Australians who spend hours fuming in traffic jams may hold the key to fixing congestion problems without even realising it.
We are now spending an average of 85 minutes per day simply getting to and from work, with traffic congestion estimated to cost Australia a staggering $16 billion per year in time, pollution costs and car operating costs, up 30 per cent from 2010, according to a 2015 report by the Bureau of Infrastructure, Transport and Regional Economics.
But the average Australian worker has the solution in their retirement fund.
Industry Super Australia says it has the money, the expertise, and the appetite for investing to help fix Australia’s bottlenecks and snarls.
Industry super funds – of which 50 per cent of Australian workers are members – expect to invest between $8 billion and $16 billion in infrastructure, including roads, by 2020.
In fact, if you’re a Melbourne or Sydney road commuter, chances are you are already enjoying a smoother ride to work thanks to road investment by an industry super fund.
Victoria’s East Link, and Melbourne Airport’s network of new internal roads were funded by industry super funds. In New South Wales, the Westlink M7 was the beneficiary of industry super funds.
Industry Super Australia Chief Executive David Whiteley said while current tender processes can be geared to short-term financiers who make money from upfront transaction fees, industry super funds are focused on long-term investment and are motivated to price projects accurately because they carry the risk and earn returns over the long life of an asset, making them a strong bet for infrastructure partnerships.
Using industry super fund investment in infrastructure can also help overcome community concerns about privatisation.
A 2013 Newspoll survey found support for privatisation of infrastructure rose from one in 10, to seven in 10 if the project was funded with super. That may be because it’s a clear win-win scenario for Australian workers.
Investment in infrastructure is a proven strategy, with its stable and predictable cash flows.
Infrastructure investments weathered the global financial crisis much more ably than stock market investments, and industry super fund members reaped the benefits.
Industry super funds have approximately 20 per cent of their investments in unlisted investments, including infrastructure, and between 1995 and 2015 the funds’ infrastructure investment arm delivered after tax returns of 11.5 per cent.
But the benefits don’t stop there.
When industry super funds invest in infrastructure such as roads, they not only improve many of their own members’ working lives and boost their retirement fund, they are also instrumental in creating new jobs.
As an example, NSW’s Westconnex project of 33 kilometres of motorways linking western and south-western Sydney to the city, airport and ports, is projected to result in 100,000 new jobs.
“It’s all part of what we call a ‘virtuous circle’,” Mr Whiteley said.
“There are no losers, only winners. Investing in Australian infrastructure not only earns solid returns for members but also helps to build real projects that are improving the lives of everyday Australians.”
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