Is super the Govt’s inevitable infrastructure partner?

Mike Taylor

Managing Editor and Publisher

7 July 2026

The days of Governments going it alone to fund the building of infrastructure are over and, in the case of Australia, the Government will likely further look towards superannuation, according to Escala Focus Partners chief investment officer, Tracey McNaughton.

McNaughton says nations can no longer afford nation-building infrastructure on their own in circumstances where the next wave of nation-building infrastructure will require vast amounts of capital at a time when governance balance sheets are under pressure.

She says that historically, governments have been the primary funders, financiers, of nation building and while, today, the ambition is just as great, the fiscal space is more limited.

“Countries need more of the traditional nation building stuff – defence, energy, transport. But now they need the infrastructure to support artificial intelligence.

“We are experiencing the biggest, most expensive nation building program in history. This, at a time when the government coffers are low on cash,” she says.

“One of the more revealing moments during the recent Senate scrutiny in Australia of the tax reforms was when the Treasury Secretary, Jenny Wilkinson, said basically we needed the money. Her response was refreshingly direct: governments ultimately need revenue,” McNaughton says.

“So, we are in an awkward position. This infrastructure requires capital, lots of capital.  The question is whether sovereign balance sheets can support it.”

McNaughton says bond markets are likely to become part of the story but she believes investors are likely to become more discriminating and that countries with strong fiscal positions may continue to borrow relatively cheeping while those with weaker balance sheets may find the cost of capital steadily rising.

She pointed out the manner in which Governments have been encouraging private companies to become partners and noted the actions of the United Kingdom and South Korea.

McNaughton then posed the question of whether superannuation can offer alignment for Australians and said she believed it almost certainly will.

“Australia’s superannuation system now manages 4.5 trillion dollars on behalf of Australians.

“If governments are looking for patient, long-term capital to fund nation-building assets, it’s only natural that they’ll look towards superannuation. And in many respects, those projects are well suited to long-term investors.

“But there is an important distinction we need to preserve. Governments naturally look at superannuation and see a source of capital.

“Trustees look at exactly the same money and see something very different. They see the retirement savings of millions of Australians. Their responsibility isn’t to deliver government policy.

“Their responsibility is to maximise long-term risk-adjusted returns for their members. Maintaining that distinction is fundamental to the integrity of our superannuation system,” McNaughton says.