While a large part of this year has operated under the long shadow of COVID there are also signs of momentum building for our future success.

The government’s response to COVID was critical and well supported, however it has raised challenges for us looking to the future given the level of debt on various governments’ balance sheets. The recent Intergenerational Report flagged that the federal budget is due to stay
in deficit and this will worsen from the 2030s due to higher spending on health, aged care and interest payments. This leaves little room in the budget for a structural rise in infrastructure spending needed to address climate change impacts, cope with a population growing to
39 million by 2060-61 and drive a recovery in productivity growth.

As I write, the COP26 is underway and a critical conversation about global climate. In our last strategic cycle, QIC worked with stakeholders and clients to understand net zero emissions targets and what this could mean in context of the real assets that we manage. QIC’s investment teams now have NZE targets specific to the assets they manage and QIC has set an overall target of NZE by 2050. While responsible investing is part of our social licence to operate it is also good investment sense. We believe that every single asset and asset class can find ways to evolve and modernise their businesses to deliver better investment outcomes and to incorporate ESG principles more fully.

At a State level we should be considering constantly our natural competitive advantages and continue to leverage those ensuring a coordinated and comprehensive policy environment and partnering of government and third-party capital. Green hydrogen is an example that is gaining momentum and fits the bill. We see a strong future for green hydrogen as part of the renewables sector and in driving infrastructure returns, but it will require a fast, competitive, and coordinated State response. The efforts of the State so far are commendable and QIC has been working with government agencies to provide advice and investor perspectives.

In the more immediate term, Queensland has significant infrastructure opportunities via the Cross River Rail development and then leading into the 2032 Olympics. We have the opportunity to expand the footprint and maturity of infrastructure and real estate developments in Brisbane and throughout Queensland. The Cross River Rail is a critical
public transport project. It also provides broader opportunities to be delivered from community and precinct master planning. Similarly, a successful Olympics gives us a once-in-a-lifetime opportunity to demonstrate our capabilities on a global stage and to attract international capital into our State.

Finally, earlier this year I announced my retirement from QIC. I have enjoyed my role immensely and feel buoyed by the opportunities ahead for the State. I know that QFI stakeholders will work to ensure the right policy environment for these opportunities to flourish.