WEBVTT - Aussie fund’s super-sized problem

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<v Speaker 1>From the Australian. Here's what's on the front. I'm Christinamiot.

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<v Speaker 1>It's Thursday, November fourteenth. Top barristers say abolishing cross examination

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<v Speaker 1>of alleged rape victims prior to trial would tilt the

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<v Speaker 1>scales of justice against defendants. The landmark legislation proposed by

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<v Speaker 1>the Victorian government aims to prevent retraumatization of alleged victims,

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<v Speaker 1>but some silks say robust measures are already in place.

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<v Speaker 1>That exclusive story is live right now at The Australian

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<v Speaker 1>dot com dot AU. Australia's corporate watchdog says it also

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<v Speaker 1>avails superfunds after it was revealed one fund failed to

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<v Speaker 1>pay out death and disability benefits worth millions of dollars.

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<v Speaker 1>In today's episode, what's going on at c BUS and

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<v Speaker 1>why it could be a problem for the government.

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<v Speaker 2>I don't feel like my husband would all stay with

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<v Speaker 2>them if he had known this was going to happen.

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<v Speaker 1>This is Karen Redhead, a mom of three girls from Perth.

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<v Speaker 1>She's speaking with The Australian's reporter Mackenzie Scott. Because it

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<v Speaker 1>did feel to me like they were purposely denaying things.

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<v Speaker 3>I felt like it was making it excessively difficle and beso.

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<v Speaker 1>Karen's husband, Jamie Bell, a fire sprinkler fitter and the

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<v Speaker 1>family's breadwinner, died in twenty twenty two after a three

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<v Speaker 1>year battle with a rare form of cancer. And my

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<v Speaker 1>case looked simple because I was the executive of the will,

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<v Speaker 1>I was.

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<v Speaker 3>His only ever wife, the only e a mother of

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<v Speaker 3>his children, so it was like their most easiest case.

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<v Speaker 4>And I was also listed as a beneficiary on his

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<v Speaker 4>Seabuss account.

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<v Speaker 1>Sea Bus is an industry super fund with just under

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<v Speaker 1>a million members, working mostly in the building and construction sets.

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<v Speaker 3>How long would it take them to pay you out.

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<v Speaker 4>In the end, it was just over ten and a

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<v Speaker 4>half months after he died.

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<v Speaker 1>On Tuesday, it was revealed sea Bus has left thousands

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<v Speaker 1>of its members in the lurch. Many of them are

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<v Speaker 1>grieving families like Karens, or people with disabilities.

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<v Speaker 3>Oddly enough, a whole lot of admin winter dies. You

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<v Speaker 3>don't realize that there is these.

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<v Speaker 2>Was something I didn't think would be as hard, and

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<v Speaker 2>having extra things to deal with in that time is

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<v Speaker 2>really difficult.

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<v Speaker 3>It's a time when you really want.

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<v Speaker 2>Your life to be simple as possible, Like it's impossibly

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<v Speaker 2>hard and I don't think if anything, anyone could imagine.

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<v Speaker 1>The Australian Securities and Investments Commission, also known as ASSEK,

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<v Speaker 1>is taking sea Bus to the Federal Court over allegations

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<v Speaker 1>it failed to pay out thousands of death and disability

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<v Speaker 1>claims worth twenty million dollars for more than a year.

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<v Speaker 1>The regulator is also alleging sea Bus was aware of

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<v Speaker 1>the backlog but failed to take the necessary steps to

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<v Speaker 1>fix it. Plus, it says Seabus's trustee breached its legal

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<v Speaker 1>requirement to notify ask of the issue within thirty days

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<v Speaker 1>of it coming to light. That means some of the

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<v Speaker 1>country's most vulnerable people could still be waiting for their entitlements.

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<v Speaker 3>It's as bad, I think, as we've seen really, and

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<v Speaker 3>it's from a fund that's already in trouble on several fronts.

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<v Speaker 1>James Kirby is The Australian's Wealth Editor and the host

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<v Speaker 1>of the Money Puzzle podcast.

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<v Speaker 3>There are quite literally a string of regulatory issues now

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<v Speaker 3>emerging with Cebus. APRAA is also looking at what they

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<v Speaker 3>call questionable expenses I'm quoting those words. And they're also

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<v Speaker 3>looking at links for CFMBU. So there is a storm

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<v Speaker 3>basically of issues now swirling around SeaBus.

