The Federal Government is facing having to accept fundamental changes to its Your Future, Your Super legislation particularly around giving the Minister the power effectively veto investment decisions made by superannuation funds.
Members of the cross-bench in the Senate late yesterday appeared prepared to support the Australian Labor Party in pursuing key amendments to the legislation in circumstances where the Federal Opposition had said its intent was not to block the bill but to seek to pursue amendments which would remove some of its worst elements.
The position of the cross-bench emerged at the same time as the Minister for Superannuation, Financial Services and the Digital Economy, Senator Jane Hume, sought to point to the latest Australian Prudential Regulation Authority (APRA) superannuation data as being supportive of the Government’s position.
However, while that data showed a strong recovery in superannuation returns after the impacts of COVID-19 in the early months of 2020 and the effects of the Government’s Early Release Superannuation (ERS) initiative, it also confirmed just how conservatively most superannuation funds had pitched their investment allocations.
While there had been heavy criticism of industry funds allocations towards unlisted investments, the APRA data for the March quarter showed that such investments represented a very minor per centage and that most money was being directed to equities, fixed interest and cash.
The APRA analysis showed that as at the end of the March 2021 quarter, 54% of the $2.0 trillion investments were invested in equities, with 27% in international listed equities, 23% in Australian listed equities and 4% in unlisted equities.
On top of that it showed that fixed income and cash investments accounted for 29% of investments, with 19% in fixed income and 10 per cent in cash, while property and infrastructure accounted for 14% of investments and other assets, including hedge funds and commodities, accounted for just 3%.