In a report, Building Australia: Super investment initiative, the ISN outlined an initiative that could see $15 billion of new money invested in infrastructure over the next five years.
“As not-for-profit funds with no shareholders demanding short-term results, we can patiently invest in real world assets that deliver superior, stable long-term returns to our members - and economic benefits for the whole country,” ISN chair Steve Bracks said.
“And as the nation’s superannuation assets increase through population growth and the increase in the super guarantee, we stand ready to do even more.
“Industry super funds alone expect to invest up to $15 billion of new money in infrastructure over the next five years.”
The ISN has already invested in domestic infrastructure with the $5 billion acquisition of Port Botany and Port Kembla announced in April this year.
To further invest in Australia’s infrastructure, the ISN said four obstacles need to be addressed, including the liquidity management of super funds, a continued pipeline of infrastructure projects, and new financing models elevating the role of long-term owners.
There also needs to be a recognition by governments and the public that some projects are best financed by the sale of existing public infrastructure to responsible owners like super funds, according to the ISN report.
Community unease about the sale of public infrastructure was also earmarked by the ISN as a cause of concern.
It said superannuation funds have “the potential to cut through community concerns about private ownership and potentially change the game”.
“As proven responsible, long-term investors, industry super funds are uniquely placed to help state government develop new and existing assets and address community concerns,” Mr Bracks said.
The report noted that with the cost of traffic congestion alone estimated to double to $20 billion by 2020, the opportunity for super funds to invest in infrastructure is huge.
“With Australia’s total superannuation pool at $1.6 trillion, if all other super fund followed our lead, there would be $100 billion available in the next five years for nation building infrastructure,” ISN deputy chair Peter Collins said.
“As the benefits of the mining boom recede, tapping into the potential of superannuation will be key to the nation’s economic fortunes.”
