2020 CEO Survey: Ian Silk, AustralianSuper

Amid extremely difficult circumstances wrought by the COVID-19 crisis retirement savings were resilient, says AustralianSuper chief Ian Silk.

Ian Silk, chief executive of Australian Super. Picture: Stuart McEvoy for The Australian.

What are the three enduring lessons or changes to flow from COVID-19?

The lesson from COVID for AustralianSuper was the need to focus on three core activities. The first was to continue to manage members’ retirement savings to maximise long-term performance. In extremely difficult circumstances retirement savings weathered the short-term storm relatively well.

The next priority was to help members in immediate need, this included providing $4.7 billion through the early release scheme and also providing support and advice to members more broadly.

The third activity was to continue to play a role in supporting the Australian economy to help generate economic activity and jobs. In the COVID induced market volatility during March – June, we supported 20 Australian companies with $380 million in new capital for their businesses.

How would you rate the shape of the Australian economy as we head into the new year?

While, Australia is now technically out of recession, the downturn was deep and the recovery will take a significant time. There still remain major challenges, for example, in the short term there is a risk of higher unemployment as Australians exit government support especially the JobKeeper program. Getting the unemployment rate down to its pre-Covid level will take many years and needs to be a major focus of governments.

Commonwealth budget deficits will remain large even with stronger economic growth. Unlike the deficit-cutting drive that followed the GFC, however, there seems to be little appetite for fiscal austerity this time given that funding costs are so cheap. Provided the Australian economy can post firm growth then these low debt-servicing costs will ensure that government debt ratios in Australia do not get out of hand.

What three reforms are needed to sustainably grow the economy?

There is a need to increase investment in industry and training. We need to re-skill and reorient our people and businesses towards higher skilled and higher value-add industries, such as technology and healthcare.

Another key area is infrastructure investment and development, with a focus on both the future energy and transport needs of the economy in an increasingly technology-savvy and energy-conscious society. AustralianSuper is helping by investing in start-ups and large-scale publicly listed businesses with more than $380 million provided in recapitalisations over the COVID-19 period

We also need urgent reform and support in the aged care, childcare and social housing sectors. Australia needs to be better at helping and caring for the more vulnerable members of society and investment in these sectors would provide the flow through economic benefits of increased investment and more jobs.

What are the three best growth opportunities for your company in 2021?

Delivering top quartile long-term investment returns for members always provides the best opportunity for the Fund to continue to grow to benefit members. We saw more than 400,000 new members join AustralianSuper last financial year which was a record for the Fund.

Importantly, we also saw 71,000 new businesses join the Fund in the 2019/20 financial year, while 18,000 new businesses have joined in the current financial year. Having a strong focus on helping businesses manage their super efficiently will result in further growth opportunities, which in turn benefits members.

What impact will digital transformation have on your company?

Technology saved the day during the year for both super fund members and businesses. There has obviously been a fundamental shift in the way people work and also in the way they interact with their retirement savings. Mobile app visits nearly doubled for the Fund, giving a clear indication of how members are increasingly using mobile technology to engage with their super. We also had over 20 million visits to the website last financial year, which is a 72 per cent increase from five years ago. This digital transformation will support the Fund to simplify our operations, reduce cost, innovate for the purpose of delivering improved products, services and outcomes for members.

How would you rate business, state and federal government performance this year?

Over the past year we saw a range of different responses to the economic and social challenges of COVID-19 across Australia and around the world. It was a time of great uncertainty and it may be too soon to know which responses were most appropriate.

What this period has shown is that all leaders, whether in government, business or the community, need to stand up and explain their decisions, ensure their policies are backed by evidence and take the time to ensure the community understands what the impact will be on them and their families.

Australian businesses have generally performed well in what has been an extremely difficult period. The shift to an online-only environment in such a short time frame was remarkable. In financial services there has been stronger positives during COVID than in previous financial crisis.

Federally, the Government made the right decision to undertake stimulus at a time when the nation needed it most.