In a heated debate during the Parliamentary enquiry of common ownership of markets in Australia, the Association of Superannuation Funds of Australia (ASFA) has accused the committee of dealing in “conspiracy theories”.
Dr Martin Fahy, ASFA chief executive, said the state of evidence was far less emphatic than the commentary would suggest.
“The studies that have fuelled policy maker concerns are fraught with empirical challenges, specifically with determining any relationship between market concentration and ownership and economic outcomes,” Fahy said.
“The question of market dynamics and concentration of [funds under management] FUM across a smaller number of super funds is accepted wisdom.
“What is not acknowledged and not proven and we need to be clear about this, neither ASIC [the Australian Securities and Investments Commission], APRA [Australian Prudential Regulation Authority] or ACCC [Australian Competition and Consumer Commission] suggest there is any evidence of any harm arising of concentration of capital of common ownership.”
Wilson said the regulators had “spectacularly failed” on several fronts to look at forward-looking issues.
“Including identifying corruption in parts of the super sector… Just because they can’t find an issue doesn’t mean it doesn’t exist or doesn’t address the fundamental challenges,” Wilson said.
“Do you think there is justification to look into these issues or is it all just fantasy?”
Fahy said there were public policy issues of greater importance that needed to be addressed.
“I prefer to trade in facts and evidence, I think trading in conspiracy theories and more importantly legislating for conspiracy theories is not something a Parliament should engage in,” Fahy said.
“Nobody suggests there is any causation between common ownership and consumer harm, [which] means that this is not an issue that should concern us in terms of regulation and legislation”
“Respected academics have said the evidence does not exist… what we have is correlation and that cannot be attached to any causation.”
Fahy said the history of conspiracy theories has not ended well which led to another Coalition MP, Jason Falinski to ask what specific examples he was referring to.
Fahy said: “The views that have been held forth who control all the financial systems have been toxic and distasteful”.
Falinski said: “Are you referring to Jewish conspiracies and things of that nature?” to which Fahy nodded ‘yes’.
Wilson took offence to this notion.
“So far we’ve had a press statement welcoming the enquiry in the form of a tantrum and statements to the committee which frankly give nothing of any value apart from to attack the committee,” Wilson said.
Wilson said Fahy had not answered the question or whether increased common ownership and capital concentration could have downflow consequences for competition.
“If we saw entities using that leverage to do things like collude or engage in cartel like behaviour and I think its contestable given we spoke to the ACCC about around unlisted assets and multiple super funds collaborating together and with state governments in diminishing competition,” Wilson said.
“You don’t see there’s potential for these problems… it’s merely ‘conspiracy theories’.”
Fahy said this was the case in the absence of factual evidence that met the burden of sound academic research and evidence from regulators.
“The idea that we would regulate for the possibility of what you’re saying, which is a conspiracy to act in joint enterprise to damage consumers is to trade in conspiracy theories,” Fahy said.