During his visit to the White House this week, Australian Prime Minister Malcolm Turnbull is expected to propose using part of his nation’s roughly $2 trillion pension savings pool to invest in U.S. infrastructure.
The Trump administration’s $1.5 trillion infrastructure proposal landed with a thud last week, due in large part to the plan’s call for relatively small direct federal investment of $200 billion and its vision for states and private investors to provide the remaining $1.3 trillion. Critics have pointed out that states have little fiscal headroom to fund substantial investments in infrastructure, and private investors are unlikely to see the returns they demand in pricey but mundane transportation and energy projects.
Australia’s ambassador to the U.S., Joe Hockey, told Bloomberg that his country could provide examples of infrastructure development that could be useful to the U.S. — and could help deliver “private money in partnership with state, county and city governments to give the infrastructure America desperately needs just to maintain its current economic growth, not to fall backwards.”
But money isn’t the only hurdle. Jim Miller, an Australian investment manager, said American states and localities will also have to overcome concerns about private ownership of some infrastructure assets — which he called “socialist attitudes” — if substantial for-profit investment is to move forward.