National Indigenous Times Editorial: There’s recently been a Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. The Commission’s findings were damning, revealing that banks and financial services have been pursuing short-term profit at the expense of basic standards of honesty. There’s also been an absence of punishment for misconduct.
This isn’t only happening in the superannuation industry.
Native title groups are potentially being swindled of millions of dollars a year when handing hard-won money over to trustee companies to manage.
Unfortunately, the scope of this Commission didn’t include the six non-government entities, which own all 28 trustee licenses in Australia, but parallels can be drawn between their business practices and those investigated by the Commission.
To illustrate the problem: a native title group approaches a trustee. It’s told that the trustee will take, for example, 1% per year. That’s the trustee fee, the fee for being a responsible entity for the native title group’s money.
But the trustee is not obliged to disclose without prompting where the money is invested, or the costs of additional services—these might include costs to cover meetings with the native title group, audits or finance brokers. They also don’t need to shop around for the cheapest services, or those that offer the best value to native title groups. They can push their own products, or the products of their parent companies, to generate more wealth for themselves.
So instead of paying 1% per annum, native title groups are often paying substantially more.
It’s important to point out that the conduct of the trustees—in failing to disclose the hidden fees to native title groups, or in delivering conflict renumeration to shared parent companies—is not actually illegal.
But these practices are perpetuating Indigenous disadvantage. If native title groups’ money is not managed properly, it puts a greater burden on the public purse when there’s none left.
These practices also ensure that Aboriginal people are not being treated in the same way as mainstream Australians, such as clients of trustees for superannuation. If it’s not acceptable for the average Australian to suffer this kind of fee gouging—then why are native title groups subject to it without scrutiny?
There needs to be a broadening of the scope of the Commission, and the relevant trustee companies should be put on notice. Native title groups must ensure they fully understand the hidden fees and how much they’re actually paying the trustee.
Across Australia, hard-won native title money is used to support language, culture, the education of young people, and business opportunities on Aboriginal land. This money should not be swindled, or eroded, in a system proven to be dishonest and defective.
Looking forward, we need to advocate for a future where trustees work with native title groups in a spirit transparency and honesty.