AustralianSuper chief executive Paul Schroder has called for urgent reform. Picture: NewsWire \/ Martin Ollman <\/p>\n
Superannuation in the second half of the century could be as important to Australia as wool was in the 19th century and iron ore has been since 2000, but urgent reforms are needed to make retirement more seamless, the leader of Australia\u2019s largest pension fund warns.<\/p>\n
AustralianSuper chief executive Paul Schroder told the National Press Club on Wednesday that with superannuation contributions reaching 12 per cent on July 1, the industry now faced a challenge to deliver prosperity for everyone.<\/p>\n
\u201cOur economy was built off the sheep\u2019s back and expanded by the ore that we dug out of the ground. Capital exports could help drive our future prosperity,\u201d he said.<\/p>\n
\u201cThe super system is the envy of the world. Policymakers and financiers across the world are talking to us about what they can learn from our system.\u201d<\/p>\n
Australia now spends 2.3 per cent of gross domestic product on aged pensions compared with 9 per cent or more for many other developed nations.<\/p>\n
But Mr Schroder warned that Australia\u2019s world-leading superannuation industry urgently needed reform, including simpler retirement savings systems.<\/p>\n
Paul Schroder has called for urgent reform. Picture: NewsWire \/ Martin Ollman <\/p>\n
He noted that less than half of Australians felt confident about retiring and only one in two people applied for the aged pension as soon as they were eligible.<\/p>\n
\u201cI\u2019m calling for changes to the law so that Australians can easily move back and forth between work and retirement. Between saving their money and spending it,\u201d he said.<\/p>\n
\u201cCurrently, the system requires members to open a separate account, a separate retirement account, if they want to draw down an income and another one if they want to keep contributing. How stupid is that?<\/p>\n
\u201cI think a streamlined system is a really obvious solution \u2013 one that helps Australians from their very first job all the way through to their final years.<\/p>\n
\u201cOne that allows contributions and draw downs to coexist seamlessly.<\/p>\n
\u201cWhy can\u2019t a pension account also integrate with the government aged pension? You could make the whole thing so much easier.<\/p>\n
\u201cLet\u2019s lift the red tape for all those approaching retirement.<\/p>\n
\u201cMembers shouldn\u2019t have to apply to join retirement like they would a gym or a golf club.\u201d<\/p>\n
Mr Schroder said while Australia\u2019s system had been the envy of the world, it needed to be modernised. <\/p>\n
Mr Schroder said Australia\u2019s $4.2 trillion superannuation system was unique and likened it to AFL.<\/p>\n
\u201cWe didn\u2019t invent retirement, of course, but no one plays football or does retirement like we do,\u201d he said.<\/p>\n
\u201cMost other countries have treated retirement as a liability to be minimised \u2013 a cost. But we treat retirement as an asset to be maximised and it\u2019s working.\u201d<\/p>\n
While the 1992 retirement system was \u201ca piece of genius\u201d, it needed updating for modern times, Mr Schroder said.<\/p>\n
Story Continues <\/p>\n
\u201cThe way that we serve members today will not last the distance to the next century. We need to reset our approach to retirement, guidance and advice,\u201d he said.<\/p>\n
Mr Schroder also called for changes to solve inequities within the system.<\/p>\n
\u201cMany Australians, particularly women, have missed out on contributions during interruptions to the paid working lives,\u201d he said.<\/p>\n
\u201cOthers \u2013 gig workers, people from non-English speaking backgrounds, Aboriginal and Torres Strait Islanders or those with unpaid super \u2013 they still miss out in a range of different ways.\u201d<\/p>\n
Mr Schroder said tax concessions were central to the success and fairness of superannuation.<\/p>\n
\u201cThe deal here is really simple \u2013 I lock my money away for 40 years to fund my future, and in return, the government gives me concessional tax arrangements,\u201d he said.<\/p>\n
Mr Schroder also called for changes to solve inequities within the system. Picture: NewsWire \/ Martin Ollman <\/p>\n
Mr Schroder said the reform agenda needed to be bold, co-ordinated and long term.<\/p>\n
\u201cAll of the challenges we face \u2013 housing, health, the energy transition, the implications of AI and quantum computing \u2013 they\u2019re all massive,\u201d he said.<\/p>\n
\u201cThey\u2019re kind of intersected and those reforms \u2026 they\u2019re physical and we can see they\u2019re politically charged.<\/p>\n
\u201cThey\u2019re also full of ethical dilemmas. It\u2019s important that we don\u2019t shy away from those ethical challenges. Each of them requires infrastructure. People will need shelter. Power will need transmission. Data will require storage.<\/p>\n
\u201cThey\u2019re all multi-billion, multi-decade tasks and we\u2019re interested in opportunities to provide capital, provided it\u2019s responsible and provided it\u2019s at scale.<\/p>\n
\u201cIf we get the settings right, all parts of that chain can become investable opportunities, delivering long-term value for the nation and delivering value for members.<\/p>\n
\u201cSuper can contribute to the national renewal, but \u2013 and it is a big \u201cbut\u201d \u2013 there\u2019s no playbook for this.<\/p>\n
\u201cThe potential for super to be an engine room of Australia\u2019s sustained prosperity is unrealised. This isn\u2019t \u2013 and it can\u2019t be \u2013 about governments telling funds what to do.\u201d<\/p>\n
Super funds have been buying data centres, shares, bonds, property, ports, airports, roads and energy infrastructure overseas.<\/p>\n
The returns from all of that global investment goes back to Australia.<\/p>\n
Mr Schroder suggested governments could build assets with the plan at the start to sell or lease them later to long-term investors like super funds.<\/p>\n
He further warned that Australia\u2019s retirement savings pool was not a political \u201cpiggybank\u201d.<\/p>\n
\u201cSuper is not a trillion-dollar fix-all. It cannot \u2013 and it should not \u2013 be used to solve every complex national problem,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"AustralianSuper chief executive Paul Schroder has called for urgent reform. Picture: NewsWire \/ Martin Ollman Superannuation in the…\n","protected":false},"author":2,"featured_media":129319,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[1246,44738,82074,28,82071,82070,147,530,1666,82073,25394,82072],"class_list":{"0":"post-129318","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-australia","9":"tag-australians","10":"tag-australiansuper","11":"tag-business","12":"tag-mr-schroder","13":"tag-paul-schroder","14":"tag-personal-finance","15":"tag-personalfinance","16":"tag-retirement","17":"tag-streamlined-system","18":"tag-superannuation","19":"tag-superannuation-contributions"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/129318","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=129318"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/129318\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/129319"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=129318"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=129318"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=129318"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}