Industry Super Holding’s ownership of The New Daily does not contravene the sole purpose test governing superannuation funds, the financial regulator has confirmed.
APRA deputy chair Helen Rowell told Senate estimates on Thursday that “there is nothing in the information that we have to date that suggests that there any issues for us to pursue in [relation to The New Daily]“.
“It’s important to distinguish between the original establishment of The New Daily and the current arrangements. We looked at the original arrangements in relation to The New Daily at the time, and did not identify any prudential concerns,” Ms Rowell said.
“More recently, we’ve looked at the current arrangements, and how they’re structured and what’s involved in them, and again, we have not identified anything that suggests that there is a problem.”
Senator Bragg, a former policy adviser for the Financial Services Council, the peak lobby group for bank-owned and for-profit super funds, said he was confused by this explanation, as he did not understand how TND could deliver returns to members.
The sole purpose test requires super fund trustees to only make decisions in the best retirement interests of their members.
“So there’s no problem with super funds spending, according to The Telegraph, $28 million on a news organisation?” Senator Bragg asked.
Ms Rowell replied: “In principle, there is nothing in the legislation that would in and of itself prohibit that.”
Senator Bragg continued to press the deputy chair. “Ok, so they can set up a propaganda outfit under the sole purpose test?” he asked.
Ms Rowell responded: “I wouldn’t characterise it that way, Senator.”
Ms Rowell said the investment over which APRA had oversight was the super funds’ investment in Industry Super Holdings, “which has a number of components, one of which is The New Daily“.
Her colleague, Adrian Rees, said “the investment in ISH itself, as far as we have been able to ascertain, is within the normal range of investments that superannuation funds make”.
“What the downstream organisations within such companies do, is a matter for those companies and those shareholders to determine,” Mr Rees said.
“There are probably some analogies you can think about: Superannuation funds own shares in a number of different sorts of organisations.
“That doesn’t mean that the activities of those organisations themselves are subject to the sole purpose test … I’m not sure that we have any further regulatory reach into that matter.”
Ms Rowell said APRA was conducting a broader review of the advertising and sponsorship arrangements of superannuation funding.
Mr Rees confirmed to Senator Bragg that the review was scrutinising the Industry Super Australia campaign involving ISA chair Greg Combet.
Launched last year, the campaign claimed the investments of industry superannuation funds would create some 200,000 jobs by 2023.
Senator Bragg has described such campaigns – the latest of which was released to coincide with the beginning of this year’s AFL season – as “vanity advertising” that is an affront to the purpose of superannuation.
But Industry Super Australia said such advertising was a cost-effective way for funds to attract and retain members while also explaining to them how government policy would affect their retirement savings.
APRA said it would publish a summary of its review upon completion, and publicly disclose whether it takes any enforcement actions related to its findings.
The New Daily is owned by Industry Super Holdings