It had to happen eventually.
Australia’s great pile of superannuation savings have clearly caught the eye of Treasurer Joe Hockey, who during yesterday’s Lowy institute speech, declared that the age of entitlements is dead and that the private sector needs to fill the breach with investments the Government can’t afford.
Hockey said that “the private sector is cashed up around the world. Governments are not. We need to facilitate that private sector investment.”
Eyeing you super he added: “The bottom line now is we need to recycle precious taxpayers’ money from existing assets that the private sector wants to own, that your superannuation is desperate to own.”
That’s code for “we’ll be selling what’s left of the farm”.
It’s a theme that we have heard often in Australia and while Hockey hasn’t yet suggested mandating Australia’s superannuation pool with a definitive amount to be invested in Australian infrastructure, the idea that Super Funds can buy assets and provide cash for the provision of services that governments cannot afford is certainly clear.
The key of course is that if the Government is really broke and can’t provide services and needs to sell assets, will the private sector be able to make enough of a return to make them attractive assets to invest in?
It’s not just about cash – it’s about return on investment and if it doesn’t make sense to the Government, then the big question is will it make sense to the private sector and Superannuation Trustees who will ultimately be called on to stand behind the decision to invest?
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