Harnessing the power of AI will lift us all: AusSuper CEO

Super fund boss Paul Schroder says there’s an urgent need to tackle the housing shortage and cost of living pressures.

Australian Super CEO Paul Schroder. Picture: Aaron Francis

CEO SURVEY 2025: FULL COVERAGE

Economy

How would you rate the momentum of the Australian economy as we head into 2025? Official forecasts have Australia trimming interest rates from the first half of calendar 2025, is that consistent with your view? What are you seeing around inflation in your own business?

GDP growth remained weak in the September quarter, growing just 0.3 per cent quarter on quarter and 0.8 per cent year on year, but we expect momentum to improve in 2025. After a long period of weakness, real household incomes are picking up and should improve further over 2025, helped by lower inflation, a smaller tax take and (eventually) lower interest rates. This should support a recovery in household spending, although the improvement is likely to be gradual as households remain cautious (evident in the large share of tax cuts that were saved). Public demand has been the main support to growth, with both government consumption and investment growing strongly. We expect government spending will continue to support the economy in 2025, and alongside an improvement in private demand will see overall GDP growth strengthen.

We expect the RBA will begin easing monetary policy in the first half of 2025. The RBA is focused on bringing the level of demand back into line with supply, and the recent weakness in GDP suggests that has continued. Inflation is coming down, but only slowly and the unemployment rate is rising but remains lower than historical averages. The debate over the exact timing will be driven by both the inflation data and the labour market data, with a material deterioration in the unemployment rate or leading labour market indicators likely to bring rate cuts forward.

Businesses continue to report a gradual moderation in both costs and prices, although the rate of change remains higher than the pre-pandemic years. This reflects ongoing strength in demand relative to the economy’s supply potential.

Outlook

What excites you heading into 2025? Are you likely to increase, hold steady, or trim your investment spend?

Based on our current growth trajectory, next year AustralianSuper will reach several major milestones: we will be investing $400 billion of retirement savings on behalf of 3.5 million members. That is a tremendous responsibility.

In 2018, the average retirement balance of a member was $356,560. In 10 years time, we estimate that will be $784,000. It’s exciting to see the magic of super working as intended. By leveraging size and scale as the 16th largest pension fund in the world, we are helping a cleaner in Brisbane invest like a billionaire in New York.

The system is also saving the nation money by reducing reliance on the aged pension. By 2035 Australia is projected to have the lowest public spending on pensions among OEDC countries as a share of GDP.

Reform

As we move into an election year, in your mind, what’s the single biggest lever that can/should be used to lift Australia’s competitiveness or productivity? This could be across any area from labour market, tax reform, training or other areas to encourage investment.

Harnessing the productivity potential of AI in the real economy creates enormous potential upside. The ability to perform tasks that have previously required human involvement, automate process, personalise products and services, and streamline compliance will lead to new productivity gains and enable human workers to focus on more strategic, creative and collaborative work.

Reform also needs to address the immediate issues we face: housing supply, cost of living pressures, the need to accelerate energy transition and increase economic growth. Those pressures are likely to be with us for some years to come.

Geopolitics

Will a Donald Trump presidency have a potential impact on your business or sector (tariffs or streamlined regulation)? Does geopolitics drive a bigger part of your decision-making?

We expect President Trump’s election will have a notable impact on developments in the US and broader global economy due to the distinct policy direction he wishes to pursue. While the outline and direction of the new administration’s agenda is clear, details and implementation (including timing and magnitude) still need to be coloured in. This will cement ideas not only about the eventual effect on the US economy, but it will also work to determine the response outside of the US. The policies most significant to the macro outlook are changes in tariffs, tax policy, immigration and corporate regulation.

Overall, for US economic growth, these policy cross-currents have an ambiguous impact. The negative supply shocks (tariffs, immigration) work to constrain spending and output, but increased fiscal largesse (tax cuts) work the other way. Timing and implementation clearly matter. But the inflation outcome is expected to be unambiguously worse.

Big question marks remain over how the relationship between the US and China will play out, but the tone and direction of travel is apparent. We anticipate the US will continue to de-risk trade under the new US administration. Any significant deterioration will have strong impacts on the Australian economy.

Geopolitics has been an increasingly important input into investment decisions in recent years, particularly in the post-Covid era. The 2010s marked a distinct shift in the geopolitical environment from the post-Cold War period of US leadership in a rules-based, neoliberal global system to one that is more fractious, with major powers under competing ideological models. As a global investor, our role is to look for the signal in the noise to determine what is important in the global economic environment, particularly in terms of disrupting markets, shifting supply chains and triggering shifts in the economic cycle.

People

Has your organisation’s approach to flexible working – including working from home – evolved during the year. Is this likely to change further into 2025?

We have cemented our commitment to offering colleagues choice in their working arrangements by incorporating blended working into our Enterprise Agreement and updating our Blended Working Policy.

Granting colleagues more autonomy in choosing their working environment signals trust and enhances work-life balance. In return colleagues offer higher discretionary effort and productivity.

Looking ahead to 2025 and beyond, AustralianSuper’s goal is to be the best place to work in finance. We believe blended work and a global approach are key to achieving that aim. We are also working hard to close the gender pay gap. Flexible working arrangements play a big role in keeping parents in the workforce and keeping their skills within our organisation.

Technology

Where is your organisation along the AI journey – is it in the developmental stage, or are you now using the technology at scale across your business? If so, are benefits matching the promises?

By 2035, we estimate AustralianSuper will manage $1 trillion in retirement savings on behalf of five million members. AI and other technologies will play a pivotal role in helping us meet that growth, enabling better decision making, delivering efficiency, improving member experience and enhancing risk management. It is a central part of our overall strategy, as we seek to increase engagement with members.

We have embraced generative AI as part of our technological transformation. Every colleague has access to Copilot to help build AI skills and fluency across the organisation, while some teams are now using specific AI solutions in their work. We have seen material improvements in productivity and risk management where teams are fully operating either machine learning or generative AI.