Remove barriers to infrastructure investment, says FSC
The Government must remove a number of structural, regulatory and political issues that must be resolved before the $1.3 trillion in superannuation saving can be utilised to finance Australia's infrastructure needs, according to the Financial Services Council (FSC).
Ernst & Young has produced a report for the FSC which argues that the current 5-10 per cent allocation to infrastructure in superannuation funds can be improved if certain barriers to investment are removed.
These obstacles include a lack of a clear project pipeline and Government commitment; a lack of suitably structured projects for institutional investment; inconsistent, complex and expensive bidding processes; and regulatory pressures.
"The Government took the first steps in removing the barriers to ongoing investment in infrastructure in the Federal Budget this year," said FSC chief executive Jon Brogden.
The FSC/Ernst & Young report said further investment could be stimulated by using the existing Infrastructure Australia priority project list to create a pipeline of Government-sponsored projects. Recycling Government capital in infrastructure assets more efficiently and simplifying the bidding process would also help, according to the report.
"However, let's be clear - superannuation is not a cash cow to fund particular economic ills in Australia. A fund's first duty is to its members and ensuring investment returns are maximised," Brogden said.
AUTHOR
Recommended for you
As the government announces a public inquiry into the collapse of Dixon Advisory, risk adviser Richard Silberman has detailed the three areas that typically lead to an AFSL's collapse.
With a growing number of advisers now running their own business, they need to pivot their career identity to being a business owner rather than just as a financial adviser if they want to futureproof their business.
Zenith Investment Partners has launched a range of new managed account portfolios over the past quarter, including on Insignia Financial’s Expand platform.
The financial services technology firm has officially launched its digital advice and education solution for superannuation funds and other industry players.
