Demographics may be the main justification for the modern super system but listening to Bill Kelty speak, it was equity, not age, that motivated the early founders of universal superannuation.
As secretary of the ACTU from 1983 to 2000, Kelty was the pivotal figure in the union movement’s push to integrate super into industrial awards.
As a range of unions pressed for super coverage, and then the three per cent productivity wage trade off extended it to most workers in the late 1980s, the major motivation was equity.
Kelty says although he was cognisant of demographic concerns, the union push for super was never intended to supplement or substitute the pension.
“If you looked at the workforce [in the 1980s], superannuation was a very significant defining difference and a cause of great inequality,” Kelty says. “It was very much a benefit for about 10 to 15 per cent of the workforce.
“This was a push from traditional blue collar areas for the right to superannuation. We wanted to show that it wasn’t just a white collar benefit, that all workers should have it, not just some.”
Despite helping lay the foundation stones of the modern system, Kelty does not lay claim to a master plan, or any defining moments of inspiration. Instead there was a broad strategy for dealing with productivity wage increases, and a patience to wait for the opportunity.
“We had a view of superannuation and planned these things out to the extent that you can plan them,” Kelty says. “A lot of people will pretend they have some sort of giant plan but they always have it in retrospect.”
Although super’s development could not be attributed to one person or plan, it was a homegrown policy and was not inspired by any international model, Kelty says.
“We knew super had to be dealt with. It was a source of inequity, and with an Accord on wages, we saw that superannuation was an area of flexibility.”
In nominating Kelty as the most influential trustees or fund executives, one member of Super Review’s panel said: “On the basis that Paul Keating is the architect or main salesman of the SG system, Kelty had the vision to see that we had to have a national superannuation scheme and he really pushed hard at the Government to achieve that… If it wasn’t for those two guys pushing for the system we have at the moment, the industry would be nothing like it is today.”
But the panel also acknowledged that Kelty has sat on the board of several large industry funds, helping to shape them into what they have become today.
Kelty remains heavily involved in super as a director of the Superannuation Trust of Australia and the Australian Retirement Fund (ARF). His approach as a trustee is based on the twin challenges of day-to-day decision making and the broader responsibility of identifying inadequacies in the market.
He says an emphasis on finding gaps in the market has seen industry funds pioneer infrastructure investment models, lead the market in private equity, establish their own property vehicles and launch Super Members Home Loans, the first securitisation product in Australia.
Kelty spies future opportunities in developing more effective public housing investment models, similar to that in the United States, and in some form of enhanced bond arrangements in light of declining interest rates and reduced government debt.
“If you focus just on the future, it becomes a theoretical exercise and you forget the current responsibilities,” Kelty says of his role as a trustee. “But if you just focus on the day-by-day issues and have no vision, you pay the price for that too.”
After many years of involvement in superannuation, Kelty says he will probably play a lesser role in the future. With his positions at Linfox, the AFL and Deakin University, amongst others, he feels the need to reallocate his personal resources.
“There is a limit to how much you can do in life,” he says, “and I see myself reducing the superannuation side of things.”
