Back in 2022, Future Fund CEO Raphael Arndt told Investment Magazine that “more domestic exposure” made sense for Australian investors than it did before because of “political risk and deglobalisation” issues. The fund was increasingly concerned about the rise of populism abroad and the decreased investor protections that often go with it, and the thesis of bringing capital home to Australia made perfect sense.  
 
In the years since, that thesis has become a little shakier.  
 
In 2024, Arndt’s concerns were ironically emphasised by a change in the Future Fund’s mandate to make it consider “national priorities” – supporting the energy transition, increasing the supply of residential housing and delivering improved infrastructure – when investing. The Future Fund would later see its long-standing prohibition on internal investment altered to allow it to buy and manage assets that might come with national security considerations, such as defence sites.  
 
The Future Fund was quite quickly engulfed by the forces it had elucidated in its multiple position papers on new investment orders and geopolitical fragmentation. Meanwhile, Treasurer Jim Chalmers has loudly encouraged super funds to invest in affordable housing, and they have also become a key weapon in Australia’s soft power arsenal.  
 
The “lucky country”, and its very lucky asset owners, are not immune to the upswing in populism reshaping the Western political world.  
 
Nowhere is that more obvious than in the meteoric rise of One Nation. Long-considered a bad joke in Australian politics, a growing sense of disgruntlement in the electorate about cost-of-living pressures, immigration and broader economic decline has seen the fortunes of Australia’s nativist party surge.  
 
Its wins in the South Australian state election, and in the Farrer and Secret Harbour by-elections, have demonstrated that the rage is real. If that rage can be maintained it’s quite possible that One Nation will help the Liberals form government in Victoria. Barnaby Joyce’s television appearances aside, it is an increasingly sophisticated political operation with strong grassroots support from a segment that, rightly or wrongly, feels unheard.  
 
The latest bomb that One Nation has lobbed is, of course, a form of super for housing. Under its proposed changes, Australians who rent or who have a mortgage would be able to divert a portion of their super payments as salary for up to three years, while still enjoying the concessional tax rate of 15 per cent.   
 
The response from the industry has been fairly predictable. The policy is “unfair and unpopular”, “economically disastrous” and would make people “poorer in retirement” –  and that’s all in just one press release from the Association of Superannuation Funds of Australia. In a somewhat less loquacious offering, the Super Members Council says the policy will turn “super into an ATM” and “drive up inflation”.  
 
Maybe the policy will be economically disastrous and make people poorer in retirement. But over the years, a few subversives have said that the industry needs to get better at engaging with ‘attacks’ on preservation – such as super for housing, or suggestions that maybe people don’t need 12 per cent of their income put aside for future consumption – rather than just shouting them down.  
 
This need has only been heightened by the rise of populist parties around the world, which define themselves by opposition to paternalistic elite classes. Through that lens, the repeated insistence by funds and politicians that they know what’s best for superannuants risks blowing up in their face. Dogmatic rejections of the use of super for anything other than retirement may sit uneasily with an electorate doing it tougher on pretty much every metric. 
 
It’s an uncomfortable and unacknowledged fact that the superannuation system is paternalistic, and for good reason; most people are pretty bad at managing their own money. But if funds and their representatives want to keep their social licence as populism weaves itself through, they’ll have to get better at reading the national mood.