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Super funds should use their substantial holdings for public good

  • Written by Kate Shaw, Honorary Senior Fellow in Urban Geography and Planning, The University of Melbourne
Super funds should use their substantial holdings for public good

Last month Federal Treasurer Jim Chalmers unveiled the National Housing Accord[1], intended to build a million new homes in Australia. Part of the plan is to encourage superannuation funds to invest in social and affordable housing.

The proposal was met with criticism[2] from some quarters, with critics arguing[3] Australia’s superannuation savings belongs to its members:

it is their money, not Labor’s play money.

These critics are forgetting it was not so long ago people’s taxes (which can also be seen as “their” money) paid everyone’s pensions. And while in consolidated revenue on their way to keeping us in comfort in our old age, these taxes helped build extensive public and social infrastructure.

Read more: Albanese government's first budget delivers election promises but forecasts soaring power prices[4]

The transfer of retirement funding from the national government to non-government super funds is just one example of the shift from public provision of social goods towards individual accumulation that has defined Australian politics for four decades. This shift, along with associated income tax cuts, has contributed directly to the housing affordability crisis via the emphasis on property as an investment.

Australia’s super funds now control $3.3 trillion[5] – the fourth-largest pool[6] of retirement savings in the world.

Most of them invest in fossil fuels[7] and some, directly or indirectly, in armaments[8], exploited labour and old-growth logging. All of them invest internationally[9] where, if they are not doing actual harm, they are still not doing any good for their members in Australia beyond delivering financial returns.

Super funds are regulated by federal legislation which originally stipulated they must act in the “best interests of their members[10]”. This was changed by the Coalition government in 2020 to read “best financial interests[11]”. It is this requirement that has the critics of Chalmers’ plan baulking[12]: how can it be in members’ best financial interests to invest in social housing?

Read more: Labor is winding back reforms meant to hold super funds accountable to their members[13]

Why super funds should invest in social housing

If even 1% of the $3 trillion – $30 billion – were invested in social housing, rental pressures in the private housing market would be massively reduced as tens of thousands of households currently in the private rental market vacated those dwellings for new social housing.

The flow-on effects of decent secure housing, including improvements in physical and mental health, and general social welfare are well[14] documented[15].

The Albanese government could re-amend the regulations to their earlier form, and could require all super funds to invest a proportion of their portfolios in socially and ethically beneficial activities.

Super fund members are workers and members of society too, making up most of the adult population. They would all benefit from a more equal society.

Investing for social good is already happening

Some local funds and other financial institutions are already investing in social goods. Various super funds like CBus[16] and community banks like Bank Australia[17] invest in or give low-interest loans to community housing associations. Australian Super has a 25% stake in Assemble[18], an affordable housing developer – bought before the 2020 amendment.

Community banks and European funds are already investing in low yield, low risk social investments. Shutterstock

They are taking small steps in a direction that is well-established in many European countries, where the notion of corporate responsibility has much greater resonance. This can be seen in the German constitution, which stipulates property ownership entails obligations, and “its use shall also serve the public good[19].”

European funds are finding low-yielding, slow-returning investments in social and co-operative housing complement their diverse portfolios well. Germany’s UmweltBank[20] supports various housing initiatives including the famous Spreefeld co-op[21] in Berlin, which provides a steady, low-risk return.

Investments in social housing are regarded as the lowest risk of all, as rents are mostly paid from financial assistance guaranteed by the state. Pension funds and community banks can commit to the long term, unlike corporate investors[22] that purchase social housing for a limited period before selling it on the private market.

Oversight of these initiatives must be careful and regulated, but there is no reason why they should not be implemented. Chalmers’ plan should be applauded, and could go much further.


  1. ^ National Housing Accord (
  2. ^ criticism (
  3. ^ critics arguing (
  4. ^ Albanese government's first budget delivers election promises but forecasts soaring power prices (
  5. ^ $3.3 trillion (
  6. ^ fourth-largest pool (
  7. ^ fossil fuels (
  8. ^ armaments (
  9. ^ internationally (
  10. ^ best interests of their members (
  11. ^ best financial interests (
  12. ^ baulking (
  13. ^ Labor is winding back reforms meant to hold super funds accountable to their members (
  14. ^ well (
  15. ^ documented (
  16. ^ CBus (
  17. ^ Bank Australia (
  18. ^ Assemble (
  19. ^ its use shall also serve the public good (
  20. ^ UmweltBank (
  21. ^ Spreefeld co-op (
  22. ^ corporate investors (

Authors: Kate Shaw, Honorary Senior Fellow in Urban Geography and Planning, The University of Melbourne

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