Speaking alongside Crescent Wealth’s chief investment officer Jason Hazell in a webinar to the group’s members, Dr Hewson called for the government to provide support for super funds in the form of long-term sustainable asset classes to invest in.
Dr Hewson, who is a non-executive director on Crescent’s board, has proposed a 30- to 50-year government-guaranteed infrastructure bond, saying Australia needs to be doing more to ensure it has the infrastructure in place for its growing population and to support economic growth.
“Introducing a long-term infrastructure bond with a [government-guaranteed] coupon would be an attractive fixed-income investment for Australian super funds who collectively hold almost $3 trillion in capital, as well as many overseas investors,” he said.
“After steering Australia successfully through our most serious health crisis in a century, the [national cabinet] faces the daunting challenge of creating jobs and getting Australia back to work — issuing a government bond to generate billions of dollars of needed investment in value-add projects would help fast-track this.”
He added such a fund would need to be independently managed and have high levels of governance, along with a process for value ranking for carbon emissions and cost-benefit analysis for each project, so each development can be rated for priority.
“Without such a fund and ranking system, many needed large infrastructure projects will not be possible,” Dr Hewson said.
“For example, it is simply ridiculous that we are building a new international airport at Badgerys Creek in Western Sydney and there is no plan for a dedicated train line to Sydney city.
“We have to be doing more than [what] we are doing and do it in a commercially sensible way.”
Similarly, Crescent CIO Mr Hazell called for the government and industry to take a leadership position in developing investment vehicles that help rebuild the economy and are aligned with the objectives of the super system.
“Superannuation is a significant national asset. It should be protected to provide for the retirement of all Australians,” he said.
“The greatest opportunity for our nearly $3 trillion superannuation system is to align economy-building investment opportunities with the objectives of the system. This will serve the [long-term] national interest.
“An infrastructure bond would be a great first step.”
Crescent’s call for an infrastructure bond for the super funds to leverage has come after the Financial Services Council made a similar proposal in its recently published plan for the industry to help Australia rebound after the COVID-19 crisis.
FSC chief executive Sally Loane called the creation of new “Australian Superannuation and Infrastructure Investment Vehicles (ASIIVs)” the centrepiece of the body’s report.
Industry Super Australia also declared it would be investing “tens of billions” of dollars into Australia’s economic recovery, saying industry funds had more than $28 billion earmarked to expand infrastructure and property holdings.
