Speaking at the Financial Services Council BT Political Series, Chris Bowen discussed the Productivity Commission report into the super sector and the Royal Commission, noting both "identified some real problems with chronically underperforming funds."
He said "shifting the dial even by a few basis points" could have a material effect on a person's retirement outcome given compounding over time, and this meant ensuring people were in better-performing funds was "paramount."
Referencing a bill in Parliament requiring super funds to report on their performance "compared to similar products," Bowen said Labor has amended the proposed legislation to make "the outcomes test tougher, make director penalties higher and make APRA's powers stronger."
"Millions of Australians," he continued, "are being ripped off by underperforming accounts and we want to force these funds to report on their performance and lift their game."
He said the current government is "preferring politics over policy" by apposing Labor's amendments.
"I want to make it clear," he concluded. "Consistently underperforming funds, regardless of whether they are industry funds or retail funds will have no sympathy from a Shorten Labor Government."
With the election fast approaching, it's clear Labor is on the offensive - and super will be an obvious target. Our contributor, Paul Tynan, wrote about the shortcomings of the Productivity Commission's performance analysis, arguing that "picking fund performance winners has so many different variables."
He also noted that funds have "different investment styles, asset allocations, benchmarks, research, trading methodology, currency policy, ethical policies, governance policies and access to listed and unlisted investment assets."
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