March 5, 2025 • 18 mins
Our A$4.1 trillion of superannuation funds are searching the globe for new places to invest our money even as tariffs and wars continue to create mayhem in financial markets. Host Rebecca Jones asks Bloomberg superannuation reporter Amy Bainbridge: where are our retirement savings being invested both globally and at home, and what’s keeping the super fund chiefs awake at night?
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Speaker 1 (00:02):
We are following breaking news. All three major American stock
markets have closed down for the day after President Trump
took questions about tariffs going into effect tomorrow against Mexico
and Canada and new tariffs coming against China.
Speaker 2 (00:15):
You're gambling with world War three.
Speaker 3 (00:18):
You're gambling with World War three.
Speaker 2 (00:21):
We are just weeks into the second Trump administration and
it already feels like we're living in a very different
world than we were at the start of twenty twenty five.
What does all this uncertainly mean for our superfunds and
the money they're managing on our behalf? Hello, I'm Rebecca Jones.
Welcome to the Bloomberg Australia Podcast. This week, our superannuation
(00:44):
industry already has a massive four point one trillion dollars
of assets. It's growing so fast it's forecast to become
the second largest in the world by as soon as
twenty thirty. But what will it look like for you
and me as members of those funds, and how are
the guardians of our retirement savings adapting their investments in
(01:06):
a time of rapid global change. To help me answer
that and more, is Bloomberg Star superannuation reporter Amy Bainbridge.
Welcome back to the podcast, Amy, Thanks beck Amy. We
know there's billions of dollars of our money pouring into
super Where is our superannuation money likely to be invested
in twenty twenty five?
Speaker 3 (01:28):
You're right, Beck, inflows are huge and they're only getting bigger.
And it's worth remembering that the superannuation guarantee is actually
going up to twelve percent in July this year, so
that's where it's going to top out. But this the
money coming in, we're talking about billions and billions of dollars.
I've spoken to a number of CIOs and CEOs over
the past couple of months. Look, it won't surprise you
(01:50):
that there is a really big focus in offshore markets
and also in private markets as well. That's the stuff
that's not in the listed markets as we know it.
Big funds like Aware, Super Australian Retirement Trust, UNI, Super
Colonial First State, they're all looking to increase their unlisted
markets exposure in twenty twenty five. Some are looking to
get back into property. Infrastruction is another big one. That
(02:14):
might be anything from data centers to batteries, to airports
to toll roads, and they're long term investments that will
make a good amount of money for them along the way.
Speaker 2 (02:24):
So on the topic of private markets, the Australian Securities
and Investments Commission otherwise known as ASSEK, has had a
bit to say about that recently, haven't they. Let's take
a quick listen to what ASSEK chair Joe Longo said
on Bloomberg TV about this last week.
Speaker 4 (02:40):
We want our superannuation funds to be investing globally and locally,
and about depending on which fund you're talking about, between
a quarter and a fifth of their AUM are in
private markets. They're in a private not listed assets, and
so we're not We don't want to discourage that. We
(03:01):
want to understand it. And there's been some talk in
this sector of froftiness in the private markets, and we
want to understand whether that's an emerging issue or creating risks.
Speaker 2 (03:15):
Amy what are our six key concerns about super being
pumped into these unlisted markets.
Speaker 3 (03:22):
Concerns have been swirling for years really, and mainly it's
about the opaque nature of private markets. So of course,
in public markets you can see what a company is
worth every day that there's public trading, But in private
markets there's been concerns about how frequently assets are being
valued and who is doing those valuations as well. So,
in a really basic sense, if you're someone who's taking
(03:44):
out your superannuation today, your super will be worth a
certain amount and it's quite I guess a formula behind
that known as unit pricing. That's not something we'll go
into necessarily today. But say you have someone you're withdrawn today,
you get your money out. But if you're a younger
member in for the long haul, what if the asset
that you're invested in hasn't been valued accurately, does that
(04:05):
mean that you might be in a disadvantage in the
long term. So that's one of the key questions the
regulators kind of talked about the frothiness of private markets.
