Big bucks mean big responsibilities

“If you look at the findings of the banking royal commission and this review you see that APRA has been asleep at the wheel. Leadership and culture have been identified as a problem and they are set at the very top,” Senator Patrick said.

“You can’t earn $886,000 [as Mr Byres does] and not be fully responsible for leadership, transparency and contestability,” Senator Patrick told The New Daily. 

“It’s not proper for him to stay in that role. Ultimately, the buck must stop with someone.”

Senator Patrick also called for Mr Byres’ deputies, Helen Rowell and John Lonsdale, to be called to account.

“I am also of the view that the deputy chairs, both earning $709,000 per annum, should also consider their ongoing tenure,” Senator Patrick said. 

“For far too long, there has been a great reluctance for senior officials in the public sector to accept personal responsibility for the failures of performance and governance by, or within, their organisations.” 

The review found: “APRA should take a more transparent and assertive role in articulating the objectives of its macro-prudential policies”.

“Despite an increasing focus on member outcomes, APRA’s progress has been insufficient, especially in relation to system efficiency, fees and transparency.”

Call for a new superannuation division

The review called for the creation of a new superannuation division and said to date APRA had let the $2 trillion superannuation sector “take a back seat” to the $4.1 trillion banking sector.

“APRA has not sufficiently acknowledged that differences in the superannuation industry require a different approach to supervision” that “may have led it to under-resource its oversight”, the review found.

Ms Rowell currently heads up the regulator’s superannuation efforts, and it is not clear whether she is in line to lead the new division.

Super levies to increase

Mr Byres told a media conference on Wednesday that an increased focus on super could lead to higher costs for the industry.

“It’s a user-pay system, so if there’s more resources to any particular area, any particular industry, that would be reflected in levies.”

Industry Super Australia acting CEO Matthew Linden supported the review’s recommendations.

“This review has exposed a culture of under-reporting, poor regulation and enforcement and a failure to adequately protect consumers from exploitation and misconduct,” he said.

“It confirms what the royal commission already told us – that consumers have not only been let down by the institutions that perpetrated the misconduct, they have ultimately been let down by the regulator,” Mr Linden said.

Treasurer Josh Frydenberg said the government would support the review’s findings and said it was critical the superannuation sector had the highest levels of governance, transparency and accountability to ensure confidence in the system.

“What we must be sure of is that our regulators are focused unequivocally on ensuring the best possible member outcomes,” Mr Frydenberg said.

The New Daily is owned by Industry Super Holdings