"British Minister Graham Stuart wants Aust super funds to invest in UK" Andrew Tillett, AFR
The British government is trying to entice Australian superannuation funds to invest in the United Kingdom, saying the country will continue to be an attractive destination for foreign capital in the post-Brexit world.
Investment Minister Graham Stuart also told The Australian Financial Review that Australia and Britain needed to stand together against protectionism as our common closest ally the US edges closer to a damaging trade war with China.
Visiting the Gold Coast for the Commonwealth Games, Mr Stuart will also meet with business and investment figures as part of the May government's renewed focus on attracting foreign capital and growing non-European trade following the 2016 vote to leave the European Union.
Mr Stuart said more than 1500 Australian companies were active in Britain and had invested £10 billion ($18.3 billion) but there were opportunities to grow that dramatically.
One lucrative source of investment has been from local superannuation funds, with Mr Stuart citing how AustralianSuper had poured £1 billion into redeveloping real estate around King's Cross station, dramatically transforming the industrial area into an attractive neighbourhood.
He said Britain was crying out for investment in infrastructure and telecommunications because the country needed to be connected both physically and digitally.
The government had put together portfolios for different parts of the country, in recognition that the needs of London were different to those of Glasgow or England's industrial north.
"There are £600 billion worth of investment opportunities," Mr Stuart said.
"Take Australian super funds, they are expected to grow enormously over the coming decade. My mission is to ensure the UK remains an attractive destination."
Mr Stuart, who supported staying in Europe, said foreigners still wanted to do business and invest in the UK. Despite the uncertainty triggered by the Brexit vote, he said Britain remained the most attractive destination for foreign investment in 2017 and continued to offer stability.
"Investment has reached record levels [so] I would suggest that people are confident. People trust our legal and regulatory system," he said.
"For Australian businesses, the best place to start building a European base is still to come to the UK."
With foreign investment flowing both ways, Mr Stuart claimed the Brexit vote had also encouraged British companies to look further afield to invest their money, and Australia was a popular choice because many had regional headquarters here.
"We want to grow that more, not just the big players but the smaller ones too," he said.
Fintech was a field that Mr Stuart singled out as a particular growth area, with companies starting out in Australia and then reaching into Asia.
As the US and China engaged in a tit-for-tat tariff fight, Mr Stuart said it was vital that pro free trade nations like Australia and Britain worked together and "practise what we preach" instead of going down the protectionist route and fuelling a global trade war.
He said they had to "give voice to the idea that protectionism is not an advantage". While it was an easy political fix to show the jobs that were being protected, Mr Stuart said the ones that were lost or not created because of trade barriers could not be seen.
"We are committed as we leave the EU to being the most open economy in the world that champions free trade," he said.
Mr Stuart said he "very much hopes" Australia would be among the first countries that Britain would sign a free trade agreement with after it departed Europe and could begin negotiations in earnest in April next year.
"Australia is a high priority for us," he said.