclosure. All super funds should disclose their fees over a minimum five-year period and explain the effect of fees over the long term.

Inducements for employers. In effect the choice legislation will be choice for employers not employees, with banks and financial planners able to offer employers inducements such as payroll or advice services to make their fund the default fund for employees. Also, employers may be offered reduced interest on their business loans or better credit arrangements & APRA will have difficulty regulating these practices even though offering such inducements is not lawful.

Combet says one solution is to properly resource APRA to monitor the commercial relationships between banks, financial planners and the small minority of unscrupulous employers who might use their employees super as leverage to lower their own business banking costs.

"Lack of knowledge among many workers will prevent people from making an informed choice," he says. "Many will be driven by what the default fund is at their workplace or perhaps rely on advice from their financial planner or accountant whose advice may then be driven by which fund pays the highest commission.

"The Government should invest in a long-term education campaign directed at super fund members. The current proposals are insufficient with the Taskforce established to run the education campaign estimating it will take ten years to get through to most people.

"The main goal must be to ensure that working Australians have access to low cost superannuation that enables them to retire with dignity and in comfort rather than be forced to work until they drop.

"Unions are proud of the fact they worked with the Labor Government to introduce universal superannuation in 1985. At that time only 39% of employees had super, now 97% of the workforce has super."


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