GREG JENNETT:
Well, who can forget Anthony Albanese’s first official bilateral visit to a foreign country as Prime Minister. It was, as you might recall, to Jakarta and the Presidential Palace in Bogor where the PM and Joko Widodo each rode bamboo push bikes. Well, now there’s a follow‑up. Indonesia asked for more investment by Australian firms, especially the big superannuation funds; so, to that end, Assistant Treasurer Stephen Jones is in Jakarta today trying to gauge what’s on offer or what’s requested. He joined us a little earlier via a slightly scratchy video weblink to explore those ideas.
Stephen Jones, it seems like whenever we catch up with you these days, you’re in a different part of the world. We find you in Jakarta today where you’re promoting potential investment by Australian super funds into Indonesia. In what sort of projects and with what sort of return do you envisage?
STEPHEN JONES:
It is true that in the past we have looked to Europe, the US and Japan for our investment opportunities. When I ask our superannuation funds and other businesses why that is, why they haven’t previously gone to Indonesia, the simple answer most of them give is they don’t know enough about it. So, one of the objectives of this mission this week and the follow‑up of it will be to look at ways we can improve our knowledge of the business environment and the investment opportunities and from their side of the equation, the Indonesian Government is recognising the need for it to do some new things as well. So, they’ve set up a special Indonesian investment authority as a portal through which Australian funds and, in fact, internationally, our funds can be invested here in Australia.
JENNETT:
So, there is potential for Australia to increase its investment there, but as big as $3.4 trillion under management might sound, there are also lots of competing agendas to direct that money, including right back here at home. You might be aware that Paul Keating attended a forum yesterday with Jim Chalmers and others, really pushing the idea of social opportunities – they’re his words – when it comes to investments here in Australia. Housing was but one example. Do we need to be prioritising the directions for these funds, maybe even putting the onus more here onshore?
JONES:
We’ve got a really good opportunity in the fact that we don’t have to choose. We don’t have to choose between whether we’re investing abroad and whether we’re doing more at home in Australia. We can and should do both. Any diversified investment portfolio will have significant amounts of money invested in opportunities in Australia, but a proportion of investment in international equities, international infrastructure or international direct ownership of assets abroad. It makes sense to do both. And as our pool of superannuation savings grows over the next three to five years from $3.4 trillion to $5 trillion – that’s a lot of money – we’re going to be looking increasingly for opportunities abroad in addition to the things that the Treasurer was talking about in his roundtable with business yesterday about opportunities for us to be getting great returns for members but also dealing with some really gnarly social problems such as housing, such as infrastructure, such as regional investment. We can do both.
JENNETT:
Sure. Quite separate to your trade mission in Indonesia, just to explore a little further some of the suggestions made by the former Prime Minister in Paul Keating, he’s actually recommending a change to the rules, if you like, here so that super funds might partner with banks and that would be quite an upending of the traditional roles played by both institutions. Are you open to that, in theory?
JONES:
I think we’ve got to be open to a whole range of innovative ways to do business. We know that already the banks are partnering with superannuation funds and other investors to ensure that they can spread risk and get more capital to be deployed into important projects, and banks are also playing roles in terms of providing advice and brokerage arrangements in a lot of these deals as well. So, one of the things that Jim and I are really keen on talking about and making quite clear is we want to get beyond the super wars that we seem to have been bogged down in over the past decade and start looking at partnership arrangements – partnership between super and the banking industry, where there has been some traditional rivalry; partnership between Government and superannuation; and partnership between superannuation funds in Australia and investment opportunities abroad. This is a fantastic situation to be in. Never in our nation’s history have we been in a situation where we’ve had between $3.4 and $5 trillion worth of domestic savings which is available to grow our economy, to bring foreign investment opportunities to ordinary working people and, at the same time as doing that, growing our pool of retirement savings. A little‑known fact is that right now our superannuation funds are delivering more in retirement savings than the Government does in pensions. I think it is about double in the last year alone; about $120 billion worth of savings deployed from our superannuation funds to retirees in the form of retirement income. It means our system is working and we want to build on that success to take it to even new heights whether it’s investment abroad or investment in trade opportunities in Australia.
JENNETT:
Stephen Jones, thank you for joining us there from Jakarta.
JONES:
Always good to chat, Greg.