Treasury releases details on proposed super test overhaul
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More news: Treasury has released details on its proposed overhaul of the super performance test, which Chalmers is considering adjusting to assist venture capital, startups and renewable energy.
On Friday, the department called for submissions on the proposed changes which it said would “protect strong outcomes for members, maintain an objective test, [and] ensure long-term stability of the test”.
The changes would create a new “emerging and alternative assets” class, including VC and startups, with Treasury’s consultation paper arguing current settings did not properly recognise their “longer investment horizons and materially different risk and return profiles”.
The paper proposes that that class be assessed against inflation, not a specific investment benchmark.
Earlier on Friday, Chalmers suggested the current rules were an impediment to new investment and, by extension, Australia’s productivity drive.
Treasury will accept feedback on the proposed changes until mid-June.
Chalmers appears to confirm venture capital super test carve-out
The news: Treasurer Jim Chalmers has appeared to confirm that venture capital, affordable housing and renewable energy will be exempted from the annual superannuation performance test.
The context: Speaking to reporters on Friday, Chalmers insisted the measure was not designed to “replace or weaken” the test but warned it was inadvertently impeding investment in key areas.
Chalmers specifically singled out housing, energy, venture capital and startups as sectors where investment has been deterred.
“We don’t want the performance test to unintentionally discourage investment in some of the most important parts of our economy,” he told reporters.
“Investment is key to productivity. Productivity is central to the budget that we [will] hand down on Tuesday night.”
The Australian Financial Review reported on Thursday that venture capital, affordable housing and renewable energy would be exempted from the test.
Chalmers insisted the government was not picking winners in superannuation investments.
“We have absolutely no intention of directing superannuation investment. We have absolutely no intention of messing with the superannuation fund’s primary responsibility to members to get the best return that they can,” he said.
“We are looking to see where there are unnecessary, unintentional impediments to them at some of those sorts of investments.”
Finance Minister Katy Gallagher also revealed that Tuesday’s budget will include $64 billion in savings, money she said would be reprioritised to necessary spending and used to pay down the national debt.
The bulk of the savings will come from the government’s overhaul of the NDIS, which will see more than 150,000 Australians taken off the scheme.
But the pair declined to confirm what the net saving unveiled on Tuesday will be, having previously warned that the budget was facing roughly $61 billion in pressure over the forward estimates.
“There will be a net save on Tuesday night. It’s quite rare that governments hand down budgets where the net impact of all of the policy decisions is positive,” Chalmers said.
What they said: “We won’t be watering [the test] down, we won’t be replacing it. We won’t be ditching it. But we will be improving it. We will be modernising it and we will be reforming it,” Chalmers said.
The sources: Jim Chalmers press conference, Treasury consultation paper
