The infrastructure package announced in the federal budget is aimed at encouraging private investment in infrastructure and improving the governance structure of Infrastructure Australia (IA).
IA will produce an enhanced list of national priority projects and losses generated by investment in those projects will be exempt from the continuity of ownership test and the same business test.
Association of Superannuation Funds of Australia (ASFA) chief executive Pauline Vamos said the ability to preserve losses would add to the incentive to invest in infrastructure and a more transparent investment process.
"The next step is to put into place the added government structure around IA and to get the pipeline going," Vamos said.
"To date, infrastructure investment has been complex, bidding for projects can incur a huge cost with no guarantee of success and there has been a lack of transparency around projects. These measures will help to add transparency."
ASFA is calling for a working group to establish a centre for excellence for infrastructure investment, a 20-year national investment pipeline and a new approach to developing investment opportunities for smaller investors. "Better planning is needed and the superannuation industry must have a permanent seat at the table for these discussions," Vamos said.
Colonial First State Global Asset Management head of global listed infrastructure Peter Meany said Australia lagged Europe and the United States in terms of the coordination of infrastructure projects and the development of suitable financing structures for investors.
"We see an important role for IA. There's been a lack of coordination regarding the pipeline of projects and IA hasn't been given the independence or responsibility to work closely with private investors," Meany said.
"But at least the language in the budget is in the right direction."
He said more needed to be done to lure super funds to invest in infrastructure than simply allowing tax losses to be preserved.
"At the end of the day, a super fund is less concerned about protecting tax losses and more concerned about avoiding losses in the first place," he said.
"Super funds would welcome a lower-risked approach to investing in infrastructure. There should be a whole spectrum of ways to invest in infrastructure rather than simply an equity investment in a greenfield project carrying construction, financing and volume risks.
"Investments could include equity after the project is operational, equity with a minimum level of income or debt with a government guarantee or tax incentive.
"Either way, the government needs to do more about taking on the risk of the projects."
Professional services firm Towers Watson said the underlying structure of the investment was key for institutional investors.
"Some investments have been disappointing in terms of performance because of the financial structure of the investment vehicle. High fees and costs have also compromised the value of some infrastructure investments," the firm said.
Catholic Super chief investment officer Garrie Lette said the budget changes would not necessarily have a big impact, especially for smaller funds. Lette's fund does not have a direct exposure to infrastructure, only through other funds.
"We're not a big investment team and we would have to be careful of the complexity associated with infrastructure investment," he said.
