What is the Australian Treasury's proposed overhaul of the superannuation performance test?

The Australian Treasury has released a consultation paper proposing changes to the "Your Future, Your Super" performance test to better accommodate high-growth, long-term investments.

Why is the government changing how super funds are tested?

Treasurer Jim Chalmers argues the current performance test serves as an impediment to national productivity by discouraging funds from backing venture capital and renewable energy.

Which specific sectors will benefit from the new "emerging and alternative assets" class?

The proposed changes specifically target venture capital (VC), early-stage startups, and renewable energy projects. By grouping these into a bespoke asset class, the government intends to provide superannuation trustees with the "investment air cover" needed to fund Australia’s energy transition and innovation sector.

How will the performance of these new asset classes be measured?

Instead of being measured against rigid commercial investment benchmarks, the "emerging and alternative assets" class will likely be assessed against inflation. This shift acknowledges that these investments have longer horizons and different risk profiles than listed equities or bonds.

What are the potential risks for superannuation members under this proposal?

While the Treasury claims the changes will "protect strong outcomes," a potential bear case is that moving away from strict commercial benchmarks could allow funds to hide underperformance in opaque "alternative" assets. Critics may argue that benchmarking against inflation rather than peer performance makes it harder for retail investors to judge if their fund is actually delivering top-tier returns.

How does this news affect retail investors and the Australian startup ecosystem?

For millennial and Gen Z investors, this could lead to super funds having higher exposure to private markets, venture capital, and local tech. If the proposal passes, it may increase the liquidity available for Australian startups and green energy companies, potentially boosting the domestic IPO pipeline over the medium term.

Is this overhaul a signal that super funds will become more speculative?

This is a matter of perspective; the government views it as modernizing rules to reflect a "modern economy," while others might see it as increasing risk. By easing the penalties for investing in high-growth startups and renewables, super funds may indeed take on more "alternative" risk.

What are the next key dates for the superannuation performance test changes?

The Treasury is currently in a consultation phase and is accepting feedback from stakeholders, industry leaders, and the public until mid-June 2026. Following the submission period, the government will review the feedback before drafting final legislation.

Treasury proposes super test overhaul to boost investment

Written by Isaac FrancisPublished May. 8 2026Last Updated May. 8 2026

The Treasury has released a consultation paper detailing a proposed overhaul of the superannuation performance test.

Treasurer Jim Chalmers is spearheading the adjustments to address long-standing concerns that the current "Your Future, Your Super" framework inadvertently penalises funds for backing high-growth, long-term sectors.

By introducing a dedicated "emerging and alternative assets" class, the proposal seeks to carve out a bespoke space for venture capital, startups, and renewable energy projects.

Treasury’s paper argues that these sectors have been historically underserved because current benchmarks fail to recognise their "materially different risk and return profiles" and extended investment horizons.

Under the new model, this asset class would be measured against inflation rather than rigid commercial benchmarks, providing trustees with the flexibility to support Australia’s energy transition and tech sector without the immediate threat of failing the annual performance test.

Chalmers emphasised that modernising these rules is essential to removing impediments to new investment and boosting sluggish national productivity.

The department maintains that the changes will "protect strong outcomes for members" while ensuring the test’s long-term stability.

Stakeholders and industry leaders have until mid-June to provide feedback on the proposed framework.