Cbus – transforming Australia and our fund members’ lives

Australia’s Superannuation Guarantee was established thirty years ago this month (July) and our fund, Cbus helped make it happen.

Those of you around the age of fifty may recall a time when building workers and blue collar workers generally didn’t have super. It was considered something for public servants and the white collar employees of large corporations. Perhaps you recall your mum urging you to get a good job in a bank – ‘because they offer super!’

Everyone else had to retire on the age pension and what little savings they had managed to collect over their working lives. It was a time when retirement didn’t have many of the up-sides it has now. There were fewer holidays and other small luxuries, and less capacity to do nice things like spoil the grandchildren.

Building unions were aware of this great unfairness and decided to do something about it. Tom McDonald, the then head of the Building Workers Industrial Union who passed away recently, deserves to be remembered for his far-sightedness. Tom, the building unions, with the ACTU, wanted to establish a precedent that would spread across the entire Australian workforce. So in 1984 they founded Cbus – then named BUSS – to provide a super fund to serve building workers. Back then employers agreed to pay 3 or 4 per cent (depending on turnover) of an employee’s wages as the employer contribution – this being negotiated through several industrial awards.

The idea took off. Other unions followed. Employers joined in. And in 1992 the Keating Government passed laws to create a universal super system.

What a success it has been. Today that initial 3 to 4 per cent employer contribution has risen to 9 per cent and is planned to reach 12 per cent five years from now. The amount of money help in super accounts has grown from just $148 billion to $3.4 trillion and is expected to reach $9 trillion by 2040.

It has given Australia what is widely regarded as the best employee retirement system in the world.

This achievement has been great for blue collar workers, obviously. Super is especially important for them. Their work is hard, physically demanding, and sometimes they need to retire at an earlier age than others. This can sometimes mean a long time to be reliant upon the aged pension or sickness benefits.

During these last almost four decades, Cbus has returned an average of 9.25 per cent to members each year – which through the mathematics of compound interest has made a big difference indeed to many members’ lives. As Cbus itself is now 38 years old, building and construction workers who entered the industry as an apprentice at age 16 in 1984 will this year be turning 58 years of age and will soon be retiring with a lifetime of super payments. Think of how much more comfortable their retirement will be than that of their parents and grandparents.

But the benefits are far wider.

It’s hard to imagine that the establishment of a single retirement fund back in 1984 could have helped transform our country, but that’s what it’s done.

Today, the trillions of dollars in super accounts that belong to Australia’s workers are being invested in job-creating investments, driving up our national prosperity, increasing the quality of life of our people, and, most importantly, delivering returns back to fund members.

I believe it has had a major beneficial effect on our society. Through their funds everyday people have a say in big economic decisions that can change the way we live. It wasn’t that long ago that decisions about investment in Australia came from overseas, with sometimes little thought towards our benefit. Now, Australian funds are available to be invested in things that will set Australia up for the future, like new industries, new infrastructure, education improvements, environmental sustainability and health services. Those funds of course also seek returns for their members by investing overseas, spreading the investment risks.

Importantly, the fact that every Australian now owns part of our capital has given everyone a stake in our economy, and that can only be good for the stability of our democracy.

And that huge amount of capital has helped stabilize our economy as it has negotiated the wild rides of the Global Financial Crisis, the pandemic and now international conflict.

The existence of universal superannuation begun by us at Cbus Super 38 years ago, is undoubtedly the most far-sighted and enduring reforms in Australian history. We should all be proud to be members of our super fund.