Government’s proxy regulations attack super members’ financial interests

The Australian Council of Superannuation Investors (ACSI) said today that Treasurer Josh Frydenberg’s announcement to impose new regulations relating to proxy adviser ownership risks having a detrimental impact on the financial outcomes of millions of superannuation fund members.

ACSI CEO Louise Davidson said:

“ACSI has provided independent advice on financially material issues to superannuation funds for 20 years, strengthening investment outcomes through better company performance over the long-term for millions of Australians.”

“ACSI has strongly advocated for better governance of Australian companies like AMP, Westpac and Rio Tinto, including challenging banks on money laundering that is alleged to have funded child sex abuse and pushing for greater transparency and accountability for the Juukan Gorge tragedy that saw 46,000 year-old cultural heritage destroyed and shareholder value impacted. A destruction of heritage that was rightly condemned by an all-party Parliamentary Committee inquiry.”

“The Treasurer’s changes would see superannuation funds that manage money on behalf of millions of members denied independent advice on the performance of the companies they invest in.”

“The announcement follows a process lacking in any transparency, with the Treasurer refusing to engage with proxy advisers, or even to release submissions made months ago to its consultation process until this morning.”

“Overwhelmingly, investors have supported the provision of quality independent advice. These proposals are not in the interests of millions of Australian superannuation fund members.”

“The Business Council of Australia and the Australian Institute of Company Directors specifically stated that they do not consider the current ownership arrangements of proxy advisers to be of concern, as outlined in submissions to the consultation.”

“Pushing through regulations with no consultation just before Christmas undermines the principle of transparency that the Treasurer claims to uphold. No case has been made for the regulations. This appears to be a deliberate attempt to sidestep the parliamentary process to avoid proper scrutiny and is an insult to the Senate and millions of superannuation fund members.”

Legislative protections are already in place to support quality advice, such as legislation requiring superannuation funds to act in members best financial interests and robust competition protections. ACSI does not vote, nor has it ever voted, on behalf of its members or include them in the process of developing recommendations. Superannuation funds make their own independent voting decisions. ACSI already holds an AFSL and provides its advice free of charge to companies the subject of the advice.

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