ASFA backs privatised government assets

The Association of Superannuation Funds of Australia (ASFA) has come out in support of governments privatising assets, saying superannuation and pension funds are the natural holders of mature assets, including ports and energy assets. 

The move comes as Federal Treasurer Joe Hockey recently commented on removing tax impediments that deter state governments from privatising assets. 

ASFA CEO Pauline Vamos said that in their capacity as long-term investors, Australian superannuation funds aimed to achieve long-term sustainable investment returns. 

“Our interests align with those of the community and governments that are interested in ensuring that assets are managed responsibly for the long-term benefit of society,” Vamos said. 

ASFA said it backed the “recycling of capital model”, where governments use proceeds from asset sales to develop infrastructure assets where infrastructure investors hesitate to take on risk. 

A recent research report prepared for the Financial Services Council (FSC) by EY said the biggest barrier for investment in infrastructure by superannuation funds was a lack of suitable infrastructure projects. 

The “Superannuation investment in infrastructure: Steps to further efficiency” report showed super funds are prepared to invest in infrastructure projects that deliver an appropriate risk-weighted return for fund members. 

“There is no shortage of superannuation and pension funds that are looking to invest in infrastructure. There is only a shortage of projects to invest in,” Vamos said. 

“The key to unlocking pension capital is the maintenance of a stable regulatory environment, removing any impediments to states privatising assets and minimising transaction costs for funds.”