Experts are worried what could happen to Australians’ super if Jacinta Allan is successful in getting major funds to invest in Labor’s major projects.
The Victorian Premier told The Australian Financial Review her government was looking to work with private investors, such as those in the nation’s $4.3 trillion super sector, for public projects.
It comes as the state is riddled with debt from overblown infrastructure projects, mounting interest repayments and high recurring spending on transport and hospitals.
Ms Allan said the Victorian government was looking at an array of public-private partnership models to invest in “productive infrastructure into the future”.
“I think we do as a nation need to do more to unlock that productivity capacity that sits in superannuation funds to return it back into those sectors,” she said.
“Because let’s remember: super are workers’ funds and workers need that productive infrastructure that super companies can invest in.”
Wilson Asset Management’s portfolio strategist Damien Boey said investors should remain cautious about a hefty investment in the debt-ridden state.
“It’s a real concern that they should have,” Mr Boey told SkyNews.com.au on Monday.
“No project will go smoothly and you want to make sure that these things are managed well.
“Obviously when you’re talking about large infrastructure projects, whether it’s public or private, there always are those risks of overruns.”
During her interview, the Premier pointed to housing and green energy, alongside other government projects, as areas where she was seeking partnerships between the public and private sector.
“We’ll continue to look at PPPs as opportunities in those sectors that we know it works well in terms of hospitals and schools, particularly,” Ms Allan said.
“We’re always up for the conversation about how we can partner with private sector investors.”
However, Mr Boey stressed a super fund needs to keep commerciality as its upmost focus, particularly when looking into long-term projects.
“Long-term investments are great, but a lot of super funds already have long-term investments in the sense of not only equities, but actually quite large allocations to illiquid (assets) and private credit now,” he said.
“So, you really need to make sure that you know you’re providing sufficiently different and commercial exposure that’s an alternative to the things that they already have.”
Many super funds purchase government or state or territory government bonds as a stable long-term investment.
Mr Boey said the return the Victorian government could offer through PPPs would need to greater than what the funds could achieve by purchasing bonds.
“You need to offer obviously a better return than what a semi government bond or a federal government bond is offering,” he said.
“It has to be a real return and it has to be, you know, over a sufficiently long period without any risk of you know blowing up or anything like that.”
Chartered Accountants ANZ’s superannuation and financial services leader Tony Negline told SkyNews.com.au that super funds have “broad responsibilities to operate their fund in the best interests of all beneficiaries”.
“This obligation extends to investing to maximise returns – there is an important UK court case from 1985 about this issue called Cowan v Scargill; although the case is 40 years old it is still regularly referred to discussions about trustee investment obligations,” Mr Negline said.
“As the AFR article makes clear – super fund trustees are often attracted to investing in public infrastructure, but they do not have the expertise to operate these assets; the point here is that super fund trustees must assess each investment on their merits.”
Ms Allan’s call comes as the Victorian Labor government was revealed to have blown a $50.6b hole in its finances over the past six years, according to the state’s auditor-general.
Victoria reported a $2.6b loss in the 2025 financial year and a $4.2b loss in the previous 12 months.
“This result brings total combined losses over the last six years to $50.6 billion,” a report tabled in the Victorian Parliament on Monday said.