I mean, how do you really know if it's super
fund is perhaps paying too much and really just not
having true visibility over how they're valuing things at certain
(04:26):
times and how frequently. ACIK and ORO are, the regulator
for the superannuation market, both been speaking about this for
some time, and now there's been a discussion paper released
from ACID trying to really get some good ideas around
the private markets itself, but also what's turning some of
these big investors off the public markets. Are there some
(04:47):
regulatory settings for example, that should be tweaked to make
those more appealing?
Speaker 2 (04:52):
And what did they find? What were those key takeaways
from that most recent report.
Speaker 3 (04:57):
Basically, what they're saying is that with this content centration
and fewer super funds, it can be really hard to
make like for like comparisons in terms of whether they're
overpaying in the private market space compared with public markets
because of the lack of public reporting by private capital
funds for example. So you know performance is often measured,
(05:18):
will really measure after funds have been returned to investors,
which you know can take eight to twelve years, they
say so, And then there's the fee issue within that
as well. So there's a whole bunch of issues that
you know, ACIK is really examining to make sure that
the markets are running effectively and that they're as transparent
as they can be, not just for them, but for
(05:39):
consumers as well.
Speaker 2 (05:41):
So as I understand it, if you had a listed asset,
let's use just for argument's sake, like Domino's Pizza, which
is a listed fast food company, you can't really compare
their business and how their value to a private franchise
of shops. It's not a like for like thing. There
(06:02):
essentially needs to be a whole new methodology created by
regulators like ASEK and APRA to value these assets.
Speaker 3 (06:10):
This is kind of the other point that's made in
the report is that markets globally are probably a little
bit further down the track than Australia when it comes
to having these processes in place. This is something that
the US, for example, they say it was looking at
like ten years ago, so you know, we in some
ways are playing catch up. But also if you look
(06:31):
at any changes that might need to come into effect,
it probably won't be much of a stretch. You'd have
to think for some of the biggest funds who are
already investing privately overseas to then have their reporting requirements
potentially change here at home as well. So I think
it will be really interesting, I guess, to see what
comes out of this. But certainly the regulators have repeatedly
(06:55):
spoken about this issue, and so it finally seems like
they're really trying to get some action because they're not
particul really happy with the way things are running.
Speaker 2 (07:01):
At the interesting I want to pick up a little
on what you said there about super funds investing overseas,
And one theme that I have seen come up a
fair bit in your coverage of super funds, Amy, is
their ambition to go global. We've just seen this super
summit happening in the US now that involved some ten
Aussie super funds in a road show of sorts across Washington,
(07:25):
DC and New York. The point of it being to
showcase their desire to increase investment in US infrastructure and assets.
Why is it important, Amy, for these big super funds
with all this money to host these kind of events.
Speaker 3 (07:40):
So geographically we are such a long way from the
key investment market. So what we have seen is, you know,
the top funds in Australia have actually opened offices, so
they've got people employees on the ground in New York
and London and other cities around the world.
Speaker 2 (07:54):
That's number one.
Speaker 3 (07:55):
And one of the things that is a challenge is
that even though we've got a ton of capital here,
we don't have great brand recognition in some of those markets.
So when you're trying to employ really great people, you
need to have competitive salaries but also some brand recognition.
So having offices in those markets is key and developing
then through those officers contacts to get access to deals
(08:17):
in a hugely competitive marketplace. You know, for example, the
Middle Eastern sovereign wealth funds, they're now global players. They're
chasing deals that you know, they may be competitors to
our Aussie super funds, so it's really important that you
have a presence. Even this week, Steve Schwarzman from Blackstone
said that he'd met with the nine super funds and
then the Future Fund, which is our sovereign wealth fund
(08:40):
over there, noting that our industry is booming, and the
delegation that was over in the States, they spoke with
two Trump Cabinet secretaries, three state governors, and a whole
bunch of investment leaders. And really it's about the opportunities,
but it's about being known so you're getting access to
them those deals. Already, there's four hundred billion dollars invested
(09:03):
in the US. Research released around the time of this
summer says that that is projected to grow to a
trillion dollars invested in the US by twenty thirty five.
