Josh Frydenberg’s office intervened in superannuation consultation paper, FOI documents reveal
Josh Frydenberg’s office intervened in the drafting of a consultation paper to make sure it linked proxy advisers to the issue of compulsory superannuation, a key battleground in the political war over retirement savings, internal Treasury documents show.
The documents, released to Guardian Australia under freedom of information laws, also reveal the paper was developed in just one week.
Frydenberg proposed restrictions on the operation of proxy advisers – who give advice to institutional shareholders on how to vote at company meetings – in a press release issued on the night of Friday 30 April.
He proposed forcing advisers to give their reports to the companies they were analysing five days before they gave them to their clients, which advisers suggest would breach existing rules designed to curb insider trading.
Proxy advisers provide advice to investors, including superannuation funds, on how to vote on resolutions covering the appointment of directors, executive pay and environmental, social and corporate governance issues. However, their clients make the final decision.
The treasurer also proposed a requirement that super funds be independent from their advisers – a move that could force the Australian Council of Superannuation Investors, which gives advice to its super fund members, to disband.
Industry funds fear such a move could force each fund to separately pay for advice from proxy advisers, and potentially result in higher fees.
The proposals have previously been described by the industry as a “Trumpian brainfart”.
Industry funds are jointly controlled by unions and employers and make profits only for members, unlike for-profit retail funds.
They have been repeatedly attacked by elements within the Liberal party, including backbench senator Andrew Bragg.
Treasury emails show the process of drafting the proxy adviser consultation paper began on Friday 23 April – exactly one week before it was released.
A “skeleton” of the paper was circulated within Treasury for comment in an email sent by an analyst in the business conduct unit at 9.53am.
At 11.45am, Tom Dickson, who heads the corporations branch within Treasury’s market conduct division, responded: “Will the part on super cover off on the dynamic between compulsory Super and proxy advice as per TO [Treasurer’s office] request?”
Dickson initially denied Guardian Australia access to the documents, claiming that providing them “would impede our ability to provide confidential and complete advice and recommendations to the minister”.
Their release was not in the public interest because of “the importance of protecting the confidential deliberative processes of providing advice on matters of significance and sensitivity as one of the Treasury’s core advisory functions,” he said in a 15 June FoI decision.
But Dickson’s decision was overturned on Friday by Treasury executive Meghan Quinn.
The message from Frydenberg’s office about including compulsory super in the paper was reinforced to Treasury staff in an email sent by an official, whose name has been redacted, at 1.01pm on Friday 23 April.
“Tom wanted me to add that a key message the Office wants drawn out is the engagement of peoples’ [sic] compulsory super contributions with the proxy advice sector,” the official said in the email. “I’m sure the compulsory nature of super features in a lot of your materials.”
The final paper includes a line stating that “Australians currently have at least 9.5% of their salary contributed towards their retirement and they should have confidence that trustees are acting to maximise their retirement savings, including when trustees exercise voting rights and in interactions with listed companies”.
However, another line claiming that there was “an increasing influence of superannuation funds on Australian companies” was deleted during the editing process, the FoI documents show.
Frydenberg’s office did not respond to questions put by Guardian Australia.