Should our Retirement Savings be used to fund Nation Building projects such as housing and infrastructure? This has become a hot topic in the past week since the Australian Treasurer announced this very policy. And you can understand why… Australia has a shortage of housing, increasing government debt, and a retirement savings pool of over $3 trillion. That capital needs to find a home, so why not invest the money in a way that can benefit the country?
Certainly, the rapidly growing Build To Rent (BTR) Industry now provides a framework for Superannuation Funds to invest in Residential Property at scale. Build To Rent will provide super funds with a stable and growing income stream which can be increased and optimised using Dynamic Pricing techniques. This will provide diversification away from other income streams which carry risks such as Retail Property which is slowly being disrupted by e-Commerce, and Office Property and Toll roads which are being affected by more employees working from home.
So the important question is: Should superannuation funds be forced to allocate a given proportion of their capital to such nation building projects? In my opinion, this sets a dangerous precedent and isn’t fair. The $3 trillion in super belongs to the members, not the government. It should be invested in a manner that will achieve the best returns for those members. If Build To Rent can deliver on that, wonderful – no such compulsion is required. And if it doesn’t, the government should support the Build To Rent industry to create greater housing stock, by reducing prohibitive taxes on the Build To Rent industry and subsidising affordable housing.
My super belongs to me. And nobody is going to tell me what to do with it.
And the government has responsibility for making housing affordable. Not my Super Fund.