The Grim Face of Choice

Camille Howard asks one of the more public faces of super, Bernie Fraser, what he thinks about super choice legislation, and finds he’s not impressed - He sees expensive confusion and shadowy games on an uneven playing field.

The way he tells it, Bernie Fraser’s life is fairly unremarkable. He talks with the same enthusiasm about his farm—where he tends racehorses and a few cattle—as his rise to the top job at the Reserve Bank of Australia (RBA) and his current role as independent director for industry super funds.

Describing himself as “pretty straight up and down”, he gets to the point with little fanfare. Born and bred in Junee, approximately 200kms from Canberra, Fraser went to the University of New England in Armidale, and in 1961 went to Canberra to work in the public service. “In those days, Canberra was a very small town—around 30,000 people—and there was no lake, just a muddy river with a couple of wooden bridges.”

The landscape changed but Fraser’s career remained constant, spending all his time in the public service, mostly in the treasury. Highlights include travelling to London in the late 60s as a European representative, and being appointed treasury secretary in mid-84. In 1989, he went to the RBA, serving a seven-year term as governor. When he retired from that role in 1996, he settled into life on a farm just outside the nation’s capital.

These days, his main professional interest is his work with industry super funds. He is an independent director of three—Australian Retirement Fund, C-Bus, and STA—and two to three days each week are spent travelling to Sydney or Melbourne for board meetings. He also chairs the Victorian government super fund, which gives him more than enough authority to give us a no-holds-barred look at how super choice will really affect our business lives.

Serious Doubts

Getting straight to the point, Fraser says he’s not convinced super choice is a good thing. At least, he’s not sure the motives behind the legislation are completely magnanimous.

“Is it a good thing for employees to have a choice of where their super money goes? In the abstract, it is. You can’t really argue against people having choice. But in reality is it a good thing? Well, that depends. If there are large numbers of employees currently in funds they’d rather not be in, then obviously it is a good thing. But there’s no evidence that this is so, and if that is the case you have to ask why is all this upheaval about to occur to give people choice?