Conventional wisdom suggests that 3 per cent of Australian superannuation fund investment is in infrastructure, while it is believed that the experience overseas of super fund investment is closer to 5 per cent, a difference that suggests a significant under-investment in this country.

Broad numbers indicate that the average annual level of investment in infrastructure in Australia in order to produce GDP growth similar to what we have experienced in the past should be in the range of $15-25 billion per year, which needs to come from a mix of state, federal and private funds, of which super funds could make a significant contribution.

An audit may identify that we’re way behind, but one thing is certain: we’re not way ahead. The Federal Government’s $20 billion stretched out over five years is only $4 billion a year, leaving $11-$21 billion per year to come from the States or private funds. It is difficult but not impossible for super funds to play a meaningful role, but the industry has to get a lot smarter and more efficient.

Federal initiatives look okay on paper, but could be rendered meaningless if politics plays too much of a role. Certainly if some of the big picture issues identified here were addressed, perhaps the experience my client had would not have ended up as it did. When super funds currently report to APRA, investment in infrastructure is still listed in the ‘other’ column in industry statistics.

To encourage new money into the infrastructure industry, we need to win super fund investors over with a confident, professional, evidence-based approach. If this happens, a new asset class could emerge on the books of super funds and be made available to a wider group of investors.

Jim Bulling is a senior partner at Middletons, based in the firm’s Melbourne office and heading the banking and financial services division of the business. Working with superannuation and managed funds, Bulling specialises in matters concerning compliance, governance and disclosure.