Productivity Commission releases draft report on public infrastructure

On 13 March 2014 the productivity Commission released a draft report on public infrastructure identifying a key role for superannuation in financing future Australian infrastructure projects.

The Productivity Commission stated how well the private sector (e.g. project finance and superannuation investment) is able to diversify risk among a large number of shareholders who in turn diversify their risks by owning a range of investments.  It drew a contrast with the government’s taxation revenue which is highly correlated to the domestic economy.

The Report has also highlighted that while Australia (together with Canada)  has one of the highest superannuation asset allocations to infrastructure in the world, at 5%,  it still remains a relatively minor component of their total portfolios.  An estimated total of just $63 billion in Australian superannuation (as at Dec 2013)  goes towards direct investment in infrastructure.

ASFA, which has urged the Government, in its pre-budget submission, to explore financial innovation to help stimulate the project finance market, has welcomed the draft report.

Click on the link to go to a copy of the Report: http://www.pc.gov.au/projects/inquiry/infrastructure/draft

 

 

Comments are closed.