Victorian Premier Jacinta Allan has been slammed for suggesting Australians’ super should be used to fund more public infrastructure.
Ms Allan called for Australia’s $4.3 trillion super sector to contribute to public projects like schools and hospitals, telling The Australian Financial Review on Monday, “super are workers’ funds and workers need that productive infrastructure that super companies can invest in”.
The premier’s comments sparked backlash, with detractors claiming the debt-ridden Victorian government wanted to use super as a “slush fund” to prop up its spending.
Shadow Minister of Financial Services Pat Conaghan said the proposal was at odds with the fiduciary duty of super funds to grow their members’ savings.
“Jacinta Allan’s attempt at using hard-working Aussie’s super to bail her government out of its woeful economic mismanagement is as inappropriate as it is self-serving,” Mr Conaghan told news.com.au.
“Having blown the Victorian budget, she now wants to raid the retirement savings of every Australian.
“Super is your money – not Labor’s slush fund – and super funds have a legal duty to invest in the best financial interests of members, not to prop up failed governments.”
Mr Conaghan added that the Coalition “stands ready to protect your super from any attempt by any Government to use it for their own pet projects”.
Macrobusiness chief economist Leith van Onselen also condemened the “proposed raid” on super funds.
“Allan has basically admitted that the government is broke and cannot provide the infrastructure and services that it is responsible for to accommodate the state’s ballooning, immigration-fuelled population,” Mr van Onselen told news.com.au.
“Therefore, Jacinta Allan wants the private sector and superannuation funds to deliver what the state is supposed to do.
Super funds should “aim to achieve the highest possible investment returns and “not be used as a slush fund to satisfy political agendas”, Mr van Onselen said.
“Superannuation savings belong to Australian members, not the government.
“It is bad enough that our governments waste countless billions on boondoggle projects. They shouldn’t add Australia’s superannuation savings into the mix.”
AMP chief economist Shane Oliver said for the proposal to work, the infrastructure would have to actually generate returns.
He said super funds had been investing in infastructure projects for years where the risk-return trade-off was favorable.
“Super funds can only invest in such projects if it’s in the best interest of their members and where it won’t threaten their performance in the Annual Performance Test,” Mr Oliver said. “So it has to stack financially. It sounds more about the Victorian government seeking to find ways to encourage super funds to invest in state projects as opposed to coercing them in any way.”
Ms Allan made the comments to the AFR as she signalled her government was searching for more ways to partner with private investors.
“We’ll continue to look at PPPs (public-private partnerships) in those sectors that we know it works well in terms of hospitals and schools, particularly,” she said.
Victoria has a credit rating of AA, the lowest in the country.
The state’s net debt is forecast to grow to a record high of $194 billion by FY 2028-29, with cost blowouts on its four signature infrastructure projects — the Suburban Rail Loop, West Gate Tunnel, North East Link and Metro Tunnel — exceeding $65 billion.
The state’s Labor government has committed to reining in its infrastructure spending to $15.6 billion by FY 2028-29, after it reached a peak of $24 billion in FY 2023-24.
News.com.au has contacted Ms Allan’s office for comment.
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