Shadow finance minister Stephen Jones warned that Treasurer Josh Frydenberg’s veto power over super fund investments would create sovereign risk and that a future Treasurer might use the same power against the business community, saying “this is a ball that can be kicked in both directions”.
“The thing conservatives should be concerned about is the investment delete power they’re happy to hand a Treasurer…in fact, every Treasurer to come,” Mr Jones said.
“Conservatives may love the fact that Josh Frydenberg might use this power to cancel an investment in a wind farm or an online news service, but what if that same power was used to cancel an investment that they were particularly fond of?”
Mr Jones noted the recent controversy over ANZ’s decision to wind down its existing lending to coal-fired plants and thermal coal producers and cease directly financing them by 2030.
“You had cabinet ministers slamming that bank for doing the same thing that many other banks have done and that the bank’s own regulator said that they should be doing. You had the government initiating an inquiry into investment decisions of Banks, superannuation funds and insurers. This power is extraordinary,” he said.
Mr Jones also warned that crossbenchers who didn’t want to back particular pieces of legislation could demand that the Treasurer veto investment in renewables. Recent crossbench addition Craig Kelly is a noted climate sceptic, but has also indicated that he will support the Morrison government in matters of confidence and supply.
“It’s not hard to see how this would be weaponised in a hung Parliament…Ordinary, lawful everyday investment decisions of superannuation funds will be dragged into the political fray,” Mr Jones said.
The veto powers have previously been criticised as a “regulatory kill switch” by Industry Super Australia (ISA), while the Australian Institute of Superannuation Trustees (AIST) called it an “extraordinary overreach of power with no precedent in this country”.
Given how Frydenberg walked all over advisers with the Haynes No 2 bill, helping to destroy small financial planning businesses, why would he stop there? Frydenberg is a big worry, as he is only focused on the big end of town.
Do the LNP really think APRA, ASIC or Treasury (ie the ones advising them) really have a clue about what super funds should or shouldn’t be investing in.
At this point in time I am more than happy for both parties to take the War (Industry v Retail) to the next level. It will be a disaster and the public will not have a clue – driving more clients to realise the value in paying a real Financial Planner massive fees.
Bring it on – may the game begin.
Never thought I would ever be saying these words, but the Labor minister actually has a good point (and veiled threat) that a future (Labor) Treasurer might use the same power against the business community…
I want the LNP to break the unholy trinity between Labor ISA and Unions, and they’re strongly attempting to do so, but agree they have to be cautious about what future implications any current legislation may create.