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<v Speaker 1>Last December, SeaBus filed what's called a each report to

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<v Speaker 1>ACIK after being pinned by the watchdog. In that report,

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<v Speaker 1>the superfund acclaimed its members were waiting on about twenty

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<v Speaker 1>million dollars in benefits, but Asak alleges, Sebus got it

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<v Speaker 1>wrong and the real figure could be up around a

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<v Speaker 1>billion dollars.

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<v Speaker 3>Well, we listened to the regulator. It's pretty carefully and

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<v Speaker 3>they don't often do this. But if a regulator actually

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<v Speaker 3>casts out on the estimate of how many people and

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<v Speaker 3>more importantly, how much money was due here and didn't

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<v Speaker 3>get sent out to people, then we'll take them seriously.

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<v Speaker 3>So we'd have to think that the amount in question

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<v Speaker 3>here is a lot more than we were given to

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<v Speaker 3>believe at the start by Cebus. Most people don't pay

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<v Speaker 3>attention really until they begin to worry about their money

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<v Speaker 3>in the fund. That's what people really care about. So

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<v Speaker 3>the issue with CBUS and this particular scandal is it

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<v Speaker 3>is to do with money. It's not so obscure issue

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<v Speaker 3>who are some political bon fight at this big superfund.

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<v Speaker 3>It's to do with money that people were old and

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<v Speaker 3>the period of time they had to wait for that

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<v Speaker 3>money and linked with this is that just recently, and

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<v Speaker 3>it's not a coincidence that on the money front are

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<v Speaker 3>the financial side of things. One of the big ratings group,

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<v Speaker 3>morning Star, recently downgraded the Cebus from average to below average,

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<v Speaker 3>and that's an embarrassment, I think for a top fund

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<v Speaker 3>like this, But it does tell us that the issues

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<v Speaker 3>at Cebus are now becoming financial.

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<v Speaker 1>Sebus apologized for the bungle, saying it was sorry for

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<v Speaker 1>the delay in processing claims made by bereaved families and

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<v Speaker 1>people with disabilities, and it says it's cooperating with the

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<v Speaker 1>regulator in hopes of resolving the dispute outside court. Plus

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<v Speaker 1>the ninety four million dollars super fun says it's put

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<v Speaker 1>mechanisms in place to clear the backlog of delayed payments

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<v Speaker 1>and pay compensation to its most severely affected members.

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<v Speaker 3>There is no way out now for Ceabus because though

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<v Speaker 3>they will say that they are cooperating, and if they are,

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<v Speaker 3>it will be a fresh start for them, because clearly

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<v Speaker 3>the ASIC people the regulators say that they weren't cooperating

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<v Speaker 3>up until now, and basically between the lines, what they're

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<v Speaker 3>saying is there was no good reason why this money

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<v Speaker 3>wasn't handed over to the people that would do the payments,

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<v Speaker 3>So that's a real issue for them. And I think

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<v Speaker 3>one of the outcomes of this story will be that

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<v Speaker 3>people are starting to realize, especially people in big funds,

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<v Speaker 3>that they're on their own, that the big funds are

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<v Speaker 3>something of a law to themselves, and when things go wrong,

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<v Speaker 3>they don't tell anyone of the things go wrong to

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<v Speaker 3>the extent that they inform the public. They just inform

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<v Speaker 3>the people who are affected. And that's not good enough

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<v Speaker 3>when you're talking about an industry that's now three point

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<v Speaker 3>five trillion. There's nine hundred and thirty thousand people alone

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<v Speaker 3>inside SUP. These are enormous, enormous funds, and once upon

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<v Speaker 3>a time they could get away with this sort of thing,

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<v Speaker 3>and I think now they're front and center that everybody

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<v Speaker 3>has to pay eleven and a half cents in every

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<v Speaker 3>dollar you make, by law, has to go into one

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<v Speaker 3>of these funds. It's just not good enough that there

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<v Speaker 3>isn't a regulator right on top of this. And one

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<v Speaker 3>of the problems is that the funds have become so big,

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<v Speaker 3>they're big fish in a small pond. There's different regulators

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<v Speaker 3>doing different things, and Basically it falls between the tracks

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<v Speaker 3>and that suits big funds just fine until it's sorted.

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<v Speaker 1>On Wednesday, Asik warned SeaBus might not be the only

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<v Speaker 1>superannuation fund mishandling members entitlements. The Watchdog's deputy chair Sarah Court,

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<v Speaker 1>said it's conducting deep dive surveillance of other super trustees

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<v Speaker 1>in light of the allegations against sea Bus.

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<v Speaker 3>She wouldn't say it on it, she had some evidence

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<v Speaker 3>from their earlier work that it is an industry wide problem.

