Chanticleer
Why Wayne Swan says super is our ‘economic secret weapon’
Wayne Swan says the super sector proved its economic power during the GFC and can help Australia’s next set of big challenges.
It’s fitting that The Australian Financial Review’s Super & Wealth Summit should open on Tuesday in Melbourne with Assistant Treasurer Stephen Jones, before the stage is graced by representatives of the giants of the sector.
It was Jones, after all, who raised eyebrows inside and outside the tight-knit world of super earlier this year when he referred to the trillions in savings inside the system as “honey”.
Former Labor treasurer Wayne Swan says the GFC proved the power of super. Paul Harris
That sparked an important and necessary debate about how, when and whether to use super’s ever-growing pools of capital to solve the big questions facing governments and the community.
Chanticleer will interview former federal treasurer Wayne Swan, who now chairs industry fund giant Cbus. He says super’s potential role today is demonstrated by the lessons of the GFC, when Swan was treasurer.
“It’s well known that super funds helped recapitalise the banks during the GFC,” Swan said in a speech last week.
“They played a crucial role in supporting non-financial corporations, mainly engaged in the market for goods or non-financial services.
“Super was the economic infrastructure that allowed our stimulus to do its job. It’s the under-appreciated scaffolding for investment in our economy.
“And it should be given greater recognition for the strength it gave our economy through the GFC and pandemic, or as we move forward by helping to finance our great energy transition and the housing crisis.”
To be clear, Swan is steadfast that super should only play this broader economic role where it delivers for members.
But it’s notable that he highlights the energy transition and housing as areas where super capital can be harnessed. The size, complexity and generational nature of these challenges should create no shortage of opportunities for capital with a long time horizon to make strong returns.
Still, there is a challenge of balance here that is important.
What Swan called in his speech “our national economic secret weapon [that] can and should be deployed to deliver further economic out performance in the third decade of the 21st century” is also your money.
But the GFC does give us an example of where individual rights and collective ambition can come together.
Swan says this is the power of real reform: “Think big, think long, spread the gains broadly.”
Indeed, while the baby boomers might get a bad rap these days, Swan argues the generation that created and backed the super system can stand proud.
“Superannuation has diversified the asset base of every household in the country. As a result, people of all incomes share in the ownership of not just our economy but advanced economies around the world.
“To me that’s the very definition of the national good. It’s a classic case of how we should seek to reform in other areas.”
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