NSW Govt backs industry fund model

The NSW Government has used its submission to the Cooper Review to call for confirmation of Australian Prudential Regulation Authority (APRA) analysis that industry funds are delivering better outcomes than retail master trusts.

The State Government submission said that if APRA’s overall findings with respect to investment returns, fees and expenses in respect of trustee governance practices were found to be reasonable by the review panel, it should consider and recommend appropriate changes.

The NSW Government submission has also revealed that the State has written to the Commonwealth Treasurer with respect to superannuation investment in major public private infrastructure projects.

Dealing with investment regulation, it said that the Australian Law Reform Commission had previously considered and advised on proposals for controls on investment, and that this advice had been incorporated into the current regulatory regime for investments.

However, it said that proposals that served to lower investment returns would reduce retirement entitlements, and should be strongly opposed.

“Instead, amendments to the existing regime should be based on removing barriers to effective investment and managing risk,” the submission said.

“Removal of barriers would apply particularly to infrastructure investment, where efforts should be made to remove obstacles and encourage investment by superannuation funds,” it said.

The submission said that other policy objectives could and should be met by other, more specifically designed mechanisms such as emissions trading for climate change.

“While incentives could be used to attract superannuation funding, and barriers to investment should be minimised, care is needed to ensure they promote efficient outcomes and are not just based on picking winners,” it said.