Hesta CEO Debby Blakey: Fund members feeling living cost pain

Debby Blakey says many of her fund’s members have felt the weight of higher mortgage repayments, rent and higher energy and food bills over the past year.

HESTA Super CEO Debby Blakey.

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?

We know this year presented many economic challenges for Australians. Many of our members have felt the weight of higher mortgage repayments, rent and higher energy and food bills over the past year. The economy has been operating at a below-trend pace all year, where household consumption and weak homebuilding are offsetting government spending. For 2025, we expect official interest rates to be potentially 1 per cent lower than they are now, providing some relief to many of our members. However, if inflation remains high and wages rise accordingly, there’s a risk that interest rates may not be cut at all. In that case, economic growth would remain flat, and unemployment could rise to about 5 per cent. As investors, however, we are focused on our long-term strategy and on being agile in the face of changing markets.

Outlook

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

This year we have scaled up our internal strategies and now manage approximately 16 per cent of our portfolio. Along with helping us to continue efficiently delivering strong, long-term returns for members, these internal teams bring fantastic insights helping to inform our total portfolio decision making.

We’re continuing to develop our digital advice offering based on what our members have told us their needs are – and this is primarily around their transition to retirement. With 14 per cent of our more than one million members expected to retire in the next five years, we see an incredible opportunity for more of our members to benefit from well-targeted expert help and guidance to help them face the future with confidence.

Our members – around 80 per cent of whom are women working in the health and community services sector – typically work shifts and often engage with us on the go and on mobile devices. Future Planner, our digital help and education platform, is an example of how we’re investing in technology that’s objective is to help members build their financial confidence around planning for retirement. More than two thirds of members that received financial advice from HESTA in FY24 said they felt more confident about their financial situation.

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.

Australia’s $4 trillion in super savings and the investment expertise that manages it is an incredible national advantage that can help address big national challenges, like the energy transition and affordable housing, while earning appropriate risk-adjusted returns for members.

One of the biggest challenges that Australia faces is the energy transition. We need to accelerate the transition to clean energy and away from fossil fuels, as this can help mitigate climate change-related risks to our members’ retirement savings and create new investment opportunities. Australia has an opportunity to be a global powerhouse in renewables, with abundant natural resources backed by institutional investor appetite to invest in opportunities arising from the shift to a low carbon future. Developing our critical minerals and processing industries is one example of the types of exciting potential investment opportunities we’re considering. How Australia leverages its unique advantages in critical minerals, which are critical to the energy transition, can help us as a country prosper as we shift from fossil fuels.

HESTA considers housing and housing supply to be another crucial area where private capital can play a part in helping address an issue that’s holding back our productivity as a nation. It’s these drags on economic productivity that presents broader systemic risks to long-term investors like HESTA. Australia’s housing shortage impacts our members who provide critical services and need to afford housing near their work. The housing crisis is also a drag on economic productivity that presents broader systemic risks to long-term investors like HESTA.

We’re looking at a range of ways to access this potential investment opportunity, including helping to develop the emerging Build to Rent (BTR) sector that can attract more long-term institutional investment. This can provide stable housing choices for Australians while providing investors with potentially stable, long-term income streams.

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?

Our investment team closely monitors markets and has the expertise to take advantage of short-term movements to enhance long-run returns for our members. We dedicate a lot of time to considering various scenarios. For 2025, our key scenario assumes that a Trump presidency involves higher tariffs, dampening global trading, boosting growth via corporate tax rate cuts, but risking inflationary pressure. We are expecting heightened market volatility, however, we remain focused on the long-term outlook.

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?

At HESTA, we view flexibility as a holistic means of supporting our team members to deliver the best work of their careers. So, we see flexible working as an ongoing conversation with our people. We continue to adopt a hybrid working model – allowing for 50 per cent remote work – that supports people to work from home a portion of the time to help balance life and caring responsibilities. The model also allows employees to balance concentrated work and collaborative in-person engagements to create value for HESTA. HESTA has proudly been recognised as a Workplace Gender Equality Employer of Choice for Gender Equality for nine consecutive years and since 2021 has been certified as a Family-Inclusive Workplace by Family Friendly Workplaces.

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 promise?

We’re continuing to experiment with Generative AI at HESTA, ensuring we have clear guidelines and guardrails in place. While we continue to focus on using AI responsibly with our business, we want to be curious, so we’re exploring opportunities through piloting new usages to determine where they can add the most value and generate efficiencies for our organisation with the aim of, ultimately, benefiting HESTA members.