Australia Looks To Super Funds To Finance Infrastructure Projects

Post by Sharat on May 18, 2009 · Under Australian Economy, Business News, Super Funds, Wealth Management, investments · Comment 

A Federal Government consultative committee is looking at different methods of developing investment methods which would give super fund’s the ability to invest in infrastructure projects announced during last week’s budget, which would cover any shortfall that may occur.

Infrastructure Australia will pass on its recommendations to the government which is to include offering incentives to super funds to invest in public infrastructure projects.

The advisory group will be looking at proposals to turn infrastructure projects into public-private partnerships, which would allow super funds to accelerate tax depreciation, provide tax incentives and allow the government to sell super funds infrastructure bonds.

Such incentives would probably lead to fees such as toll roads and congestion charges to mitigate the profitability of public roads and railways.

Infrastructure Australia’s executive Director Brendan Lyon in an interview with The Australian Newspaper said that the amount of funding required for announced infrastructure projects was beyond what the government could reasonably provide.

“Australia has the fourth-largest pool of superannuation savings in the world, so we have to evolve to a model that harnesses this money to build infrastructure for the future. This must not mean treating superannuation as a piggy bank to be raided for infrastructure purposes through mandated levels of investment – super funds must always be invested on commercial terms and for commercial purposes,” Mr. Lyon said..

The Federal Government has apportioned a total of $22 billion over the next four years to finance infrastructure projects, which falls short of the total cost of $80 billion, according to figures compiled by KPMG.


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