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Shadow Treasurer Mike Baird today called on the Rees Labor Government to tap into self-managed superannuation funds and build links with international fund managers as a means of financing the State’s infrastructure needs.
The recommendation emerged from an Infrastructure Financing Roundtable recently held by the NSW Liberals & Nationals as part of its plans to restore the State’s economy.
“Over the next 15 years it is forecast more than $560 million a week will be available in new capital from self-managed super funds*,” said Mr Baird.
“That’s enough funds raised in one week to build a brand new hospital, or raised in a month to build the South West rail link. Self-managed super funds could play a critical role in building NSW infrastructure.”
Mr Baird said Treasury should be looking at creating what could be called ‘Waratah Bonds’ – products that are low risk, inflation-matched and deliver long-term yields to make NSW infrastructure an attractive place to invest for self-managed super funds.
“Investors can currently buy T Corp Bonds, however these have not been structured specifically for infrastructure nor with self-managed super funds in mind.
“The opportunity exists beyond ‘Waratah Bonds’, it also extends to global trend,” Mr Baird said.
“It’s clear there is an increasing appetite for diversification in the Asia Pacific, the Middle East and European Pensioner Funds.
“NSW needs to be leading the charge for those funds rather than falling behind other States.”
Mr Baird said institutional investors were looking for infrastructure transactions that prioritise investor interests, which has been missing in NSW.
“The view amongst key superannuation players is that over the past few years there have been no wins on infrastructure in NSW and too many people burnt. Culturally there needs to be a political will to deliver on Public Private Partnerships – too many projects have been promised and then shelved years later.
“NSW Treasury needs to bring fund managers to the head table so we can start accessing some of the institutional funds for the State’s critical infrastructure needs.
“We know that domestic super funds are also looking globally – these dollars will go offshore if NSW does not become a more attractive place to invest.
“The Liberals & Nationals positive plan to create Infrastructure NSW would ensure every infrastructure announcement is delivered, and an independent body would determine projects based on the needs of the State,” said Mr Baird.
MEDIA: Lisa Harrington - 0406 726 880
*Rice Warner Actuaries table
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