Other people's money
Australia’s super funds are steering the companies they own towards an ideological agenda — and away from the returns their members are owed. by david hughes.
First published in the MRC’s Watercooler newsletter. Sign up to our mailing list to receive Watercooler directly in your inbox.
The superannuation fund that represents low-paid health workers is pressuring Woodside to get out of the oil and gas industry. It’s like telling Cadbury to get out of the chocolate business.
Last week, the boss of HESTA said she was concerned Woodside is too heavily invested in oil and gas. Unsurprisingly, Woodside extracts a lot of oil and gas. And that's a good thing, because in 2026 Australia needs both. Which raises the question: why did HESTA invest in a fossil fuel producer at all if it’s so ideologically opposed to what the company does?
Superannuation exists to fund retirements, not to remake society.
HESTA’s position is as illogical as it is illegal. The fund has a duty to maximise returns for its members, most of them on modest incomes. A health worker who wanted to fund climate activism could have handed over their retirement savings to Greta Thunberg. Instead, all they ask for is a return of at least 7% a year.
HESTA now manages around $100 billion in retirement savings, much of it belonging to nurses, carers and health workers. That scale gives the fund influence, but it does not change its purpose. The money belongs to members, not to executives or union-appointed directors seeking to turn a retirement fund into an activist vehicle.
Half of HESTA’s board are union officials with little financial experience. At least the fund is required to have an independent chair. HESTA has taken a broad interpretation of the word ‘independent’: for the last seven years the chair has been Nicola Roxon, a former union official and Labor minister. A capable politician, but one with less financial experience than a suburban accountant.
Industry super funds employ union officials in highly paid roles and sit at the centre of a circular economy. Workers pay into the single default fund chosen by the dominant union. The fund sends money back to the union. The union then donates similar sums to the ALP, which exists to protect the system and rewards retiring MPs with $200,000-a-year board positions. It's a protection racket run for a protection racket.
We have identified 21 separate payments from HESTA to unions in the last financial year, totalling $1,233,279. Not one was declared in the section of HESTA’s annual report requiring disclosure of “related party transactions”. Good luck finding much reporting on what the money achieved; much of it simply fattens the bottom line of already wealthy unions. As we have previously uncovered, declining membership has pushed unions towards commercial revenue streams, often oblique transactions with employers and superannuation funds. The commercial empire expands, along with their political influence. I even write you this note from the MRC Sydney office, a building partly owned by the Health Services Union.
Despite owning less than 1% of Woodside, HESTA last year joined a push to oust several experienced directors at the company’s AGM and replace them with hand-picked, climate-conscious alternatives.
One of the absurdities of Australian law is that as few as 100 shareholders can propose a resolution at a company's AGM, as we revealed in a recent MRC report. Activist investor groups have duly abused it, moving a motion calling for three Woodside directors to be sacked despite holding just 0.002% of the company, a stake acquired for no purpose other than activism.
HESTA's moral compass is strangely selective. The fund holds 133,487 shares in Sands China, the Macau casino empire; 155,901 shares in Textron, America's last maker of cluster bombs; 1.81 million shares in Tencent, who are on the Pentagon's list of Chinese military companies; and 4.84 million PetroChina securities, backed by China's state oil machine.
Yet somehow Australia's Woodside is the company HESTA feels compelled to lecture. The nurses coming off night shift this morning never chose this fight. Most never even chose HESTA; the fund was simply the default.
Super funds enjoy a privilege no other industry has: a guaranteed river of compulsory contributions, lightly taxed. That privilege was granted to fund retirements and nothing else. Funds that treat it as a war chest for politics invite the question they should fear most: why the privilege at all?