So it is a huge amount of capital and it
also speaks to the fact that we have in some
ways the industry has in some ways outgrown our domestic markets.
So they're really hunting for those opportunities. But you've really
(09:24):
got to be front and center over there to get
access to the best deals.
Speaker 2 (09:28):
And what are these super funds? These as these super
funds telling you about how they're navigating this new Trump administration.
You know I mentioned right at the start, and also
you know these various market ructions that we're seeing come
from that.
Speaker 3 (09:42):
Yeah, it's interesting because you speak to the funds and
they say, look, we are long term investors, we can't
worry too much. But I mean you have to be
you know, you have your head under a rock to
not be thinking about how this environment is going to
play out, because we're talking four years, we're not talking
four months. It's one thing they've said to me repeatedly
(10:02):
is that they're bracing for more volatility. So we had
Kelly Power, the CEO of Clonial First States Superannuation Business,
on Bloomberg TV this week. She said, you know, it's
not our first rodeo with volatility, but one of the
real challenges is keeping members calm and not thinking that
they need to switch their investment options, you know, in
(10:23):
reaction to things. So there's that, there's the member element
of it, but there's also the investment decisions that you
make as well. There's challenges, including currency fluctuation, because even
if you're investing overseas, you still need to pay out
eventually in Ossie dollars. So a lot of funds have
said that they're seeking a bit of protection from those
kinds of things. And we had a story recently about
(10:45):
some of the big funds being attracted more to Aussie
bonds due to their haven qualities and the interest rate
cut prospects here in Australia and sort of that added
protection against a global economic downturn. So it is really
interesting that some now looking a little bit inward as well,
while they are kind of still focusing on the overseas markets,
(11:05):
but sort of seeking that local protection to ensure that,
you know, they can ride out this period.
Speaker 2 (11:12):
Yeah, it does seem that Australia is looking pretty appealing
though to these funds. Is it an element of the
protection that you just mentioned that explains this tendency.
Speaker 3 (11:25):
So one of the things that one coo said to
me was Australia and this was I guess kind of
before we had some of the tariff back and forth,
which has evolved over the last month or six weeks
or so, but they were seeking protection outside the direct
firing line of any trade war. Now, I mean, I
guess your perspective on that depends who you would speak to.
(11:47):
But you know, Australia is still seen as a very
safe market with very good governance, and the funds will
repeatedly say there is opportunities in the electrification of Australia,
so the renewable energy piece where that we need you know,
better power infrastructure for example, data centers locally, we've already
(12:10):
seen some of those deals. And there's other things as well,
you know, warehouses. That's another big trend. You know, with
the online shopping phenomenon, there's different needs now for warehouses
to be closer to consumers, so the delivery times are shorter.
So these are all the kinds of assets locally that
are pretty safe and deliver you know, pretty good long
(12:31):
term returns, they would say. And on top of that,
we already know that some of the biggest super funds
are significant stakeholders in airports, for example in Australia as well,
so they'll all tell you it's about that sort of
real diversification, probably more than ever, right because we know
that last year, for example, was a great year on
(12:52):
the stock market. Everyone did very well out of that.
But how much longer has that got to run? What
else can we do to make sure those returns keep flowing?
And it does look quite the domestic.
