SMSF Association Submission
The SMSF Association welcomes the opportunity to make a submission on the National Housing Finance and Investment Corporation Consultation Paper. We have focused our submission on section four of the report regarding the affordable housing bond aggregator and in particular issue five on bond issuance.
The SMSF Association believes that funding affordable housing is an essential public social investment task and that SMSFs could play a significant role in contributing funding to creating a greater supply of affordable housing.
Currently the superannuation sector plays an important role in funding infrastructure investment in Australia. Of the $2.3 trillion superannuation pool, large APRA-regulated super funds had $77 billion invested in Australian and overseas infrastructure at June 2017. Of this figure, two superannuation sectors, industry funds and public sector funds, dominate with $65.2 billion (85 per cent).
However, the SMSF sector is largely precluded from investing in and funding infrastructure and other types of social investment. The SMSF Association believes that SMSFs can have a substantial impact by providing capital funding for affordable housing and there is likely to be demand by SMSF investors if appropriate products, such as affordable housing bonds, are developed. We believe the affordable housing bond aggregator is an appropriate opportunity for SMSF capital to be utilised with positive social outcomes and therefore its issuance should be expanded to the retail bonds market.