The 1.8 million workers we represent are among the millions of working and retired Australians who entrust their retirement savings to be invested via the superannuation system.  The Government’s proposal to increase regulation of proxy advisers will harm the ability of important intermediaries – superannuation funds and their investment managers – to identify poor corporate behaviour and protect these investments on behalf of working people.

The consultation paper fails to outline harm to shareholders or businesses from the current legislative and regulatory regime, fails to outline examples of misconduct, and has no justification for its consideration of changes to the regulatory environment.  Despite this, it recommends changes which would chill corporate engagement from institutional shareholders and limit the ability for the custodians of workers’ retirement savings to ensure that the companies they are invested in act and operate in a way which generates long-run returns for members and are held accountable for their failings to the community and to their shareholders.

The consultation paper’s focus on the provision of proxy advice to one class of institutional shareholder, superannuation funds, shows the proposed changes are borne of political mistrust of these institutional investors in particular as opposed to insurers, banks, investment funds, and other international asset owners (including foreign-owned pension funds).

An apparent reason for this focus and for the proposal as a whole, is that ‘there is insufficient public information today to determine whether superannuation funds, in this area, are acting in a manner consistent with their legal obligations’.  That there is insufficient public information to determine this after the Financial Services Royal Commission, and ASIC review of proxy advice in 2018, the increased powers and resources awarded to the Australian Prudential Regulation Authority and the Australian Security and Investments Commission, and increased public scrutiny on the superannuation sector shows there is no doubt to the legality of the advice and  its use.  The failure of the Consultation paper to produce a single case of misconduct in support of a radical set of regulatory measures based on political suspicion rather than the best interests of members.