Speaker 2 (13:01):
Markets for it's feeling it's a never ending search. We've
talked about home and aways, both good destinations for our
precious superannuation accounts. But when we come back, Amy, we'll
talk about how our nest eggs might feature in the
upcoming federal election. You're listening to the Bloomberg Australia Podcast,
(13:26):
and welcome back to the Bloomberg Australia Podcast. You're here
with me, Rebecca Jones and Amy Bainbridge, who covers our
four trillion dollar superannuation system here from Bloomberg's Melbourne bureau. Amy,
how likely is it do you think that superannuation is
going to feature prominently in the upcoming election campaign.
Speaker 3 (13:47):
What we know is that housing and housing affordability and
the cost of living are huge issues and one thing
that the Coalition has already put quite family on the
agenda is this talk of of using superannuation money for
a home deposit. So if elected, the Coalitioners said they
will allow Australians to access up to fifty thousand dollars
(14:10):
for a deposit. Now, the industry is vehemently opposed to this.
They put out various pieces of research saying that it
would simply inflate house prices.
Speaker 2 (14:20):
I guess it remains to be.
Speaker 3 (14:22):
Seen how much this will feature in the campaign, but
housing affordability is really such a hot button issue and
it is frustrating for people, you know, who feel they
could enter the market if their money wasn't locked away.
And we also know through various parts of research, including
from the Gratin Institute, that renting in retirement is a
real issue for a lot of people who haven't been
(14:44):
able to buy a home. So that's kind of the
goal of the Coalition's policies to get people into their
own homes and alleviate that cost of living burden in
retirement somewhat. I guess we'll see how much how big
a feature it becomes in the election campaign, but I
do suspect it will be quite an important talking point,
something that resonates with a lot of possibly younger voters
(15:04):
or people who are possibly mid career that have a
decent nest egg saved up and they wish that they
could use some of it for housing.
Speaker 2 (15:12):
What about Anthony Albanisi and the Australian Labor Party, what
have they been saying about the future of superannuation in
what we've had so far, mindful that we don't have
an election date yet.
Speaker 3 (15:24):
During this term of government, Labor has legislated the purpose
of super and that's really to try and stop those
kinds of I guess raids on the system they would
say to happen in the future. So I think you
can see from that that the two sides are diametrically
opposed and that is why it could become a bit
of a flashpoint in the election campaign because their world's apart.
(15:48):
And you have to remember that the superannuation system was
largely born out of the Labor movement, the union movement
and set up as compulsory by the Labor Party, so
they really see it as a labor legacy they're very
proud of. The Coalition has said that they do think
it's unfair that, you know, people just can't touch the
money that they rightfully are entitled to until they retire.
Speaker 2 (16:11):
So the super funds have gone out of the gate
strong straight into spooking for business in the US. They're
also pretty keen on balancing that with some opportunities at home.
We've seen our two regulators, ASK and APRA come good
with some words on paper to start formalizing the tricky
business of valuing private assets. Consolidation in the super industry
(16:33):
is also adding to the complexity they're on the political front.
We've got Peter Dutton, the contender, on one side, saying
super for houses, and Alban EASi on the other saying, hey,
let's keep that money for the purposes it was originally
intended for. Amy. Finally, what is next on the calendar
for us to be watching in the superspace?
Speaker 3 (16:55):
Okay, so we have a few key industry events coming out,
but I guess the xping news will be you know,
at the end of the financial year. A lot of
the super funds have become quite public around their results,
particularly when they have really good years. We did see
some really strong results in the middle of last year,
and it will be interesting to see how a lot
of them form this year. So that'll be around the midyear,
(17:17):
and it will be good.
Speaker 2 (17:18):
To do it good.
Speaker 3 (17:19):
I guess to get a gauge on how much the
stock markets are still fueling strong returns or whether there
are other factors at play by then that are impacting
that final number.
Speaker 2 (17:30):
And we'll be following along. Amy Bainbridge, thank you and
thank you for listening to the Bloomberg Australia Podcast Time
Rebecca Jones. This episode was recorded on the lands of
the Runderi people of the Call of Nation. It was
produced by Paul Allen and edited by Chris Burke and
Ainsley Chandler. Don't forget to follow and review the show
wherever you get your podcasts, and sign up for Bloomberg's
(17:51):
free daily news set Out Australia Briefing. Go to Bloomberg
dot com to subscribe.
