Think superannuation is simply your nest egg for life beyond work? Think again.
Of the $30 billion poured into industry superannuation by working Australians every year, 20 per cent is funding important projects we rely on every day including major infrastructure projects.
This makes each dollar saved in industry super funds an essential investment in our community’s future.
Projects funded by industry super funds help Australia function faster, greener and safer, says Industry Super Australia senior policy advisor Jane McGill.
“Superannuation plays a very significant part in people’s lives and for our members, but it also plays a very important part for our economy more generally,” she says.
“As our population ages we’re going to need to lift our productivity performance and investing in infrastructure is one of the essential ways to achieve that.”
The average for all Australian super funds is just 1 per cent and globally, only 5 per cent of pension assets are invested in infrastructure projects, McGill says.
“What people don’t realise when they invest their money in a superannuation fund is that part of it’s going to end up in assets that they’re going to probably use in their day-to-day lives,” she says.
“It plays a very important role in both people’s lives and investment returns for members and in the economy more broadly.”
Industry superannuation funds invest in infrastructure developments in Australia, but also in Europe and the US.
Industry super assets are typically sunk into brownfield projects – initiatives involving the sale, redevelopment or management of existing facilities. However, super funds are beginning to invest more into greenfield projects – the development and management of a new asset with no operating history.
Projects include seaports, airports, roads, rail, electricity distribution, water treatment facilities, renewable energy and natural gas.
A prominent example is the 2013 privatisation of New South Wales’ Port Botany and Port Kembla. Both were leased by the New South Wales government for 99 years to a consortium of Australian and overseas investors, including Industry Funds Management (now known as IFM Investors and wholly owned by industry super funds), Australian Super and Queensland public sector superannuation fund, QSuper.
The deal earned $4 billion in revenue to be recycled by the NSW Government into new greenfield infrastructure, including major road upgrades.
Few Australian workers would realise their superannuation dollars are also powering projects in education, defence, the justice system, aged-care facilities and housing.
“Money put into industry super funds benefits members, the community and the economy,” McGill says.
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