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<v Speaker 3>If the system could allow see Bus not to pay

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<v Speaker 3>people the money that they would due they're own members,

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<v Speaker 3>then of course similar issues will lurk inside other fronts.

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<v Speaker 3>It's completely deductive that that would be the case.

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<v Speaker 1>Coming up. What Wayne Swan's Labor Maids think about this

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<v Speaker 1>brush with the Corporate Watchdog. Wayne Swan has been the

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<v Speaker 1>Labor Party's president since twenty eighteen. He's also the chairman

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<v Speaker 1>of the underfire superfund Sebus. He's been an outspoken critic

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<v Speaker 1>of badly behaved companies for much of his career in

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<v Speaker 1>politics and in the corporate world.

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<v Speaker 5>When companies are rarding the system, they give a green

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<v Speaker 5>light to everybody else to get in there and to

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<v Speaker 5>do the same now the business community in Australia cloised

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<v Speaker 5>group of honist tax paying corporate citizens. Many are, but

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<v Speaker 5>some are not.

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<v Speaker 1>When news of the SeaBus scandal broke, many of Swan's

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<v Speaker 1>Labor Caucus colleagues backed him in saying it wouldn't be

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<v Speaker 1>necessary for him to step down, but others suggested the

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<v Speaker 1>former Treasurer should appear in front of a Senate committee

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<v Speaker 1>to answer questions about how and why millions of dollars

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<v Speaker 1>in benefits were withheld from grieving families and people with disabilities.

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<v Speaker 1>Coalition Senator Andrew Bragg is chair of the Economics References

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<v Speaker 1>Committee and Deputy Chair of the Economics Legislative Committee. He

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<v Speaker 1>told The Australian he's open to it, saying Wayne Swan

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<v Speaker 1>has never shied away from a public debate. In the past,

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<v Speaker 1>Treasurer at Jim Chalmers, who counts Wayne Swan as a mentor,

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<v Speaker 1>has been reluctant to weigh in.

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<v Speaker 4>Now those allegations are before the courts now and the

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<v Speaker 4>standard practice which I'm apheering to today again is comment

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<v Speaker 4>on that before the course.

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<v Speaker 5>That would be an inappropriate thing to do.

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<v Speaker 4>But I'm a strong supporter of our regulators. Where they

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<v Speaker 4>find issues that concern them, they shoot test them, and

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<v Speaker 4>that's what's happening now.

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<v Speaker 1>Some have pointed out the contrast between Labour's dogged pursuit

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<v Speaker 1>of other corporations currently facing legal action for alleged misleading conduct,

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<v Speaker 1>like Colds and Woolworths.

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<v Speaker 2>Broadly, I think people feel that Wayne Swan has a

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<v Speaker 2>degree of distance from the situation itself.

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<v Speaker 1>Sarah Eisen is a political reporter with The Australian.

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<v Speaker 2>Often, chief executives are the ones who really handle operational

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<v Speaker 2>sorts of things and who are often held responsible, whereas

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<v Speaker 2>chairmen or chair women are a bit further removed. So

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<v Speaker 2>for that reason and for a few others, including that

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<v Speaker 2>members of the labor Caucus and the union movement have

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<v Speaker 2>felt satisfied with how the whole thing has been handled

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<v Speaker 2>so far that there hasn't been a huge amount of

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<v Speaker 2>appetite for Wayne Swan to step down, even temporarily while

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<v Speaker 2>the investigation by Assex into SeaBus takes place. However, there

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<v Speaker 2>have been a couple of voices who said it's not

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<v Speaker 2>even about it being Wayne Swan's fault, It's simply about distraction,

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<v Speaker 2>and distraction is the last thing Labour needs right now.

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<v Speaker 2>So that's why Wayne Swan, in the view of some

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<v Speaker 2>Labour people I've spoken to, should step aside temporarily to

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<v Speaker 2>avoid any chance of distraction just a few months out

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<v Speaker 2>from election and when Anthony Aberanezi is really struggling to

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<v Speaker 2>land the reset that he's really been trying to land

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<v Speaker 2>in recent weeks.

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<v Speaker 1>Sarah Eisen is a political reporter with The Australian and

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<v Speaker 1>James Kirby is our Wealth editor and the host of

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<v Speaker 1>the Money Puzzle podcast. Public sector pay has surpassed private

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<v Speaker 1>salaries for the first time since twenty twenty. That's according

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<v Speaker 1>to the latest Wage Price Index figures. You can read

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<v Speaker 1>our experts analysis right now at the Australian dot com

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<v Speaker 1>dot au