No matter who is technically right or wrong here, it is...

No matter who is technically right or wrong here, it is particularly galling to be a BSF member and realise that the practice of lending for shorting of what you might think of as 'your' shares, but are actually legally owned by the BSF as Trustee, is contributing to a strategy specifically designed to diminish the value of your final Super outcome. How that is 'operating in Members' best interests' I fail to understand.
I spent around 18 months arguing back and forth with a BSF more than 10 years ago about this. Let's call them MTAA Super, because that's who it was and they no longer exist.
MTAA's arguments in support of 'lending to short' were:
1) The income we receive from Lending To Short partly offsets our administration costs [Yes it does - but at what overall cost to Members?]
2) If we didn't do it, everyone else still would, putting us at a 'competitive disadvantage' [ True , I guess, at least as far as fees are concerned]
3) It aids liquidity in the Market. [True, but as that new liquidity is all initially on the Short side, you can see where that is going].
4) It aids Price Discovery. [Well, these days the concept of there being a price or value, an actual worth of a Company seems to have gone out the window. See the lengthy and continuous discussions on HC by Wot, 618, BD etc., and current analysts' consensus, or lack thereof ].
What has seemingly replaced Fair Market Value is:
High Frequency Trading, HFT, i.e. institutional day trading and front running, usually seen as a rapid fire avalanche of tiny trades, which conceptually has no regard for Value but is legal. ASIC cannot take action against a legal activity, even if it adversely affects the broader market by scooping profit into a small number of hands.
Shorting. In a relatively small market like the ASX, with less than ten Companies of globally significant size, it becomes much easier for a single committed shorting entity to depress the share price of any relatively small target. It's a short sellers' paradise. Even worse is the occasional practice of a short fund borrowing shares, probably from BSFs, getting set short, and then publicly denigrating that Company by a negative 'analyst's report', often containing obvious errors and distortions. See Blue Orca and 'friends' shorting Seek ASX:SEK, and also the notorious short attack by Viceroy and 'friends' on Tyro ASX:TYR. And there have been others, but none of this type yet against STX, AFAIK. Once again, covered shorting is legal here, so ASIC can't and won't take action.
And this new form of moving the market we have recently been seeing, High Frequency Mid Point Cross Trading. It may be occurring in other ASX shares, but I've not observed it before. It will make an interesting case for investigation and prosecution by ASIC as it has all the hallmarks of illegal activity. We can only guess the perpetrator's ultimate purpose.
After my long and fruitless argument with MTAA, I eventually rolled my own Super to Another Place, and largely disconnected from investing in the ASX also, come to think of it. I'm pretty sure my action played no part in MTAA's subsequent merger with another BSF. Reminds me of the late Spike Milligan's book "Adolf Hitler : My Part In His Downfall".
The only way to reduce the pernicious effects of this leagalised theft by shorting is for Members, i.e. most Australians, to apply enough pressure on the Super peak body, ASFA, to encourage or even shame them into banning the practice by all their Member Super Funds, simultaneously. That would largely, but not completely, turn off the Shorters' supply at its source.