E&OE TRANSCRIPT
DOORSTOP INTERVIEW
ETHICAL INVESTMENT FORUM, PARRAMATTA
MONDAY, 13 DECEMBER 2021
 
SUBJECTS: Labor’s plan to remove religious discrimination from superannuation rules.
 
STEPHEN JONES: Australia's got a remarkable system of superannuation and retirement savings. Over the last three decades we've managed to amass over $3tr dollars in superannuation savings, all going towards paying for a happy and dignified retirement for Australians. It's benefiting them. It means they've got more money to spend in retirement. It benefits the economy as a whole. And it also ensures that we are less reliant on the pension and taxpayer funding of pensions as the population ages. Our superannuation system is  generally rated in the top five in the world. Other people come to Australia to study our system to see how they can improve their own. Now, it's not perfect. Earlier this year the government introduced a new bill to reform some of the problems in the superannuation system. I introduced the new performance management test, which means that every year, every a superannuation fund in the country will be tested against a set of benchmarks. We support having a high-performing superannuation system. We want to ensure that every fund in the country is providing high returns to its members, because that's what it's all about. But we want to ensure that the way the government treats superannuation is not discriminating against members who've made a conscious choice to invest in a faith-based superannuation fund. A faith-based fund which is deliberately investing in accordance with its religious beliefs and principles. I'm joined today by representatives from Crescent Wealth and from representatives from Christian Super. These are two funds which are set up on the basis of religious principles so that members of their faith can be assured that when they are putting their superannuation money aside on a fortnightly basis, that it is going to be invested in accordance with their religious convictions and religious beliefs. They knew that when they joined that fund. They'll be some sorts of investments that other superannuation funds can invest in the Crescent Wealth or Christian Super or other funds like them won't invest in, whether it be gambling or alcohol or gaming or other sorts of prohibited investments that they cannot invest in the course of their faith. We don't want to see a government agency come along and discriminate against those funds and mark them down because they are investing in accordance with their religious principles. But that's exactly what's happening under the government's new laws. It's not an accident. They were warned. They refuse to act. That’s why today I can announce that an Albanese Labor Government will ensure that there will be no discrimination against faith-based superannuation funds and we will direct the regulator to ensure that they take account of those faith-based investment principles when they are assessing the performance of a faith-based fund. It's fair. It's reasonable. And it ensures the people who've invested in those funds won't be discriminated against and won’t they shut out of the superannuation system. Happy to take questions.
 
REPORTER: At the moment APRA has only listed Christian Super as underperforming. Are you afraid, or do you think that other faith-based superannuation funds will soon follow?
 
JONES: If any fund is underperforming, we want to have a look under the hood and say why is that happening? If a fund is underperforming because they're charging too much in administration fees, for example, then that needs to be addressed. But if the only reason that that fund is not performing in accordance with the benchmark that the government has set is because they have refused to invest in certain assets which are a breach of their religious principles or their ethical beliefs, then that has to be looked at. If we are going to support freedom of religion in this country, then that’s got to mean something and people have got to be able to invest their superannuation in a fund efficiently which is going to invest that money in accordance with their religious beliefs. I might not share those beliefs. But absolutely defend the right of those members and those funds to invest in accordance with those beliefs.
 
REPORTER: What sort of discretion do you think needs to be given to APRA? What kind of metrics are you hoping that they would use?
                                                                                              
JONES: This is not a get out of jail card for funds that are underperforming. It is simply saying, if you've run a test over these funds and you've said that they're not making the benchmark, and but for the fact that they have invested in those assets or haven't invested in certain assets because in conformity with their religious beliefs, then that should be taken into account. If everything else is going well, but the fact that they have or haven't invested in certain assets because of their religious belief, then a sensible regulator and a sensible government should make laws which ensure that that is allowed to happenand those funds can continue to invest in accordance with those principles. I repeat. This is not a get out of jail card for under performance. It's merely saying to the regulator, you must take into account religious beliefs and the religious-based investment principles in the performance of that fund if that fund is specifically set up to cater for people of religious beliefs. And Crescent Wealth and Christian Super are an example of two funds, one for the Christian faith another for the Islamic faith, which have been specifically set up to cater for the needs of working people from those faith-based communities. Why would a sensible government want to shut them down?
 
REPORTER: I guess more broadly, what I'm asking is if a super fund chooses not to invest in, say, mining because of ethical reasons and they are therefore underperforming, will they be judged by the same metrics as a religious super fund or other ethical super funds?
 
JONES: No, this is what I'm making quite clear. This is not a license for every superannuation fund to say, well I've got a few Catholics in my fund and therefore that's the reason why we are underperforming. That's not what we're saying here. We're saying if you are a fund which has been specifically set up for a specific purpose and everybody who is a member of that fund knows it, it's on the label, it's on the envelope, they know exactly what they're investing in and they expect their fund to invest in a certain way then that has to be taken into account. The government shouldn't be shutting them down. It's not a get out of jail card for every fund in the country that says, well I've got a few Muslim members in my fund, I've got a few Catholic members in my fund or I've got a few Anglicans in my fund and therefore, that's a get-out-of-jail card for any under performance. We're not saying that at all. That would not be sensible, right or reasonable. But we're saying if a fund is specifically set up for a specific purpose and everybody knows it and it's legal and it's proper, why would we try and shut them down?
 
REPORTER: Does this the Open Labor up to criticism that it doesn't have the best interests of customers at heart?
 
