2020 CEO Survey: Justin Arter, Cbus Super

Superannuation has a vital role in recovery and nation building from a crisis, says Cbus chief Justin Arter.

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

An enduring lesson is the role that superannuation holds in recovery and nation building from a crisis — the role of active investors with a long-term horizon.

We quickly responded to sharemarket falls around the world, as our investment models are built to adjust to challenges. We moved on to manage the requirements of the early access scheme and our business responded well. As of the end of November, Cbus has paid out more than $2.2bn in early release payments to nearly 270,000 members.

The dynamic policy environment this year has been challenging for long-term investors. We also think that the COVID-19 crisis has illustrated again that more work needs to be done by governments of all shapes and sizes, regulators and the finance industry to better harness long-term, friendly domestic capital like superannuation money, to help finance the next generation of infrastructure and take pressure off fiscally constrained governments.

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

While we are expecting continued recovery in activity and a grinding improvement in the labour market, we do not anticipate the level of economic activity will be back to pre-COVID-19 levels until late in 2021/early 2022.

We expect policy to continue to support the recovery. Interest rates to remain lower for even longer. And fiscal policy to transition from supporting cash flows and cushioning the dislocation in the labour market, to investment and reskilling/retraining to support private sector recovery and productivity growth.

What three reforms are needed to sustainably grow the economy?

We would like to see the strong collaboration and co-ordination that was exemplified by the National Cabinet experiment continue.

Our members want to see policy certainty in superannuation policy, the legislated Super Guarantee rise in 2021 not be tampered with and more generally just an end to endless reviews.

We supported the superannuation early release scheme in 2020 but believe it should be a one-off. Either you have a compulsory system or you don’t, there should be no further adventurism in this space.

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

To continue to invest in businesses with strong sustainable cash flows and aligned to secular growth opportunities.

Continue to work with governments to look for partnership opportunities. Our social and affordable housing investments are a strong example of continuing growth opportunities in 2021.

There is a valuable role in our portfolio for property and infrastructure with approximately a quarter of our MySuper growth portfolio in these asset classes.

What impact will digital transformation have on your company?

Cbus has been responding to the increasing digital transformation of business for some years now. And will continue to focus on enhancing this capability as we progressively move digital assets from a third-party administrator to in-house.

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

Industry super funds like Cbus are a product of consensus, in our case building industry employers and unions putting their differences aside and to work together for fund members.

So this consensus approach was a key, early feature of the COVID-19 response. The strong policy response — JobKeeper and increased JobSeeker, as well as stimulus of economy — are factors which have been critical to our members and to the economy.