Bragg blasts government for alleged super fund favouritism

Senator Andrew Bragg has intensified his assault on Labor and Cbus, claiming the Labor government is “obsessed with trying to help their mates with the big super funds”.

In a recent episode of the In Focus podcast by Super Review's sister brand The Adviser, Liberal senator Andrew Bragg slammed Labor for pursuing a “warped agenda” that he claims favours superannuation funds and foreign fund managers over the Australian public.

“The Labor government is obsessed with trying to help their mates with the big super funds and their housing solutions are around institutions providing build-to-rent stock, for example, financed by foreign fund managers.

“They have a bill in Parliament to cut taxes for foreign fund managers and then they try to help Cbus and these sort of funds build houses,” Bragg told In Focus a day after he tabled a bill in the Senate to amend the Housing Australia Future Fund (HAFF) Act to prohibit Cbus’ involvement in the initiative.

Expanding on his earlier remarks during the podcast, the senator stated that the Liberal Party has concluded Cbus is not an appropriate business for the Commonwealth government to engage with.

Bragg’s reasoning focuses on Cbus’ purportedly close ties with the Construction, Forestry and Maritime Employees Union (CFMEU), which was forced into administration on Friday, just days after Parliament enacted legislation permitting a government takeover of the union for at least three years.

Specifically, Bragg alleges that three of the 14 directors of Cbus Super are CFMEU officials. Cbus has denied this, stating that only one director is a CFMEU official and that the other two were merely nominated by the union. However, Super Review understands that the other two directors were CFMEU officials until recently.

While recent weeks have mostly centred on the CFMEU, Bragg redirected attention to Cbus on Wednesday, levelling serious allegations that the fund and the union “are locking young people out of the Australian Dream”.

“We don’t think that the CFMEU is helping housing,” he said.

On Thursday, Bragg accused Labor of “running a protection racket for the CFMEU/Cbus cartel in the Senate” after the bill he introduced was denied an inquiry.

“This highly unusual development reveals Labor wants to wish the CFMEU issues away,” Bragg said.

“Labor’s move to renege was made known to senators within two minutes of a vote. Overnight, Labor decided it would prevent any scrutiny into the CFMEU/Cbus cartel.”

The bill, according to its explanatory memorandum, inserts an additional limitation in the HAFF’s governing legislation to prohibit investments into potential housing-related projects that Cbus has or will invest in.

“Cbus’ formal and legal affiliation with the CFMEU has made it an untenable party with which to do government business,” the memorandum reads.

“Allowing Cbus and its affiliate union, the CFMEU, to participate in the HAFF further risks the integrity of taxpayer funds.”

Cbus has strongly denied Bragg’s claims, noting in a statement last week that any suggestion that a super fund would be the recipient of funds via the HAFF is “wrong”.

“A super fund is not involved in the design, construction, or approval of any of these projects,” Cbus Super chief investment officer Brett Chatfield said.

“Once the settings are right and agreed upon, a super fund would be the provider of debt funding to the relevant party, such as a community housing provider, rather than the recipient of HAFF project funding.”

In November 2022, the super fund announced it has committed to investing up to $500 million over five years to support the construction of new social and affordable homes, made through the HAFF as part of the government’s National Housing Accord.

Earlier this year, CareSuper, Hostplus, Rest, IFM Investors, and Cbus stated they were seeking to collectively partner with community housing providers to support an initial investment in social and affordable housing through the HAFF.

Chatfield compared Bragg’s bill proposal to prohibiting a super fund from purchasing Australian government bonds.

“Like many other investors, Cbus invests in meeting the challenge of housing our nation where it stacks up for our members,” he said.

“Our sole focus is on delivering the best possible financial returns for our members, as we have done for the last 40 years as a top-performing super fund.”

Bragg slams Labor’s housing policies

Bragg went on to blast the Labor Party’s housing policies, highlighting their Help to Buy scheme and their build-to-rent tax concessions, the latter of which he said risks allowing foreign fund managers like BlackRock and Vanguard to control Australian housing.

“They’ve had the help to buy scheme where the government owns 40 per cent of your house. That was the centrepiece of their last election campaign launch. They haven’t even brought that bill into Parliament for debate or for a vote. They’re obviously ashamed of that policy,” Bragg said.

“Secondly, they’ve got the housing targets which we just discussed have failed. Thirdly, they’ve got the Housing Australia Future Fund which is a multibillion-dollar boondoggle fund which has built no houses. And then they’ve got their, I would say, their worst policy, their build-to-rent tax concessions, which is about getting foreign fund managers to build and own Australian housing.

“So, an Americanisation of our housing stock. I mean, I don’t think that having BlackRock and Vanguard own our houses is a good idea.”

When asked why he viewed the involvement of some of the world’s largest asset managers in rebuilding Australia’s housing stock as problematic, Bragg simply replied: “I want people to own houses.”

Last week, the Senate opened a new inquiry into the financial regulatory framework and home ownership to explore ways to reduce lending costs and improve accessibility for first home buyers.

Bragg told In Focus that the inquiry is necessary given the increasing difficulty for Australians to service mortgages and save enough money for a typical deposit.