The prudential watchdog has backed the Morrison government’s changes to the superannuation industry announced in last week’s budget, saying they will have a “substantial impact”.

But Labor is not so sure.

The government plans to change the way fees are charged on people’s super accounts, while setting an annual performance test for funds.

From July next year, super accounts will also follow Australians through their working life, rather than having one set up with each new job.

The government claims the package will save workers $17.9 billion over a decade.

Australian Prudential Regulation Authority deputy chair Helen Rowell says the budget proposals are very much aligned with the regulator’s agenda.

“If passed by the parliament, the ‘Your Future, Your Super’ package will shine a brighter light on fund performance and trustees’ expenditure decisions,” she said in a speech to an Australian Institute of Superannuation Trustees online forum.

“(They will) help members make better informed decisions about who is looking after their retirement savings.”

She said the package responds to key recommendations of both the Productivity Commission and the royal commission into the financial industry that have also informed APRA’s agenda.

Shadow assistant treasurer Stephen Jones said the changes all sound good at face value.

“But when you dig into the detail it doesn’t stack up,” he told reporters in Canberra.

He points out there are two sorts of fees – investment and administration – but the government is only going to benchmark the investment fee.

The Productivity Commission has found the difference in administration fees between a high and low-charging fund can be as much as $100,000 lost in retirement savings.

Mr Jones also believes the benchmarking system the government is setting up to test funds could discourage them from directly taking on long-term infrastructure investments.

“We are going to have the extraordinary situation where there might be more incentives for a sovereign wealth fund or the pension fund of other countries to invest in Australian infrastructure,” he said.

He also hopes workers don’t end up being stapled to a dud super fund for their entire career.

“They are sentencing that worker to poverty in retirement – they must get this right,” Mr Jones said.

“It just seems it is another example of the government making a big announcement but there is nothing in the the follow-through. On the face of it, this looks like a monumental stuff-up.”