by Praveen Menon
SYDNEY (Reuters) – The head of Australia’s largest pension fund has warned that a global recession is looming as the country seeks to tackle economic challenges and prepare for a global recession.
Australia has the third largest pension pool in the world, and its pension fund has grown from last year’s 148 $100 million to over $3.3 trillion over three decades .
“I’m terrified that governments around the world will say: ‘Oh, we have economic trauma? Tax people’s money. We want to build something? Tax people’s money,'” ” said Paul Schroder, chief executive of AustralianSuper.
“It’s simple politics, terrible financial thinking. It’s terrible for society,” Schroeder’s fund manages 260 A$1 billion in The country’s superannuation was replenished at the AFR Super & Wealth Summit in Sydney.
Australia’s center-left government says it plans to scale back tax breaks for super-rich superannuation funds, saving billions of dollars each year that could be used to cover shortfalls in the budget deficit.
Last month, it said it had reached an agreement with the Superfund to focus on investing in affordable housing projects in response to the industry crisis.
Schroeder’s view on affordable housing The housing plan welcomed it, but said that from an investment perspective, the dynamics of risk and return do not often match.
“Will we do this? Something about affordable housing? Yes, we have. Does it stack generally? No, it doesn’t. Often the risk is too high and the reward too low,” Schroeder said.
The government has yet to detail how it plans to use retirement funds for affordable housing
The global economy, whether already in recession or Heading into recession, both are seen as using pension funds to ease economic distress. It was reported last week that the UK was planning a secret tax raid on pensions this month.
