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Decades of industry super profits rebut the spurious claims by vested interests

It is in members' interests for funds to invest in the modern economy.

It is in members' interests for funds to invest in the modern economy. Photo: TND/Getty


To listen to some commentators, you would think superannuation was about politics rather than retirement.

What is clear after 30 years of compulsory super is that the majority of Australians have super accounts that will help provide the sort of comfortable and enjoyable retirement their parents could barely dream about.

Yet some with vested interests want to make Australians fear their retirement savings are going to be used irresponsibly. Recently, a range of think-tank philosophers from the extremes of left and right have waged a campaign aimed at making industry super members, in particular, panic about imaginary threats to their retirement balances.

The cast of manufactured vaudeville villains is familiar: so-called financial activists, board members with vested interests, and even a conspiracy aimed at seizing control of capitalism (according to two former Liberal members of parliament, the Russian revolutionary Lenin predicted it.)

It could lead one to think Australia’s retirement income system has failed when the very opposite is true.

According to the most recent Mercer CFA Institute Global Pension Index – the top international index of global retirement savings – Australia’s system is No.6 in the world, behind some of the most socially egalitarian and well-governed nations on earth.

The irrational and emotive arguments used against industry super can be easily dismissed easily with facts. Through their super, Australians own $3.3 trillion in retirement assets, administered with low fees and high levels of probity, guided by strong legislation, regulation and corporate oversight.

This is especially so for industry funds, which exist solely for their members’ benefit. The proof is in the strong, long-term performance of industry funds.

To those who say that super (by which they generally mean industry super and not higher-charging and lower-returns-generating retail funds) is making people poorer, my answer is to remember it was not so long ago when ordinary Australians had little to look forward to in retirement than penny-pinching frugality on the pension.

Perhaps the biggest fallacy peddled by opponents of super is that the funds want to take people’s retirement savings and invest it in their pet projects or other things governments should be funding.

The fact is, no one responsible for managing super funds is arguing that funds be used for anything other than maximising returns for members. In fact, they are bound by law to do so.

Yes, funds are examining new areas for investment that these critics object to, for example renewable energy projects; emerging high-tech manufacturing; medical research and affordable housing. Why wouldn’t they? 

These sectors of the economy are where millions of Australians gain employment and profit. They are the modern economy. If funds invest in them, it is because they offer sound investments that promise favourable returns. It is that simple. There is no conspiracy involved.

There is a great opportunity for funds like Cbus Super to be investing in our modern economy. In the last financial year, the fund made a number of significant investments with long-term returns in mind, in opportunities and businesses with strong sustainable growth. As the world continues to evolve, we’ll evolve with it. 

With regard to social and affordable housing, Cbus’ investment in bonds issued by the National Housing Finance and Investment Corporation demonstrates what can be achieved by government, super and industry working together. 

When you think about it, asking funds not to invest in asset classes such as these is the best way to ensure they break their duty to provide members with the highest possible returns. 

Some opponents of industry super funds have suggested we are making sizeable political donations, which they refuse to reveal. As Chair of Cbus, I can emphatically state that we make $0 in political donations.

That has long been the policy of the Cbus Board and one we all strongly endorse. It’s important to understand that the anti-superannuation position is based on ideology that is opposed to compulsory savings and the equal representative trustee model of industry super.

Let’s be clear: these arguments have nothing to do with giving Australians a decent retirement, or ensuring investment goes to where it will generate the best result for fund members, their country and future generations. 

Just as employee and employer representatives worked together for the benefit of the nation at the recent Jobs Summit, so too do industry super funds operate in a bipartisan way that allows the system to deliver a better life for everyday people and a better future for the whole country. The arguments from these critics are all about politics. Full stop. 

Wayne Swan is the chair of construction superannuation fund Cbus. He was Australia’s treasurer from 2007 to 2013 and the deputy prime minister from 2010 to 2013.

The New Daily is owned by Industry Super Holdings

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