Budget 2022: Super funds won’t be forced into housing investment: Jones

Super funds will not be forced into making uncommercial investments if they support the federal government’s housing accord to deliver a million extra new houses.

Super funds will not be forced into making uncommercial investments if they support the federal government’s housing accord to deliver a million extra new houses, Financial Services Minister Stephen Jones says.

“There is no way I am going to be saying to a fund, ‘we want you to invest in something which is not commercial’,” he told an online ­Financial Services Council event on Wednesday.

“The government has to understand the way institutional investors are looking at these things and the hurdles they have to jump over with their boards (to approve investment projects),” Mr Jones said. “There has to be a ­revenue stream for funds and ­unless all of those things line up, we haven’t got a starter.”

Assistant Treasurer Stephen Jones. Picture: Brendan Read

The superannuation sector has welcomed the budget proposal of an accord between federal and state governments and institutional investors to develop a million new houses, including ­social and affordable housing.

But it has warned that any ­participation needs to be done in a way that also protects funds’ primary legal obligation to look after the best financial interests of their members. “The financial services industry looks forward to the opportunity to take on the historical challenges, which have prevented institutional capital from investing in affordable housing,” Financial Services Council chief executive Blake Briggs said.

Australian Retirement Trust (ART) chief executive Bernard Reilly said his fund supported the housing accord.

“We recognise that secure and affordable housing is one of the most significant contributors to the financial wellbeing of our members, and all Australians,” he said. “Housing is a complex issue that requires a co-ordinated policy response from all levels of government as well as the private and community sector.”

Institutional investors and the private sector had a role to play in examining where there were opportunities for investment, “or barriers that we can help to clear”.

He said ART’s recent deal with the Brisbane Housing Company and the Queensland Investment Corporation to finance new social and affordable housing projects provided “an innovative and scalable model for the financing, development and operation of social and affordable housing without compromising our fiduciary duty to our members”.

Cbus chief executive Justin Arter described the housing accord as a “great leap forward in the provision of social and affordable housing”.

“Cbus has long been an advocate for increased investor participation in social and affordable housing,” he said.

NHFIC, which raises funds via government guaranteed bonds, passing them on to community providers to build social and affordable housing, is expected to play a key role in delivering on the goals of the accord.

Mr Jones said the government believed it could “create the right business model”, which would provide the “right incentives” for funds to invest in projects.