Removing the impediments that stall superannuation fund investment in infrastructure assets should be a key focus of this year's Federal Budget, according to the Association of Superannuation Funds of Australia (ASFA), which released its pre-Budget submission today.
ASFA CEO Ms Pauline Vamos says there is a package of measures the Government could adopt to help facilitate super fund investment in infrastructure and other long-term projects.
“Super funds have a strong appetite to invest in infrastructure assets, but only if the investment mix reflects value for fund members and delivers on the sole purpose test of providing benefits to members, under which the system was established. As the country's infrastructure needs continue to grow, it's crucial the Government addresses the impediments that hinder super fund investment in this asset class.
“Let's not forget that when infrastructure assets are sold to a superannuation fund, they remain in the community's hands and become a valuable part of delivering better retirement outcomes for fund members.”
Ms Vamos says the single most important way to facilitate super fund investment in infrastructure is to develop a pipeline of investable projects.
“This would give super funds and other long-term investors the confidence to develop infrastructure bidding teams," says Ms Vamos.
“Bidding costs is another area where significant improvement is required in order to help match superannuation savings to infrastructure projects. At present, the bid costs in Australia are among the highest in the world. Streamlining bid processes would help drive these costs down, creating a more favourable environment for super funds to invest.
“While ASFA does not support the introduction of new tax concessions that could distort the market, what we do need is stability in the current taxation arrangements that support infrastructure. This would provide the super industry with the certainty required to increase its investment in the nation's infrastructure projects.
“What we do support is the removal of red-tape processes that add cost and complexity to infrastructure financing arrangements," Ms Vamos concluded.
For a copy of ASFA's pre-budget submission, click here.
For further information, please contact:
Lisa Chikarovski, Media Manager, 0451 949 300.
ASFA is the peak policy, research and advocacy body for Australia's superannuation industry. It is a not-for-profit, sector-neutral, and non-party political national organisation, which aims is to advance effective retirement outcomes for members of funds through research, advocacy and the development of policy and industry best practice.