AustralianSuper a ‘lighthouse’ with $1bn Covid capital boost

Mega-fund Australian Super says it has provided close to $1bn in capital to Australian since Covid arrived, saving them a fortune on fees in the process.

Dr Don Russell is chair of Australian Super

AustralianSuper has provided close to $1bn directly in new capital to Australian companies from QBE to Transurban since Covid began last year, highlighting the constructive role it has played.

In an interview, chairman Don Russell explained the $220 billion fund could provide a “lighthouse” for companies with good business models needing time, while at the same time making life uncomfortable for those that were underperforming.

The range of companies supported included Computershare, Reece Plumbing and Pilbara Minerals, and the equity injections were done outside the normal equity capital market raisings that line investment banks’ pockets.

In round terms, the companies receiving AustralianSuper money saved a collective $20 million in fees and compares to the $46.3 billion raised in the market last calendar year.

Russell was primarily speaking about his recent book on leadership in which he divided politicians into the “pleasers” and the “doers”, with the latter having the ability to frame an issue in a compelling way and stare down the opposition in delivering a solution to the problem.

The pleasers try not to upset people and follow polling closely, while the doers identify problems and attempt to educate and inform, gaining credit for doing something worthwhile.

As the chair of Australia’s biggest super fund, he is an unashamed champion of the industry and said the recent decision to proceed with increases in the superannuation guarantee came with wiser heads understanding “it’s always good to feed people”.

The realisation came that without the scheduled 2.5 per cent increase in the superannuation guarantee, the chance of offsetting wage increases was zero.

The reverse argument is that by granting the legislated increase from 9.5 per cent to 12 per cent, wages were less likely to increase.

Russell believes that, despite the push by a group of backbenchers, the energy went out of the debate.

The book presents the case for including policy people in ministerial offices, citing Daniel Kahneman’s book Thinking Fast and Slow, which highlights the conflict for a minister who is a political warrior expected to do both and be a chief executive at the same time.

Those who can discipline themselves to do both are the ones who prosper.

Russell, a former adviser to Paul Keating and Australian ambassador to Washington, said while the economy had bounced back quicker than expected, it was still an open question whether it would grow sustainably.

Structural changes were needed, which is more difficult in a world of conflict.