Spotlight on Superannuation

By Elliott Johnston

Frank Lowy raised $1.25billion in an afternoon so that he could become the second biggest owner of shopping centres in the USA. The money came from Australian superannuation funds and the money created no jobs, services or infrastructure in Australia.

What can be done about the burgeoning superannuation funds to ensure they act in the public good?

The funds have an obligation to invest in the interests of their members. What are those interests? Surely job security, decent public infrastructure, environmental sustainability, public hospitals and schools are in the interest of members.

Johnston suggests a few measures to move in this direction. A super fund established by the federal government with the function of lending money to governments and public bodies to fund public works, with the government guaranteeing payment of loan interest.

The public works would have to announced and debated as to their utility and environmental sustainability. The rate of interest would be fixed by legislation. Fund members should be able to transfer funds from one scheme to another (favoured by the current government). Such a scheme may be attractive to workers and unions and offers a sure income source for those whose retirement benefit would depend on it.

(Australian Options; no. 30, Spring 2002)