Australia’s largest superannuation fund, AustralianSuper, has called on the Australian Government to build assets to sell to long-term investors but not to use the A$4.3 trillion (US$2.8 trillion) super industry as a ‘piggybank’.
Chief Executive Paul Schroder said super could contribute to national renewal, but its potential to be an engine room of Australia’s sustained prosperity was unrealised.
“This isn’t and can’t be about Government telling funds what to,” he said in a speech to the National Press Club in Canberra.
“I’ve said this behind closed doors and in front of the cameras and I’ll say it again – it would be a disaster for members if governments tried to tell us what to invest in.”
Treasurer Jim Chalmers has urged super funds to consider investing in nation-building projects like affordable housing and the energy transition, but funds have pushed back, arguing their obligation is to act in the best financial interests of members.
AustralianSuper manages more than $385 billion for more than 3.5 million members.
Schroder said the Government’s job was determining the direction of the country and the services and infrastructure that underpinned it while the job of super funds was to deploy capital into productive investments to bolster members’ retirement savings.
One way this could work was for governments to build assets, with the plan to sell or lease them later to long-term investors like super funds.
“Or as I like to say: build to sell... that’s a model very much worth exploring,” Schroder said.
He said Australians' retirement savings cannot and should not be used to solve every complex national problem.
“We must break the piggybank mentality. Super is not a trillion-dollar fix-all,” he said.
Answering questions, Schroder said AustralianSuper was open to improving the annual performance test of super funds, which assesses their returns and fees.
“The current performance test doesn't really take account of strategic asset allocation, which is how much in shares, how much in cash, how much in fixed interest. And so there are better ways to do the performance test which would really give members a more useful sense of performance,” he told the audience.
“But AustralianSuper views very strongly that there should be a performance test, and we're open to it improving, and it really should be: ‘did your fund make your money or not?"
