20 February 2023

Address to Conexus, Sydney


Super and the future

Thanks very much to my friend Colin Tate for his kind invitation and for bringing us together today.

I acknowledge the Gadigal people as the traditional custodians of this land – and the importance of the Voice.

I’ve had regular engagement with many of you in one form or another over the past nine months –

But this is the first time I’ve had the opportunity to address this forum – and it’s great to see so many of you here.

I’m pleased I could begin another characteristically busy non-sitting week with you here in Sydney, one of four cities I’ll be in today.

I woke up in Brisbane this morning, am conferring with a roundtable of economists after this, then I’m making a quick stop in Canberra for another speech, and I’ll finish up in Perth tonight –

A Cabinet meeting and a few other jobs up in Port Hedland tomorrow, and then off to India on Thursday for the G20.

A busy time, but a good time to take stock and reflect –

On what will be a defining twelve months, in a defining decade – for super and financial services, and for the nation.

Our immediate prospects will be shaped by the inflation challenge being confronted by virtually every advanced economy around the world – it’s the defining challenge of 2023, as it was for 2022.

While there is growing evidence that inflation has peaked, it’s still unacceptably high.

The longer that continues, the longer our people will be robbed of the purchasing power that wages growth should be delivering –

The longer our growth prospects will be threatened –

And the longer the real value of savings will be corroded.

That’s why we are using all the levers we have to confront and ultimately conquer this inflation challenge.

Our three-point plan is all about relief, repair, and restraint.

Relief to households where we can provide it responsibly and with an economic dividend –

Repair of our supply chains that’ve made us more vulnerable to supply-side shocks coming at us from around the world –

And restraint in our spending decisions so that we don’t add to inflation.

Beyond the current inflation challenge, our ultimate prospects will be driven by the extent to which we succeed in growing the economy the right way – growth that is shared and growth that lasts.

And to do that we need productivity enhancing investment – in climate and energy, housing, the digital revolution and more.

This morning I’d like to put our agenda for super in that larger context.

To explain our government’s plan to protect super’s core purpose – better retirement incomes –

While also maximising its potential – including through greater investment in our national priorities, in a way that delivers for members.

But before I do that, I’d like to briefly explain how our reforms around financial advice fits into this broader picture.

Financial advice, digital and super

The super sector is strong but it’s dealing with significant change.

In the six years between 2011 and 2016 there were 13 successful mergers in the super sector – more were announced in 2021 alone. 

This consolidation means that we now have fewer funds, managing more members, with diverse needs.

The top 13 super funds hold around 80 per cent of members – so building the ability to offer advice at scale is critical.

And these members are demanding more of you – they want better returns, bespoke strategies, and improved service offerings across the board.

The sector’s capacity to deliver on this demand is going to depend on a steady pipeline of high-quality financial advisers – and we’re responding.

Stephen Jones is leading work to provide a clear path for experienced advisers to stay in the industry and for new entrants to come in.

The Quality of Advice Review has also been released –

And I know that Stephen is looking forward to hearing your views on the best way forward.

As Australians retire with more income than ever before, it is vital that they have access to quality and affordable advice.

Especially when an ageing population means more members are moving towards retirement – 3.6 million in the next ten years.

This means a growing number of Australians will need information and strategies to plan for the retirement they deserve – and rapidly.

That’s where digital could help.

If used well, with the correct consumer protections, it could offer new ways to provide high-quality, cost-effective advice at a larger scale.

And just as digital solutions will be a source of competitive advantage in financial services – the same goes for the broader economy.

We want to create the right conditions here –

So that Australia continues to develop a thriving digital sector – one that already contributes around 6-8 per cent of GDP – and so more of our economy and labour force can benefit from technological change. 

As expected, adoption of digital technology within super and financial services is stronger than in other sectors of the economy.

But there’s more we can do, and more that we will do, to increase uptake.

Clare O’Neil is developing a cyber strategy that will create the safe and secure environment required for digital services to expand –

And our broader skills agenda will address shortages in the tech sector as a priority –

With Ed Husic and Brendan O’Connor running a Digital and Tech Skills Compact –

That will feed into our Employment White Paper later in the year.

Government's response to a changing sector

We’re determined to help ensure that members have access to the advice they need –

By combining a steady pipeline of good advisers with opportunities to maximise the potential of digital.

But that’s not where our work ends.

We acknowledge that the last ten years of super policy have been challenging for you to navigate –

With our predecessors taking an attitude towards the industry that was contradictory, sometimes counterproductive, and often costly.

They promoted performance, while denigrating the best performers –

Claimed the mantle of member first, while simultaneously putting them last –

And raided super balances at every opportunity to cover for their failures.

This messy, ideologically motivated approach culminated in the early release debacle during the pandemic.

Without consultation and little consideration, Australians were forced to choose between better incomes in retirement or paying their bills –

Funds were forced to liquidate assets –

And $36 billion of Australian retirement savings were lost.