We are following breaking news. All three major American stock
markets have closed down for the day after President Trump
took questions about tariffs going into effect tomorrow against Mexico
and Canada and new tariffs coming against China.
Speaker 2 (00:15):
You're gambling with world War three.
Speaker 3 (00:18):
You're gambling with World War three.
Speaker 2 (00:21):
We are just weeks into the second Trump administration and
it already feels like we're living in a very different
world than we were at the start of twenty twenty five.
What does all this uncertainly mean for our superfunds and
the money they're managing on our behalf? Hello, I'm Rebecca Jones.
Welcome to the Bloomberg Australia Podcast. This week, our superannuation
(00:44):
industry already has a massive four point one trillion dollars
of assets. It's growing so fast it's forecast to become
the second largest in the world by as soon as
twenty thirty. But what will it look like for you
and me as members of those funds, and how are
the guardians of our retirement savings adapting their investments in
(01:06):
a time of rapid global change. To help me answer
that and more, is Bloomberg Star superannuation reporter Amy Bainbridge.
Welcome back to the podcast, Amy, Thanks beck Amy. We
know there's billions of dollars of our money pouring into
super Where is our superannuation money likely to be invested
in twenty twenty five?
Speaker 3 (01:28):
You're right, Beck, inflows are huge and they're only getting bigger.
And it's worth remembering that the superannuation guarantee is actually
going up to twelve percent in July this year, so
that's where it's going to top out. But this the
money coming in, we're talking about billions and billions of dollars.
I've spoken to a number of CIOs and CEOs over
the past couple of months. Look, it won't surprise you
(01:50):
that there is a really big focus in offshore markets
and also in private markets as well. That's the stuff
that's not in the listed markets as we know it.
Big funds like Aware, Super Australian Retirement Trust, UNI, Super
Colonial First State, they're all looking to increase their unlisted
markets exposure in twenty twenty five. Some are looking to
get back into property. Infrastruction is another big one. That
(02:14):
might be anything from data centers to batteries, to airports
to toll roads, and they're long term investments that will
make a good amount of money for them along the way.
Speaker 2 (02:24):
So on the topic of private markets, the Australian Securities
and Investments Commission otherwise known as ASSEK, has had a
bit to say about that recently, haven't they. Let's take
a quick listen to what ASSEK chair Joe Longo said
on Bloomberg TV about this last week.
Speaker 4 (02:40):
We want our superannuation funds to be investing globally and locally,
and about depending on which fund you're talking about, between
a quarter and a fifth of their AUM are in
private markets. They're in a private not listed assets, and
so we're not We don't want to discourage that. We
(03:01):
want to understand it. And there's been some talk in
this sector of froftiness in the private markets, and we
want to understand whether that's an emerging issue or creating risks.
Speaker 2 (03:15):
Amy what are our six key concerns about super being
pumped into these unlisted markets.
Speaker 3 (03:22):
Concerns have been swirling for years really, and mainly it's
about the opaque nature of private markets. So of course,
in public markets you can see what a company is
worth every day that there's public trading, But in private
markets there's been concerns about how frequently assets are being
valued and who is doing those valuations as well. So,
in a really basic sense, if you're someone who's taking
(03:44):
out your superannuation today, your super will be worth a
certain amount and it's quite I guess a formula behind
that known as unit pricing. That's not something we'll go
into necessarily today. But say you have someone you're withdrawn today,
you get your money out. But if you're a younger
member in for the long haul, what if the asset
that you're invested in hasn't been valued accurately, does that
(04:05):
mean that you might be in a disadvantage in the
long term. So that's one of the key questions the
regulators kind of talked about the frothiness of private markets.
