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Infrastructure investment could quadruple, report says

SUPERANNUATION funds' investments in infrastructure could jump more than fourfold to $200 billion by 2025, helping the country overcome bottlenecks caused by the mining boom, a new report says.

SUPERANNUATION funds' investments in infrastructure could jump more than fourfold to $200 billion by 2025, helping the country overcome bottlenecks caused by the mining boom, a new report says.

Amid questions over super funds' high exposure to shares, the Allen Consulting Group report says government policies and industry mergers are pushing funds towards backing infrastructure such as ports, roads and airports.

The report, commissioned by the Association of Superannuation Funds of Australia, said the $45 billion funds now held in infrastructure could hit $200 billion by 2025, based on industry growth projections.

After the recent wild ride for fund members caused by sharemarket volatility, the chief executive of the Association of Super Funds of Australia, Pauline Vamos, said this growth was a reminder of the "real investments" held by super funds.

She said mergers between funds and policy changes made infrastructure a more viable option.

"Large funds are much more able to invest in unlisted assets because they have the ability to keep more liquidity," Ms Vamos said.

Government plans to allow fund members to move into retirement "seamlessly" without selling assets had also encouraged funds to invest in infrastructure, she said. The budget has also provided a $200 million tax break designed to make infrastructure investment more attractive.

The report said the plan to increase employers' mandatory super contribution from 9 per cent to 12 per cent would add 0.33 per cent to the economy's size in 2025.


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