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Shorten to study Israeli superannuation

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Friday, April 27th, 2012

As reported in the Australian:

SOME of the leading figures in the multi-trillion-dollar superannuation sector will join federal Financial Services Minister Bill Shorten on a visit to Israel later this week as the government examines ways for the retirement savings system to help kick-start the Australian venture capital business.

Joining Mr Shorten on the visit will be Australian Prudential Regulation Authority deputy chairman Ross Jones, MLC chief executive Steve Tucker and Challenger Group retirement income chairman Jeremy Cooper, author of the contentious Cooper Report on the superannuation sector.

During the visit, co-ordinated by the Australia-Israel Chamber of Commerce and the Israeli embassy, the group will meet executives of leading Israeli financial services companies, including its largest insurance group, Migdal, and fellow insurer Clal Insurance Enterprise Holdings.

It will also meet officials of the Capital Market, Insurance, and Savings Department, which supervises insurance and the long-term savings market.

Mr Shorten is also planning one-on-one meetings with Bank of Israel governor Professor Stanley Fischer, chief scientist Avi Hasson and Israeli and Palestinian leaders.

“The chamber is very excited about the Shorten-led trade mission,” said AICC chairman Paul Israel, who is based in Tel Aviv. “For the first time Australian pension funds will be exposed to the vibrant and innovative Israeli venture capital and hi-tech scene.”

Mr Israel said the week-long trade mission would investigate how Israel — with 7.2 million people, a third of the size of Tasmania, 60 per cent desert, only 63 years old with limited natural resources — had produced more start-ups than large, peaceful and stable nations such as Japan, India, Korea, Canada, Britain and Australia.

It would look at Israel’s superannuation, tax reform, venture capital and seed fund models, as well as its innovation and entrepreneurship culture, he said.

A spokeswoman for Mr Shorten said it was important that super funds looked beyond traditional assets classes and the government was keen to remove investment barriers to them.

She said the trip was designed to improve Australian super funds’ understanding of Israel as an investment destination, particularly in light of the strong venture capital sector there.

Mr Shorten also hopes Australian super funds can get an understanding of how Israel’s pension funds go about investing in innovative and early stage companies.

The group will also meet entrepreneur and venture capitalist Jon Medved, who co-founded private equity group Israel Seed Partners, an investor in 60 leading Israeli companies.

During an AICC trade mission to Israel hosted by Stockland directors Carol Schwartz and Carolyn Hewson, Mr Medved said Australia should do more to use its massive retirement savings pool to back innovation and the venture capital industry.

“Basically, this is about working together with foreign capital. The best opportunity for co-operation with Australia that is basically untapped is your supers. It is the third largest concentration of capital globally.