JONES: Labor wants strong-performing funds. we set the superannuation system up and every time we attempted to improve superannuation contributions, or improve the system, we were opposed by the government. So nobody can criticise Labor for not standing for behind a system which we set up. That $3tr would be zero if the Coalition government had had their way at any of the years throughout the 1980s, the 1990s, or any of the time during the 2000s. In fact, it's only a few months ago where the Coalition members were trying to close down superannuation and calling it a rort. We don't believe them. And we believe that we should have a high-performing industry and high performing funds. And I want to repeat again, the members have joined a fund specifically because that fund, because they know that fund is going to invest in accordance with their religious beliefs. And who is the government to come along and say we're going to close you down because you are underperforming because you are investing in accordance with those religious beliefs? That's not fair. It's not right. It's not democratic.
 
REPORTER: So ideally it would be a separate metric for these funds than other funds? Or how is this going to be practical? What's the steps that would be taken?
 
JONES: I'm confident than Anthony Albanese’s got the team and the policies that are going to win the next election. And if the Australian people back us, as a matter of priority we’ll sit down with the with the government lawyers and say, this is what we want to achieve. We want these funds to be high-performing funds. But if for some reason this is the only metric that they fail on, this is the reason that they have filed this metric then we have got to take that into account. If they fail for some other reason, then they face exactly the same consequences of any other fund in the country. But if the only reason they failed a benchmark is because they invested in accordance with their religious principles, then we would say to them, is there some other way to get a good outcome? But shutting them down? That's not right.
 
REPORTER: If someone from Christian Super or Crescent Wealth, being labeled as underperforming by APRA, what does that mean for you guys? And how does that make you kind of rethink your investment options?
 
ROSS PIPER, CHRISTIAN SUPER: So look, there's a really important principle at stake here. And that is the ability for Australians of faith to make a choice about their superannuation fund. Christian Super, we're actually very supportive of reforms in the sector. We think that that's needed and is actually welcomed. But we also think that the right for Australians to make a choice about where they put their money, investing in line with their values and beliefs, is critically important. For us we're always working on ensuring that the fund is set up in the right way, serving strong investment strategies systems and processes to meet the needs and expectations of our members. That's a very active proposition for us. And we're going to continue to remain committed to delivering on that for our members.
 
REPORTER: So if a member was to receive one of those letters that says that their fund is underperforming, I mean what I mean what do you say to them? What do you say to APRA themselves?
 
PIPER: So I guess, the first point I'd say is that Your Future, Your Super, whilst reforming the sector is welcomed, I think everyone has broadly recognised that there are certain elements of those reforms that are very blunt. And in many ways for us that's one of the challenges that we have had. It's a retrospective test. It's after the fact. For example, us as a fund, if you look at our investment performance over the last three or four years for example, we would have no issue at all. We've significantly changed our investment strategy as any superannuation fund should be doing, always looking to ensure you have a strategy that is well-designed for the market conditions. But for us, always ensuring that there's a degree of integrity or authenticity because that is what our members expect of us, investing in line with their values and beliefs. To be doing good for society and to be doing good things for the planet.
 
REPORTER: Could I ask the same question for Talal, sorry?
 
TALAL YASSINE, CEO CRESCENT WEALTH: Yes my answer’s going to be, I agree with him!
 
REPORTER: You haven't been labelled as underperforming by APRA as yet. But is that something that you feel could happen to you in the future with the current state of the metric system that's used?
 
YASSINE: So we, like Christian Super and the rest of the industry, agree that there definitely should be a test to require a certain level of performance. And we have not been labelled in any way. However, it is very clear that we invest in a limited compliant manner at all times. And over a period of time, when you apply the way we invest in accordance with Islamic Sharia principles, and the way it is the test is structured and measured, it is measuring apples and oranges together. So at some stage, they will not align. And our concern has always been that we were set up for precisely that reason, and that reason is that because we are different. Because we exist to serve the Australians in the community who are a marginalised community at best. At worst, a Human Rights Commission report that came out in July 2021 in fact, the Federal Government's own department noted that more than 80 percent of Muslims believe that they do not feel represented. In fact, feel excluded from the Australian community, a number that is beguiling in my view. And if we continue down this path in superannuation, with Crescent Wealth or anybody else, any other faith-based fund, I think that number we just get worse. And I my view it's a fair dinkum set of rules for everybody, but those rules have got to apply to a particular circumstances. For Crescent Wealth, for example, we invest in accordance with Islamic principles. We measure against Islamic benchmarks, which are not the same as conventional benchmarks. Let me give one really easy example. The top 20 companies in Australia, most of which we cannot invest in. So the Australian (indistinct) benchmark or the AMP benchmark or any particular benchmark does not work for us in the long term. Whilst we have not seen any action or any complaints whatsoever, and we remain one of Australia's fastest-growing funds from a small base, a high net-promoter score, which is engagement with the community, we believe we are the quintessential type of organisation fully engaged with a community, educating people about the community and also alerting people to consumer choice. Everybody's who joined Crescent Wealth did not do it by accident. It's formal choice. You can't by accident, by default otherwise join Crescent Wealth. We believe we are model fund and that these rules potentially may cause an issue into the future. And we asked the government and the Labor opposition to reconsider that decision.
 
REPORTER: Can you just give us a brief overview of the things you cannot invest in as part of Crescent Wealth investments?
 
YASSINE: So the global Islamic standard for investment is set globally and so it's not a standard unless it was adopted. It means you cannot invest in tobacco, armaments, pornography, alcohol, banks or insurance company because they're usuries. And so if you exclude those two from the Australian market, for example, you'll see that we are truly different to the Australian market. And that's the very reason and the call for which we were set up. And that is to offer strictly Islamic-compliant investment for people’s superannuation which is mandatory, by the way, it’s a tax. And so if you happen to be one of, my guess is one million, one-point-two million Australian Muslims and you want to invest your superannuation in accordance with your beliefs and with your articles of faith and of course to retire with dignity and honour and with reasonable fees, then you will be excluded from that option.
 
ENDS