Australia’s lack of infrastructure investment amounted to nothing less than “intergenerational theft” at a time when the country has never been wealthier, according to Crescent Wealth’s managing director Talal Yassine.
Yassine has called on the Federal Government to break Australia’s cycle of underinvestment in infrastructure by underwriting local super fund investment in infrastructure and by using Islamic financing.
He said that close to a trillion dollars of additional infrastructure investment was needed to “future proof” Australia’s economic growth trajectory and future generations’ quality of life.
One obvious solution to this issue that Yassine proposed was to set up a hybrid public-private limited partnership under which the Federal Government could provide seed funding and use its large reserves to underwrite guaranteed minimum returns for necessary infrastructure projects, while the superannuation funds would syndicate the investments to their members.
“Member investors and all Australians would benefit now and well into the future from the government and superannuation funds taking the risks that each is best placed to take for the national good,” Yassine told the National Infrastructure Summit in Sydney this week.
“It would be a relatively quick fix to amend the legislative covenant requiring super funds to act in member’s ‘best interests’ to also include investing in projects that support Australia’s economic wellbeing.
“Isn’t improved infrastructure also in the best interests of superannuation fund beneficiaries?”
Yassine also suggested the growing regional and global Islamic finance market as another source of funding for Australian infrastructure.
“If Australia’s burgeoning superannuation industry cannot or will not invest in infrastructure for Australia’s future, Islamic finance investment should be seriously considered,” he said.
With global Islamic banking assets expected to reach about US$3.4 trillion globally this year, Yassine said only a very small fraction of this would be needed to provide Australian infrastructure with the “lifeblood” it needed.
