APRA delivers super funds a tick on investment in tough times

23 July 2020

Faced with continuing criticism from some Government back-benchers, Australian superannuation funds have been delivered a major tick by the Australian Prudential Regulation Authority (APRA) for the way in which they have supported corporate capital raisings in the face of the COVID-19 pandemic. 

The plaudits came from APRA chair, Wayne Byres, who also paid tribute to the manner in which the superannuation funds had handled the Government’s hardship early access superannuation regime. 

Byres used a speech to a business forum to point out that the “superannuation sector has demonstrated the financial and operational resilience to respond rapidly to the temporary early release scheme, taking just over three business days on average to process 3.6 million applications to a value of $25.3 billion and counting”. 

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“It has done so while also supporting the extensive capital raising by the corporate sector over the past few months: a critical role that should not be underestimated,” the APRA chair said. 

His comments have come as the Government backbenchers continue to manoeuvre ahead of the release of the recommendations of the Government’s Retirement Income Review and as Industry Super Australia (ISA) has sought to reinforce the degree of investment industry superannuation funds are making in the economy now, and into the future. 

The primary objectives of the Government backbenchers appear to be further slowing the timetable for lifting the superannuation guarantee (SG), making superannuation voluntary and paving the way for SG balances to be capable of being accessed for home ownership. 

None of these issues were clearly raised in the brief delivered to the Retirement Income Review panel by the Treasurer, Josh Frydenberg, but the release of the panel’s report is expected to act as a catalyst for elevating debate of the issues to Parliamentary Committee level. 

APRA’s Byers used his business forum address to reinforce the challenges being faced by the prudential regulator not least avoiding the creation of a “capital cliff” that the banks and insurers would have to climb. 

In doing so the APRA chair made specific reference to the continuing challenge of disability insurance for insurers. 

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