The Australian Council of Trade Unions (ACTU) has called out financial services regulators for their failure to prevent the First Guardian Master Trust and Shield Master Trust collapses, following suggestions by Assistant Treasurer Daniel Mulino superannuation funds could be included in funding the increasing costs associated with the Compensation Scheme of Last Resort (CSLR).
The ACTU expressed its concerns Australian Prudential Regulation Authority (APRA) and Australian Securities and Investments Commission (ASIC) failures in this instance could cost working people their superannuation savings through an increase in mandatory levies applied to all super funds.
Currently, the majority of the CSLR levy is borne by the financial advice sector, with its levy estimates for the 2027 financial year increasing to $126.9 million from $67.3 million the previous financial year.
“APRA’s abrogation of its responsibility to regulate for-profit platform trustees has robbed workers of tens of thousands of dollars of their life savings and could now end up costing them even more. Working people should not have to pay for APRA and ASIC’s failures,” ACTU assistant secretary Joseph Mitchell said.
Citing APRA’s responsibility to provide oversight of the managers of product providers, the union body indicated the regulator failed to recognise and respond to the very visible and growing systemic risk of “predatory for-profit providers” encouraging people to put their superannuation into under-policed platform products.
“First Guardian and Shield’s collapses suggest that the regulator has been focusing on culture wars rather than monitoring and preventing the growing systemic risk to workers posed by unregulated self-managed super funds and for-profit platforms,” Mitchell claimed.
Further, the ACTU suggested the regulator should have more than enough resources to monitor this rising threat properly given its operational surplus reported in the last financial year.
“Instead, APRA has been focusing on hectoring profit-to-member industry super funds and attempting to de-legitimise the role of member and employer representation on high-performing super funds,” it stated.
