Infrastructure: Should Australia Lose the Levy and Get Innovative?

In the wake of the devastating Queensland floods, the federal government may be missing a major innovation opportunity by opting to fund infrastructure through a one-off levy. Michael Sherris, a professor of actuarial studies at the Australian School of Business, believes there's a chance to address two pressing issues – the need for infrastructure and population ageing – with inflation-indexed longevity bonds. His controversial idea has investors considering the possibilities. While some argue longevity risk needs to be tackled separately, an international expert suggests the only practical way to deal with the risk of people living longer is to pool, tranche and securitise it. Is now the time?