I mean, how do you really know if it's super
fund is perhaps paying too much and really just not
having true visibility over how they're valuing things at certain
(04:26):
times and how frequently. ACIK and ORO are, the regulator
for the superannuation market, both been speaking about this for
some time, and now there's been a discussion paper released
from ACID trying to really get some good ideas around
the private markets itself, but also what's turning some of
these big investors off the public markets. Are there some
(04:47):
regulatory settings for example, that should be tweaked to make
those more appealing?
Speaker 2 (04:52):
And what did they find? What were those key takeaways
from that most recent report.
Speaker 3 (04:57):
Basically, what they're saying is that with this content centration
and fewer super funds, it can be really hard to
make like for like comparisons in terms of whether they're
overpaying in the private market space compared with public markets
because of the lack of public reporting by private capital
funds for example. So you know performance is often measured,
(05:18):
will really measure after funds have been returned to investors,
which you know can take eight to twelve years, they
say so, And then there's the fee issue within that
as well. So there's a whole bunch of issues that
you know, ACIK is really examining to make sure that
the markets are running effectively and that they're as transparent
as they can be, not just for them, but for
(05:39):
consumers as well.
Speaker 2 (05:41):
So as I understand it, if you had a listed asset,
let's use just for argument's sake, like Domino's Pizza, which
is a listed fast food company, you can't really compare
their business and how their value to a private franchise
of shops. It's not a like for like thing. There
(06:02):
essentially needs to be a whole new methodology created by
regulators like ASEK and APRA to value these assets.
Speaker 3 (06:10):
This is kind of the other point that's made in
the report is that markets globally are probably a little
bit further down the track than Australia when it comes
to having these processes in place. This is something that
the US, for example, they say it was looking at
like ten years ago, so you know, we in some
ways are playing catch up. But also if you look
(06:31):
at any changes that might need to come into effect,
it probably won't be much of a stretch. You'd have
to think for some of the biggest funds who are
already investing privately overseas to then have their reporting requirements
potentially change here at home as well. So I think
it will be really interesting, I guess, to see what
comes out of this. But certainly the regulators have repeatedly
(06:55):
spoken about this issue, and so it finally seems like
they're really trying to get some action because they're not
particul really happy with the way things are running.
Speaker 2 (07:01):
At the interesting I want to pick up a little
on what you said there about super funds investing overseas,
And one theme that I have seen come up a
fair bit in your coverage of super funds, Amy, is
their ambition to go global. We've just seen this super
summit happening in the US now that involved some ten
Aussie super funds in a road show of sorts across Washington,
(07:25):
DC and New York. The point of it being to
showcase their desire to increase investment in US infrastructure and assets.
Why is it important, Amy, for these big super funds
with all this money to host these kind of events.
Speaker 3 (07:40):
So geographically we are such a long way from the
key investment market. So what we have seen is, you know,
the top funds in Australia have actually opened offices, so
they've got people employees on the ground in New York
and London and other cities around the world.
Speaker 2 (07:54):
That's number one.
Speaker 3 (07:55):
And one of the things that is a challenge is
that even though we've got a ton of capital here,
we don't have great brand recognition in some of those markets.
So when you're trying to employ really great people, you
need to have competitive salaries but also some brand recognition.
So having offices in those markets is key and developing
then through those officers contacts to get access to deals
(08:17):
in a hugely competitive marketplace. You know, for example, the
Middle Eastern sovereign wealth funds, they're now global players. They're
chasing deals that you know, they may be competitors to
our Aussie super funds, so it's really important that you
have a presence. Even this week, Steve Schwarzman from Blackstone
said that he'd met with the nine super funds and
then the Future Fund, which is our sovereign wealth fund
(08:40):
over there, noting that our industry is booming, and the
delegation that was over in the States, they spoke with
two Trump Cabinet secretaries, three state governors, and a whole
bunch of investment leaders. And really it's about the opportunities,
but it's about being known so you're getting access to
them those deals. Already, there's four hundred billion dollars invested
(09:03):
in the US. Research released around the time of this
summer says that that is projected to grow to a
trillion dollars invested in the US by twenty thirty five.
