“The fact that there are around 11,000 Australians who have more than $5 million in super, that’s not what super is meant to be about,” said Blakey. “It’s an uncomfortable topic … because it can feel quite personal. But we would definitely support that being addressed.”
‘I don’t think it’s just about the dollars. I think it’s also the message that sends about unpaid caring work,’
Debby Blakey, chief executive of HESTA
Blakey pointed out that someone with $5 million in super would receive about $70,000 a year in tax concessions – more than many HESTA members earn in a year, with a third of the fund’s members earning below $50,000 a year.
“The government is giving a concession of $70,000 to people who you really would question if they need that,” she said.
Another focus for HESTA this year, Blakey said, was increasing its engagement with companies to drive action on climate change. The fund made waves last year when it declared it would use its small stake in AGL to side with tech billionaire Mike Cannon-Brookes and vote against the planned demerger of the energy company’s coal-fired power generation business, arguing the move would not help decarbonisation of the economy.
In September, the fund placed four of Australia’s largest energy companies on a “watch list”, chasing them for firmer guidance on their stated plans to meet the goals set by the Paris Agreement. Origin has since been removed from the list, but Blakey said conversations with the other companies were ongoing.
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“I think they clearly understand what it is we are seeking. I think how they’re strategically addressing that for some of them, it’s still a work in progress,” she said.
Is this kind of outspoken activism what members want from their super fund? Blakey is adamant it is.
“We are increasingly seeing Australians who want to be in a fund that takes a stand on issues that matter for the future, be that climate change, be it gender diversity,” she said.
“We will have small pockets of members who want us to do more, who want us to do it differently, who perhaps want us to divest. We believe very strongly that the bigger impact we can have is actually through remaining invested and engaging actively. But there is sometimes a different view.”
Last year was a rocky one for super funds, with a volatile market making it harder to achieve positive returns. Many funds posted negative returns for the first time since the GFC. Median growth funds were down about 4 per cent for the year, according to Chant West, meaning the average balance of $145,670 will have lost $5286 over the calendar year.
HESTA was not spared. Its balanced growth option was down 3.71 per cent in 2022, though still up 6 per cent over the past five years. While acknowledging ongoing issues of geopolitical instability, the energy crisis, inflation pressures and interest rate rises, Blakey is hopeful this year’s June results will show much stronger returns.
“The challenge for us is inflation, high levels of inflation and obviously, the rising interest rate market has not helped. And there’s still so much uncertainty with the geopolitical situation. So I think it’s very hard to predict,” she said.
Blakey said the fund aimed to reach $100 billion under management in coming years, and was undergoing a process of building its internal capability to manage choppy markets, including in areas such as Australian equities, fixed interest, and cash.
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