POWERED BY MOMENTUM MEDIA
Is superannuation too big to let politicians play with it?
As the Australian superannuation industry moves to assets of over $3 trillion it is time to extract politics from the equation and place the sector in the hands of an independent entity such as the Reserve Bank of Australia (RBA).
That was one of the issues canvassed in a roundtable canvassed by Super Review with NESS Super chief executive, Paul Cahill actively arguing for the fate of superannuation to be removed from the hands of politicians and into those of a less volatile authority.
“I think it is time that the whole superannuation debate is moved to a different level and what I’d love to see is the Reserve Bank get carriage of superannuation,” he said.
“Because of its political nature now, and the size of it – $3 trillion going to $8 trillion – it’s too dangerous to leave it to fly by night politicians with an agenda and I include Labor and Liberal in that description,” Cahill said.
“You can see the damage that it can do when it is treated in an incorrect manner,” he said.
“It [superannuation] needs to be treated like interest rates or currency and needs to handled by an independent authority such as the Reserve Bank. The Government may put people on the board of the RBA but it is highly independent.”
“Due to the critical place that superannuation intersects with the economy now, I think it’s time it gets moved off to something like the RBA for carriage of the various legislative requirements,” Cahill said.
Deloitte Superannuation partner, Russell Mason said the concept being canvassed by Cahill was not one he had previously contemplated but that he agreed that “as we approach $3 trillion in assets superannuation is something that is just too large and too important to get wrong”.
“So whether it’s the RBA or consolidated with a specialist superannuation regulator which brings the best of the Australian Prudential Regulation Authority (APRA), the Australian Securities and Investments Commission (ASIC) and the Australian Taxation Office (ATO) together we need to make sure this money is well-regulated.”
He said that Deloitte had estimated that by the end of the 2030s, superannuation funds would own over 60% of the assets listed on the Australian Securities Exchange (ASX) which represented a huge amount of money with the capacity to change the shape of corporate Australia.
“All that means superannuation will need to be well managed and well-regulated and, as Paul Cahill said, from an independent point of view,” Mason said.
TAL chief commercial officer, Andrew Howard said he believed it was about confidence and the need for fund members to hear different voices talking about confidence in the superannuation system and confidence in the role insurance plays in superannuation.
Recommended for you
Super funds had a “tremendous month” in November, according to new data.
Australia faces a decade of deficits, with the sum of deficits over the next four years expected to overshoot forecasts by $21.8 billion.
APRA has raised an alarm about gaps in how superannuation trustees are managing the risks associated with unlisted assets, after releasing the findings of its latest review.
Compared to how funds were allocated to March this year, industry super funds have slightly decreased their allocation to infrastructure in the six months to September – dropping from 11 per cent to 10.6 per cent, according to the latest APRA data.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.73 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
30.15 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.71 3 y p.a(%)