So it is a huge amount of capital and it
also speaks to the fact that we have in some
ways the industry has in some ways outgrown our domestic markets.
So they're really hunting for those opportunities. But you've really
(09:24):
got to be front and center over there to get
access to the best deals.
Speaker 2 (09:28):
And what are these super funds? These as these super
funds telling you about how they're navigating this new Trump administration.
You know I mentioned right at the start, and also
you know these various market ructions that we're seeing come
from that.
Speaker 3 (09:42):
Yeah, it's interesting because you speak to the funds and
they say, look, we are long term investors, we can't
worry too much. But I mean you have to be
you know, you have your head under a rock to
not be thinking about how this environment is going to
play out, because we're talking four years, we're not talking
four months. It's one thing they've said to me repeatedly
(10:02):
is that they're bracing for more volatility. So we had
Kelly Power, the CEO of Clonial First States Superannuation Business,
on Bloomberg TV this week. She said, you know, it's
not our first rodeo with volatility, but one of the
real challenges is keeping members calm and not thinking that
they need to switch their investment options, you know, in
(10:23):
reaction to things. So there's that, there's the member element
of it, but there's also the investment decisions that you
make as well. There's challenges, including currency fluctuation, because even
if you're investing overseas, you still need to pay out
eventually in Ossie dollars. So a lot of funds have
said that they're seeking a bit of protection from those
kinds of things. And we had a story recently about
(10:45):
some of the big funds being attracted more to Aussie
bonds due to their haven qualities and the interest rate
cut prospects here in Australia and sort of that added
protection against a global economic downturn. So it is really
interesting that some now looking a little bit inward as well,
while they are kind of still focusing on the overseas markets,
(11:05):
but sort of seeking that local protection to ensure that,
you know, they can ride out this period.
Speaker 2 (11:12):
Yeah, it does seem that Australia is looking pretty appealing
though to these funds. Is it an element of the
protection that you just mentioned that explains this tendency.
Speaker 3 (11:25):
So one of the things that one coo said to
me was Australia and this was I guess kind of
before we had some of the tariff back and forth,
which has evolved over the last month or six weeks
or so, but they were seeking protection outside the direct
firing line of any trade war. Now, I mean, I
guess your perspective on that depends who you would speak to.
(11:47):
But you know, Australia is still seen as a very
safe market with very good governance, and the funds will
repeatedly say there is opportunities in the electrification of Australia,
so the renewable energy piece where that we need you know,
better power infrastructure for example, data centers locally, we've already
(12:10):
seen some of those deals. And there's other things as well,
you know, warehouses. That's another big trend. You know, with
the online shopping phenomenon, there's different needs now for warehouses
to be closer to consumers, so the delivery times are shorter.
So these are all the kinds of assets locally that
are pretty safe and deliver you know, pretty good long
(12:31):
term returns, they would say. And on top of that,
we already know that some of the biggest super funds
are significant stakeholders in airports, for example in Australia as well,
so they'll all tell you it's about that sort of
real diversification, probably more than ever, right because we know
that last year, for example, was a great year on
(12:52):
the stock market. Everyone did very well out of that.
But how much longer has that got to run? What
else can we do to make sure those returns keep flowing?
And it does look quite the domestic.
Speaker 2 (13:01):
Markets for it's feeling it's a never ending search. We've
talked about home and aways, both good destinations for our
precious superannuation accounts. But when we come back, Amy, we'll
talk about how our nest eggs might feature in the
upcoming federal election. You're listening to the Bloomberg Australia Podcast,
(13:26):
and welcome back to the Bloomberg Australia Podcast. You're here
with me, Rebecca Jones and Amy Bainbridge, who covers our
four trillion dollar superannuation system here from Bloomberg's Melbourne bureau. Amy,
how likely is it do you think that superannuation is
going to feature prominently in the upcoming election campaign.
