Industry super fund, Rest, has called for a major overhaul of the superannuation performance test, warning that the current framework risks stifling investment in emerging industries critical to Australia’s future economy.
In its submission to the Economic Reform Roundtable Consultation, the fund argued the test should better reflect long-term investment opportunities in sectors such as clean energy, decarbonisation, affordable housing and technology.
Without these reforms, Rest suggested that super funds may be discouraged from backing high-impact, economy-enhancing projects that deliver strong long-term value.
“This is an essential reform to encourage investment in economy-enhancing local businesses and infrastructure,” the fund’s submission read.
The industry fund recommended that the government design the test to accommodate the evolving investment landscape, including support for new industries such as AI and venture capital, as well as climate-aligned infrastructure.
Further, the submission recommended the adoption of a 2035 Nationally Determined Contribution that aligns with the highest level of ambition, backed by robust sectoral decarbonisation plans to support the transition to net zero.
Rest has also urged caution in regulating private markets, warning that overly restrictive reforms could limit the ability of superannuation funds to support infrastructure and private equity investments.
Enrico Burgio, Rest’s general manager of public policy and advocacy, said Australia is “facing major challenges, including climate change, an ageing population and a severe housing shortage”.
“Without strong policy action, it’s younger Australians, including hundreds of thousands of Rest members, who will bear the brunt of these challenges,” he added.
The fund further advocated for removing stamp duty from ASIC’s RG 97 rules, arguing it should be treated as a tax rather than a transaction cost.
According to Rest, the current treatment distorts investment decisions and creates an uneven playing field compared to other jurisdictions.
A recent submission to the Productivity Commission by independent member for Wentworth, Allegra Spender, warned that RG 97 had possibly driven investment away from private capital.
“Industry stakeholders have expressed to me that the focus on gross fees in product disclosure statements as a result of RG 97 has encouraged more passive investment strategies and discouraged private capital investments that attract higher fees,” she said.
Rest has also backed calls by the Super Members Council of Australia and the Association of Superannuation Funds of Australia (ASFA) for stable policy settings to strengthen confidence in long-term investment strategies.
ASFA’s report to the roundtable argued that superannuation has become a cornerstone in Australia’s economic infrastructure, being responsible for a 2 per cent boost to gross domestic product and productivity, equivalent to roughly $2,500 in additional annual earnings for the average full-time worker.
According to the association, compulsory superannuation has added $1 trillion in additional household savings over the last 33 years.
ASFA CEO Mary Delahunty said at the time that investment from the super sector is “fundamental to lifting improvements in productivity”.
“Super funds deploy around half a million dollars in new financial capital every day on behalf of members. When businesses harness this capital effectively, it delivers both economic dividends and generational progress. But there is more Australia can do.”
Burgio said: “We strongly support economic reforms and policy changes that address intergenerational inequity, boost productivity and create a fairer super system.
“We believe the superannuation sector has a meaningful role to play in driving these outcomes, and we welcome the chance to advocate for our members and work with the government to unlock new ideas and build consensus on reform.”
