Despite having no submission to the common ownership inquiry, Treasury has assured the committee the issue was “on the radar” but has not made any recommendations for regulation.
David Pearl, assistant secretary in the market conduct division of Federal Treasury, said Treasury had not done any work in the area since 2017, as the department had focused work in other areas including the media bargaining code earlier this year.
“Our reading of the debate [of common ownership and capital concentration] internationally is there is no consensus on whether this is an issue or not,” Pearl said.
“Certainly, there are some academics and authors who argue strongly common ownership is a question.
“There are equally other academics and authors we are aware of who deny there is a problem, so we don’t see a consensus in the academic community.
“This issue is an emerging one in the sense that competition authorities around the world are aware of it, but it hasn’t become a major focus yet. Certainly, it’s something to monitor and in the future could become more salient.”
Pearl said traditionally concentration indices had been used to measure competition integrity, but markups on the profits generated by funds had started to be used.
“Economists are starting to look more at market outcomes and trying to attribute that, so that’s reflected in markups,” Pearl said.
However, Alex Maevsky, acting assistant secretary in retirement advice and investment division in Treasury, said the Productivity Commission did not find significant evidence of markups in the issue of concentration.
“Productivity Commission’s conclusion was the main competition issues were not on the supply side of superannuation, but more on the demand side with the disengagement of members and consumers,” Maevsky said.
Coalition member, Jason Falinski, said: “This would be the same Productivity Commission that found access justice was not created by how much lawyers charged their clients. So please forgive me if I take that report with a degree of scepticism”.
It was not acknowledged whether Falinski was aware Maevsky had worked for the Productivity Commission for 15 years up to December 2017.
Beneficial ownership registry
Similarly, Treasury said the introduction of a beneficial ownership register was still of interest, but that was unlikely to be implemented until 2024.
Acting chair of the committee, Dr Andrew Leigh, said that announcement had been pushed back significantly.