Speaker 3 (13:47):
What we know is that housing and housing affordability and
the cost of living are huge issues and one thing
that the Coalition has already put quite family on the
agenda is this talk of of using superannuation money for
a home deposit. So if elected, the Coalitioners said they
will allow Australians to access up to fifty thousand dollars
(14:10):
for a deposit. Now, the industry is vehemently opposed to this.
They put out various pieces of research saying that it
would simply inflate house prices.
Speaker 2 (14:20):
I guess it remains to be.
Speaker 3 (14:22):
Seen how much this will feature in the campaign, but
housing affordability is really such a hot button issue and
it is frustrating for people, you know, who feel they
could enter the market if their money wasn't locked away.
And we also know through various parts of research, including
from the Gratin Institute, that renting in retirement is a
real issue for a lot of people who haven't been
(14:44):
able to buy a home. So that's kind of the
goal of the Coalition's policies to get people into their
own homes and alleviate that cost of living burden in
retirement somewhat. I guess we'll see how much how big
a feature it becomes in the election campaign, but I
do suspect it will be quite an important talking point,
something that resonates with a lot of possibly younger voters
(15:04):
or people who are possibly mid career that have a
decent nest egg saved up and they wish that they
could use some of it for housing.
Speaker 2 (15:12):
What about Anthony Albanisi and the Australian Labor Party, what
have they been saying about the future of superannuation in
what we've had so far, mindful that we don't have
an election date yet.
Speaker 3 (15:24):
During this term of government, Labor has legislated the purpose
of super and that's really to try and stop those
kinds of I guess raids on the system they would
say to happen in the future. So I think you
can see from that that the two sides are diametrically
opposed and that is why it could become a bit
of a flashpoint in the election campaign because their world's apart.
(15:48):
And you have to remember that the superannuation system was
largely born out of the Labor movement, the union movement
and set up as compulsory by the Labor Party, so
they really see it as a labor legacy they're very
proud of. The Coalition has said that they do think
it's unfair that, you know, people just can't touch the
money that they rightfully are entitled to until they retire.
Speaker 2 (16:11):
So the super funds have gone out of the gate
strong straight into spooking for business in the US. They're
also pretty keen on balancing that with some opportunities at home.
We've seen our two regulators, ASK and APRA come good
with some words on paper to start formalizing the tricky
business of valuing private assets. Consolidation in the super industry
(16:33):
is also adding to the complexity they're on the political front.
We've got Peter Dutton, the contender, on one side, saying
super for houses, and Alban EASi on the other saying, hey,
let's keep that money for the purposes it was originally
intended for. Amy. Finally, what is next on the calendar
for us to be watching in the superspace?
Speaker 3 (16:55):
Okay, so we have a few key industry events coming out,
but I guess the xping news will be you know,
at the end of the financial year. A lot of
the super funds have become quite public around their results,
particularly when they have really good years. We did see
some really strong results in the middle of last year,
and it will be interesting to see how a lot
of them form this year. So that'll be around the midyear,
(17:17):
and it will be good.
Speaker 2 (17:18):
To do it good.
Speaker 3 (17:19):
I guess to get a gauge on how much the
stock markets are still fueling strong returns or whether there
are other factors at play by then that are impacting
that final number.
Speaker 2 (17:30):
And we'll be following along. Amy Bainbridge, thank you and
thank you for listening to the Bloomberg Australia Podcast Time
Rebecca Jones. This episode was recorded on the lands of
the Runderi people of the Call of Nation. It was
produced by Paul Allen and edited by Chris Burke and
Ainsley Chandler. Don't forget to follow and review the show
wherever you get your podcasts, and sign up for Bloomberg's
(17:51):
free daily news set Out Australia Briefing. Go to Bloomberg
dot com to subscribe.
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