Radio National Breakfast – Water Issues
1 March 2006
TONY EASTLEY: As state and territory governments scramble to find ways of fixing Australia’s chronic water shortage, one utility’s company has come up with a novel way of paying for it—it wants to use Australia’s superannuation pool. Politicians are open to the idea but some economists say investing super in utilities may not be financially or politically viable.
Francene Norton reports.
FRANCENE NORTON: Water forums in Australia are becoming an increasingly common theme as governments, industry leaders and environmental experts grapple with the nation’s dwindling capacity to provide water supplies amid a seemingly endless drought. The latest summit is in Brisbane today where private funding of water infrastructure projects is a central issue.
Graham Dooley from United Utilities Australia believes the nation’s massive pool of superannuation may provide the answer.
GRAHAM DOOLEY: It is blindly obvious that large-scale recycling of sewerage needs to be on our agenda, and this needs to be funded from somewhere. It can be funded from government or we can mobilise the enormous investment that all the employees of Australia are making in their superannuation funds and apply that money to the good work of building the nation’s water infrastructure to a level that we will be happy with.
FRANCENE NORTON: Parliamentary Secretary Malcolm Turnbull, who is responsible for water policy, last week called for greater private sector investment in the nation’s ageing water infrastructure, with tens of billions of dollars needed over the next few decades. Labor’s spokesman on water, Anthony Albanese, is open to the superannuation idea.
ANTHONY ALBANESE: I don’t think there is much risk in investing in the necessities of life, and there’s no greater necessity than clean water. So I think it is a secure investment; it’s a long-term investment.
FRANCENE NORTON: However, ABN AMRO Morgan’s Chief Economist Michael Knox has reservations.
MICHAEL KNOX: Firstly, it is no longer possible to conscript superannuation funds to invest in anything and, secondly, it is not necessarily the case that politically people want the private sector to provide this investment. It may be that the people want the states to provide this investment.
TONY EASTLEY: ABN AMRO Morgan’s Chief Economist