July 2020

Superannuation has been the driving force behind much of Australia’s economic growth over the past decades having fuelled investment throughout the economy and building our robust financial services sector.

With the financial impact of Coronavirus spreading through the economy, Superannuation should play its role once again as a rebuilder. The Federal Government has already utilised super to stimulate the economy through the Early Release policy. Although the policy has drawn some criticism and is certainly not the ideal use of future retirement funds, small business owners and those most affected by the Coronavirus economic fallout will have benefited.

Former Future Fund CEO and current IFM Investors CEO David Neal has recently urged the government to reassess the process for significant infrastructure projects to allow for smaller contracts that could support Australian business’ tender for projects. Mr. Neal argued that dividing large nation building projects into smaller contracts could stimulate the economy by allowing Australian construction and services business’ access to projects that they would usually be squeezed out of during the tender process from larger international firms.

“We’re not asking for your money, we’re asking for the opportunity to contribute superannuants’ money. There are billions here that are ready to be deployed to support nation-building projects,” Mr. Neal said.

Damien Graham, Chief Investment Officer of First State Super noted recently that “As long-term investors, super funds offer a source of patient capital that may provide an alternative to support offered by governments and big financial institutions such as banks”.

All of this coincides with the growing push for Australia’s economic gradual decoupling from China. Superannuation funds provide the quality long term capital platform to fund such a move particularly in infrastructure and what would need to be a rebirth of the Australian manufacturing sector. Everyone will be able to benefit from the jobs growth and economic stimulus such investment would provide, as well as providing strong returns for fund members retirement into the future.