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Block report softening up super for king hit?



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Richard Alston

SHADOW MINISTER FOR SOCIAL SECURITY, CHILD CARE AND RETIREMENT INCOMES

NEWS RELEASE B L O C K RE1 Γ S O F T E N IN G U P S U P E R F O R KINO HIT?

While today's report by the Block Taskforce on Commercialisation of Research' may have much to recommend it, its recommendations for Investment controls on some forms of superannuation Investment are not only bad economics but they play directly Into the hands of the many drone bees in government and aCt u circles who are already swarming around the honey pot. The fact is that putting pressure on funds to invest 1% of their assets In local technology and venture capital projects and to limit offshore investment to 10% are a sure fire way to reduce the rate of return and therefore the attractiveness of superannuation for ordinary Australians.

It may be no coincidence that the Government has chosen to drop this report only days before the release of Its White Paper which was hastily promised by the Treasurer In response to widespread consternation following the Budget proposals for compulsory superannuation.

The Block report joins a long line of Labor luminaries who are all anxious for superannuation funds to be forced to Invest In ‘socially desirable* projects

- Howe wants low cost housing and social infrastructure - Richardson prefers manufacturing - the Evatt Foundation Is pushing QBEs

- Crean is happy with any trade union Job creation projects - Button has been jumping up and down for months about venture capital

As Dr Vince Fitzgerald pointed out In his May 1991 report on Australian's Superannuation Savings: "Calls for Government intervention to ensure the flow of capital to areas such as development capital to small and medium sized enterprises; venture capital for start ups, particularly in high technology areas; for export oriented firms or projects; and so on, are not new*.

Arbitrary controls on superannuation to force investment responses are a head in the sand reaction by those who refuse to face up to the need for restructuring the Australian economy so as to make this country a much more attractive place to Invest,

Overseas investment in fact provides, through portfolio diversification, the opportunity for higher returns at acceptable risk in a much wider range of industries than is available In Australia,

As Fitzgerald further points out: ‘Any policy to restrict superannuation investment overseas on domestic industry policy or similar "public Interest* grounds would be at odds with the wider internationalisation of Australian finance and Australian business generally".

Tire Federal Governments should Immediately disown this latest siren call which is fundamentally against the Interests of superannuate.

For further Information contact Senator Richard Alston on [03J 890 5177 25 November 1991 co i

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