“If the returns are not there, how can you compensate super funds for investing in an asset class when otherwise they would be investing somewhere else?” he asks. In addition to investment returns, infrastructure benefits super fund members by improving the general standard of living in society, he argues. For this reason, even uneconomical projects that are of use for society should be developed through PPPs, with governments guaranteeing investors a negotiated return. He reasons that without private investors, governments would be forced to build infrastructure with taxpayers’ money, and since taxpayers and fund members are one and the same, they will pay for infrastructure no matter what. They should, if possible, receive an investment return as well as infrastructure. Sicilia says the infrastructure demands of the nation – hospitals, schools, train lines, toll roads and the proposed national broadband network (NBN) – are too big for any entity on its own. “No single government or company can just write a cheque.

The ticket size is too big. It needs a collective of likeminded and like-liquid entities. “So what governments could do is sweeten the deal. One way of doing that is to provide a floor, a minimum return,” he says. This could be the same as long-term bond yields. “It de-risks the projects. If you were going to put money in bonds, why not invest in infrastructure instead? “We’re not in the business of deciding whether airports are better than power stations. They perform different functions in society, and in each case, society needs these assets to be civilised. And chasing offshore assets with better marginal returns is not a “smart” decision, he says. “It’s a financial one.” In September, when Sicilia publicly opined that super funds are unnecessarily hamstrung by fears of liquidity shortfalls, he questioned whether they could undertake further nation-building projects if they continued to be so wary of large, long-term illiquid investments.

He called for the creation of a ‘liquidity window’, functioning like the Reserve Bank’s cash window, so funds can more fully exploit unlisted investment opportunities without sacrificing their obligation to pay member benefits. “If I’m temporarily distressed, I can go to a liquidity window – and you know I’m good for the money. I’m getting contributions by law!” The superannuation system values liquidity as if it were gained from customers rather than compulsory participants, he says. But apart from mass unemployment, the contributions guarantee a consistent stream of cash. “It’s time to be a bit more innovative here. If we come across a regulatory hurdle, we should ask: ‘What’s the greater good? Should we change the law?’ “Provided these things are considered and debated, we can build Australia using pension money.

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