Thursday, 21 May 2020
Industry super fund Rest says superannuation has a major role to play in Australia’s economic recovery from the coronavirus pandemic and can best do so with policy certainty.
“One month after receiving the first early release applications from the ATO, Rest has now provided more than $1 billion in support to members in financial distress,” said Vicki Doyle, CEO, Rest.
“However, superannuation has a much larger role to play as Australia emerges from this crisis. As a major investor with $53 billion in funds under management, Rest is well placed to provide long-term capital investment into important community infrastructure and capital raisings that can generate returns for our members and support Australia’s economic recovery.
“However, in order to invest in infrastructure and raise capital for Australian companies, it’s critical super funds have stable policy settings. Uncertainty will constrain our ability to invest for the long-term on behalf our members.
“It’s important that a short-term approach to the current crisis does not create a longer-term crisis for Australia’s retirement savings. If members’ super is regularly called upon to provide short-term fiscal support to the economy, it changes the way we invest on behalf of our members. We would need to consider shorter-term investment horizons and different asset allocations.
“With policy certainty, there is a greater opportunity for our members to benefit from investments that also support Australia’s economic development and recovery.”
Ms Doyle said Rest had identified the need for long-term debt to fund major infrastructure around Australia five years ago.
“In addition to providing a stable, long-term source of capital to listed Australian companies, we currently have about $8 billion invested in Australian infrastructure assets. This includes airports, pipelines and renewable power generation. We are also a long-term investor in the Australian agricultural sector,” said Ms Doyle.
“Our members money is also directly invested in community infrastructure, such as motorways in Queensland and constructing schools in WA. We have an extensive property portfolio with investments in office buildings, shopping centres and student accommodation.
“We have also made long-term investments that drive employment and sustainable development in regional economies. We have $350 million invested in 99,000 hectares of rain-fed cropping farms in Victoria, NSW, Queensland and WA, and are looking to commit a further $500 million to expand our agriculture portfolio during the next five years.”
As at Thursday morning, 21 May, Rest had paid 153,694 members $1.08 billion under the temporary early release of super scheme. Rest received the first set of applications from the ATO one month earlier on 21 April.
About 96 per cent of all applications had either been paid already, or were due to be paid in the coming five business days.
“It’s been two months since the Government announced this scheme, and we have moved rapidly to process an average of 8,500 applications or $60 million per business day,” said Ms Doyle.
“While the scheme will continue for some time yet, the amount withdrawn so far is significantly below our forecasts and comfortably within our provisioning.
“We are currently very well placed to pursue value in investment markets for our members and support Australia’s overall economic recovery.”
Figures as at 10am Thursday, 21 May 2020.
The vast majority of ‘In progress’ applications are expected to be completed within a five-business-day period. The ‘Flagged’ applications are currently undergoing extra verification as part of the processes Rest has in place to keep members’ money safe from fraud and money laundering. ‘Invalid’ applications have been returned to the ATO.
The volume of applications arriving from the ATO each week has consistently decreased.
|21 – 24 April
|27 April – 1 May
|4 – 7 May
|11 – 15 May
|18 – 20 May (week not complete)
“We are now typically receiving around 3,000 to 4,000 applications in each daily set from the ATO, and these continue to trend downward,” said Ms Doyle.
“We remain financially well placed should volumes increase as the scheme continues through to September.”
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This information has been prepared without taking account of your objectives, financial situation or needs. Before acting on the information or deciding whether to acquire or hold a product, consider its appropriateness and the relevant PDS which is available at rest.com.au. Issued by Retail Employees Superannuation Pty Limited ABN 39 001 987 739 (Rest), trustee of Retail Employees Superannuation Trust ABN 62 653 671 394 (Fund).