How Australia built super, told by the journalist who watched it grow

For so many Australians, superannuation is the largest asset they will hold outside the family home, and the Superannuation Guarantee, now sitting at 12 per cent, builds that balance steadily in the background of their working lives.

Because the architecture is now so familiar, it is easy to forget how recent it is and how much negotiation it took to establish.

Compulsory super is only a little more than three decades old, and the system that now stands at $4.5 trillion emerged from a long sequence of industrial agreements, political contests and policy reforms, each of which could have turned out differently.

That history is the subject of Our Money in Their Hands, written by the late Greg Bright, the founder of this very masthead.

Chris Bowen, Australia’s Federal Minister for Climate Change and Energy, launched the book in Sydney on 22 October. It tells the story of the political battles, policy breakthroughs, industry pioneers and institutions that built a superannuation system. That system consistently rates in the top 10 on the Mercer CFA Institute Global Pension Index.

Early steps

Sheridan Lee is CEO of the third-party marketing firm Shed Enterprises. She worked for Bright on his first superannuation publication, Super Review, in the late 1980s. Superannuation today is 150 per cent of the country’s GDP, she says. It is also the most significant pool of savings for most people.

As Bright explains in the book, the public benefit it provides was far from inevitable. That benefit helps relieve the Federal Government of the financial burden of an ageing population while supporting people’s retirement.

“There were many twists and turns along the way, from the first Wages Accord between the ACTU and the Labor Government in 1983 that sought to include 3 per cent superannuation in all industrial awards to the introduction of the Superannuation Guarantee in 1992 to today’s $4.5 trillion industry,” she says.

Beyond the politics

Lee says Bright was a close observer of the industry throughout his long career. He was always fascinated by its politics and personalities. However, his interest reached well beyond the negotiations between government and the union movement. It extended to the investment industry that compulsory contributions would bring into being.

“But he also appreciated it was much more than just an industrial relations or political story. Greg intuitively knew that once compulsory superannuation was introduced in 1992, it would spawn an industry that would drive investments, create jobs, support innovation and drive capital to where it was most needed,” she says.

That foresight extended to the place Australian super would come to occupy in global markets. “He also appreciated it would not only prove a magnet to global fund managers who wanted a slice of this ‘honey pot’, but transform the local industry from a relatively small, institutionally focused business to a major domestic investment industry.”

The range of investment managers, products and portfolio options now available to advisers and their clients reflects a good deal of that transformation. Much of it has grown alongside the steady flow of compulsory contributions.

Greg’s story

Bright’s own career ran in parallel with the industry he wrote about. He founded Trade News Corporation in 1983, the year of the first Accord. He went on to found a long list of trade titles covering superannuation, investment and advice.

Among them are Super Review, Investor Daily, Investment Magazine, Professional Planner, Top1000funds.com and Investor Strategy News. Investor Strategy News is the institutional masthead now published by The Inside Network.

Lee says superannuation also fostered a trade media to cover the industry in all its various forms. She says Bright was at the epicentre of this development.

She says the book’s preface aptly explains why Our Money in Their Hands is critical reading for anyone interested in the industry.

“It’s a historical reference to superannuation’s coming of age, for the politics of evolution, the visionary people who drove change, and the organisations that had profit and purpose on their minds as the industry evolved.”

According to Lee, the book demonstrates Bright’s devotion to the industry, his passion for its history and his mastery of storytelling. “It’s a fitting tribute to what was a long and storied career,” she says.