Never again. Our government will take a different approach.

We’ve already started by addressing some of the immediate problems in the system –

With Stephen leading a review into the last government’s Your Future Your Super reforms.

This review won’t undermine the performance test – which must and will continue.

But it will look to remove unintended consequences of the reforms –

And keep the focus on the best interests of members. 

Legislating the objective to clarify super's purpose

This year, our agenda for super goes further.

We’ll move to end the super wars once and for all –

And make sure that future changes to the system are compatible with its very objective.

Doing that requires that we embed super’s purpose into law.

Some of the most disastrous policy proposals we’ve seen in recent years –

Like allowing billions to be withdrawn from balances during the pandemic –

Have come about, in part, because our predecessors were navigating the super landscape without a compass.

This made us vulnerable to wrong turns and wrong decisions.

It moved us further away from where we need to be –

Better living standards in retirement for as many Australians as possible.

Legislating super’s objective will change that because for the first time we’ll have a true north –

A shared goal that we can work towards together.

The consultation paper that we’re releasing today sets out our proposed definition of the objective:

The objective of superannuation is to preserve savings and deliver income for a dignified retirement, alongside Government support, in an equitable and sustainable way.

There’s a fair bit to unpack in just one sentence – and much of that will be done through the consultation process.

But I want to share some of the thinking behind the wording – and how it relates to some of our other initiatives that the sector is involved in. 

To my mind, defining super’s task as delivering income for retirement isn’t to narrow super’s role in our economy –

It’s to elevate it, and broaden it.

A sharper focus on delivering for members requires that funds always invest in a way that secures the right risk-return profile –

But it doesn’t preclude you from doing so in a way that befits a stronger economy.

Those opportunities to achieve a double dividend – good results for super funds and members and good results for our nation –

Can only enhance the ability of super to meet its core objective. 

And that’s because a strong economy, and a strong society, is necessary to future-proof super – to protect its capacity to deliver strong member returns in the 2020s and beyond.

As an industry, you’re in the game of long-term investing.

You know better than anyone that diversifying your way out of systemic risk is impossible.

That if we fail to act –

In areas like affordable housing, climate, the care economy and digital –

We will face the prospect of an economy that won’t sustain the growth that we need –

And that this will all be to the detriment of a good, dignified retirement for as many Australians as possible.

I think that’s a big part of the reason why you’ve responded so positively to some of the initiatives we’ve gotten off the ground over the last nine months –

Initiatives focused on embedding good member-returns into the foundation of a better nation.

I’m grateful for your active and enthusiastic participation in the Housing Accord –

The Treasurer’s Investor Roundtable –

And our sustainable finance agenda.

For your conviction that these initiatives should be promoted not dismissed –

Celebrated rather than maligned –

And broadened where it’s sensible to do so.

In the interests of better returns, a better economy, and a better country.

Promoting a more equitable and sustainable sector

Securing the future of super is about enhancing its ability to deliver good returns.

And as our proposed definition of the objective makes clear –

It’s also about making sure the system is as equitable and sustainable as it can be. 

Equitable - to provide similar outcomes for people in similar circumstances and target support to those in need.

And sustainable - so that we deliver government support for better retirements in a way that is targeted, effective and enduring.

I don’t need to tell anybody in this room that we’ve got a way to go on both fronts.

We know there’s a gender gap when it comes to super balances –

Which is in large part a symptom of other forces holding women back in our economy.

We’re getting to the root cause of that through our child-care and paid parental leave policies, and our commitment to lift minimum wages and aged care workers’ wages –

Which should do more to level up balances in the longer term.

But we also need to work within the system itself –

Taking further action to address underpayments and non-compliance –

To ensure that super entitlements are respected, and unpaid balances recovered with ease.

And, when budget circumstances allow, by funding the super guarantee on government paid parental leave.

When it comes to sustainability, our government’s focus from day one has been on spending money wisely –

Getting the most out of every dollar to build value and deliver support to where it’s needed the most. 

When I think about how best we can use the Budget to support Australians towards a better retirement – one fact stands out.

Right now, we’re on track to spend more on super tax concessions than the Age Pension by around 2050.

I’m not convinced that’s a sustainable way to get to our destination – good retirement incomes for more Australians, now and into the future.

While our immediate focus is consulting on the objective of super, that can’t be the end of the conversation about super’s sustainable future.


This will be a defining decade for our nation, and that demands a defining role for superannuation.

Our task for 2023 is clear: settle the purpose of super, protect the gains that have been made, and pursue its greater potential.

We will always be for policy that promotes good incomes in retirement for as many Australians as possible.

We will always be guided by the primary purpose of super – but not hindered by myopic notions of what this means –

Or neglectful of opportunities to enhance this purpose through investments which offer good returns in and of themselves –

And that also set us up for a better future –

For the collective benefit of super, of members, and of the nation.

Thanks very much.