The Australian Institute of Superannuation Trustees has pushed for greater regulatory reform, in a bid to scale up super fund investment in infrastructure, energy and housing.
In a statement sent to state governments, relevant department heads and the National COVID-19 Coordination Commission, the AIST identified a range of investment opportunities which it says would contribute to growth, jobs and productivity in the COVID-19 economic recovery.
AIST chief executive Eva Scheerlinck said there was enormous potential in housing and energy in particular, but policy reform was needed to enable funds to invest on a larger scale.
Profit-to-member super funds have significant capital available to scale up investments in these areas moving forward, she said, with housing affordability of key concern given it is very difficult for Australians to enjoy a financially secure retirement without owning a home.
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"Barely a week goes by these days without one commentator or another suggesting that Australians should be allowed to tap into mandatory super savings to buy their first home," Scheerlinck said
"Aside from the negative impact this would have people's retirement incomes; it does nothing to address the root cause of Australia's housing affordability problem, which is lack of supply.
"Turning housing into an asset class that could provide institutional investors with a competitive return would not only be a watershed for housing affordability in this country, it would create jobs to assist the recovery while providing strong investment outcomes for the millions of Australians who invest through superannuation funds."
The AIST has also identified investment opportunity in the transition to "greener" energy and infrastructure.
This would help to create jobs and reduce energy demand through the green retrofitting of existing major building assets, particularly office buildings, Scheerlinck said.
"Profit-to-member super funds are already significant investors in many of Australia's major infrastructure and property assets and are well positioned to finance the green retrofitting of these assets," she said.
Green upgrades include behind-the-meter efforts to improve energy use in buildings, as well as water efficiency measures and better integration of energy storage facilities, she said.
"Superannuation funds would like to work with federal, state and local governments to address barriers and improve the viability of large-scale investment in these sustainability initiatives," Scheerlinck said.
"This includes exploring policy approaches that address variations in regulatory regimes across state and local government areas, and changes that allow both tenants and landlords to share the benefits from increased investment in sustainability upgrades of commercial premises."
Additionally, the AIST said the country's superannuation sector is ready to further contribute institutional capital to fund infrastructure projects.
Currently, this type of investment is limited by long project lead times and lengthy procurement processes, regulatory uncertainty (especially in renewables), and bid processes that are short-term or construction focused.
The trustee body believes these barriers can be overcome though a new public private investment approach that would involve early state consultation between governments and super funds to facility investment in infrastructure projects, as well as ensuring project structuring and risk allocation maximizes private sector investments.
The AIST also recommended that the government engage with project sponsors (including super funds) through an initial tender process, with sponsors bidding on an agreed risk allocation framework.
"By partnering with a long-term equity partner that will accept and manage interface risk, projects can be broken into smaller parts, enabling expedited investment for rapid job creation," Scheerlinck said.
"Given the need for rapid job creation, governments would also need to consider fast-tracking approvals, while maintaining the appropriate environmental and planning requirements."
Working together, the government and superannuation sector could help improve the economic outlook and investment outcomes for Australians, the AIST said.