"There are currently $2 billion in Workers Entitlement Funds. Just imagine how much higher this amount would be if the investment earnings had not been regularly siphoned off over the past 20 years.
"Industry superannuation funds were jointly established by unions and employer associations, but who would accept the nonsense idea in a comparable analogy that the investment earnings on superannuation contributions made by employers for the benefit of their employees belong to unions and employer associations? No one would, of course, and rightly so. Over the past 20 years, superannuation fund members have received considerable benefits from the investment returns on their employers’ superannuation contributions. Why shouldn’t members of Worker Entitlement Funds receive similar benefits?
"16 years ago the Cole Royal Commission recommended that Worker Entitlement Funds be regulated but unfortunately the recommendation was not acted upon at the time. The Funds were much smaller in those days and the issue was not regarded as a priority by Government. In his final report, Commissioner Cole highlighted the flaws in the arguments that investment earnings are 'surplus'. He said:
"Those administering the funds appear to have lost sight of the fundamental premise that employer contributions are to fund redundancy entitlements. It follows that contributions, and returns on investments of the fund, should be held by the fund and distributed only for the purpose of paying redundancy entitlements.
"If funds were used only for the purposes for which they were established, contributions could be reduced – thus reducing building costs – or benefits to employees could be increased.”
"The investment earnings on Worker Benefits Funds, like the Protect redundancy fund, belong to the workers – not to the unions and employer associations that set up these funds. It is appalling that millions of dollars of these earnings are being siphoned off as so called 'surpluses'.
"Also, not all Fund members are members of a union, and unions don’t provide services to non-members, so money transferred to unions is obviously not going to spent to the benefit of all Fund members.
"Parliament needs to urgently pass the Proper Use of Worker Benefits Bill to prevent further ‘wage theft’ of such employee funds," said Mr Willox.
Tony Melville – 0419 190 347