1 00:00:05,920 --> 00:00:07,760 Speaker 1: Welcome to Fear and Greed Q and A where we 2 00:00:07,840 --> 00:00:12,000 Speaker 1: ask and answer questions about business, investing, economics, politics and more. 3 00:00:12,039 --> 00:00:16,120 Speaker 1: I'm Sean Alma. We speak plenty about Australia's superannuation sector, 4 00:00:16,160 --> 00:00:19,720 Speaker 1: which is now worth a staggering four point three trillion dollars, 5 00:00:19,960 --> 00:00:22,840 Speaker 1: and how funds are looking offshore for opportunities to invest. 6 00:00:23,360 --> 00:00:26,680 Speaker 1: The flip side is whether Australia is an appealing place 7 00:00:26,760 --> 00:00:30,160 Speaker 1: for global fund managers to invest. Today in Sydney, Australia's 8 00:00:30,160 --> 00:00:34,080 Speaker 1: Ambassador to the US, Kevin Rudd, will be interviewing Stephen Schwartzman, 9 00:00:34,520 --> 00:00:37,559 Speaker 1: chair and co founder of Blackstone as part of the 10 00:00:37,600 --> 00:00:40,960 Speaker 1: Sydney Investment Summit, and event focused on promoting both Sydney 11 00:00:41,000 --> 00:00:44,280 Speaker 1: and Australia as the destination for global investment. The summit 12 00:00:44,400 --> 00:00:46,640 Speaker 1: is being held by T Corp, the new South Wal's 13 00:00:46,640 --> 00:00:49,880 Speaker 1: Treasury Corporation. Daniel Mookie is the new South Wales Treasurer 14 00:00:49,880 --> 00:00:52,159 Speaker 1: and he joins me in the studio this morning. Treasurer. 15 00:00:52,240 --> 00:00:53,599 Speaker 1: Welcome to Fear and Greed Q and a. 16 00:00:53,640 --> 00:00:54,400 Speaker 2: Good morning Sean. 17 00:00:54,440 --> 00:00:57,360 Speaker 1: Thank you for having me on upfront. Why should a 18 00:00:57,400 --> 00:01:00,680 Speaker 1: global fund manager invest in Australia. 19 00:01:00,680 --> 00:01:03,520 Speaker 2: Because we have a world class workforce, we have an 20 00:01:03,520 --> 00:01:06,760 Speaker 2: amazing tech sector, and increasingly we have some very deep 21 00:01:06,880 --> 00:01:11,080 Speaker 2: capital markets. It's been created by our national treasure, which 22 00:01:11,120 --> 00:01:13,560 Speaker 2: is our superannuation system. As you rightly say, it's worth 23 00:01:13,600 --> 00:01:16,560 Speaker 2: four point thrillion trillion dollars today, but in a decade 24 00:01:16,640 --> 00:01:19,240 Speaker 2: time it's likely to be worth somewhere close to twelve trillion. 25 00:01:19,800 --> 00:01:22,840 Speaker 2: And it's a story the world is paying more attention 26 00:01:22,920 --> 00:01:26,039 Speaker 2: to how our nation of twenty seven million people have 27 00:01:26,160 --> 00:01:29,000 Speaker 2: become the world's biggest savers. And if you start to 28 00:01:29,000 --> 00:01:31,840 Speaker 2: think about our superannuation sector very soon, it's going to 29 00:01:31,920 --> 00:01:36,360 Speaker 2: dwarf the sovereign wealth funds of places like the UAE, 30 00:01:36,760 --> 00:01:40,760 Speaker 2: Norway and the likes, And so it's an incredibly interesting story. 31 00:01:40,840 --> 00:01:43,720 Speaker 2: In our message to the world is that if you 32 00:01:43,800 --> 00:01:46,280 Speaker 2: want to manage this money, we want you to do 33 00:01:46,360 --> 00:01:49,040 Speaker 2: more of it from New South Wales and from Australia. 34 00:01:49,520 --> 00:01:53,680 Speaker 1: So are you asking those big global funds to come 35 00:01:53,720 --> 00:01:57,560 Speaker 1: into Australia and operate out of here? Or because the 36 00:01:57,640 --> 00:01:59,120 Speaker 1: flips on to what you're saying, when you have so 37 00:01:59,200 --> 00:02:02,720 Speaker 1: much money slashing around Australia, maybe asset prices here are 38 00:02:02,760 --> 00:02:05,920 Speaker 1: relatively high. So if I'm an international player. Do I 39 00:02:06,000 --> 00:02:07,960 Speaker 1: want to come in and buy something in Melbourne or 40 00:02:07,960 --> 00:02:11,919 Speaker 1: Sydney or Brisbane or an inn equity asset here when 41 00:02:12,160 --> 00:02:14,720 Speaker 1: the valuations might be relatively high because of the demand 42 00:02:14,720 --> 00:02:16,680 Speaker 1: for it. I'm kind of trying to work out what 43 00:02:16,720 --> 00:02:17,480 Speaker 1: you're asking here. 44 00:02:17,680 --> 00:02:19,760 Speaker 2: Well, firstly, a lot of these funds are already here 45 00:02:20,600 --> 00:02:23,080 Speaker 2: and we're wanting them to scale up more and to 46 00:02:23,160 --> 00:02:27,600 Speaker 2: think about how they marshal their forces in the wider 47 00:02:27,639 --> 00:02:31,400 Speaker 2: region from Sydney and from New South Wales. Very first 48 00:02:31,400 --> 00:02:34,480 Speaker 2: message we want to send today, But the second message 49 00:02:34,520 --> 00:02:37,840 Speaker 2: is quite right, which is we want to tell more 50 00:02:37,840 --> 00:02:41,800 Speaker 2: of his story to Australia because the rate of growth 51 00:02:41,840 --> 00:02:45,720 Speaker 2: of our superannuation industry is now so fast that we 52 00:02:45,760 --> 00:02:49,919 Speaker 2: can't absorb all this investment domestically. We will have too 53 00:02:50,000 --> 00:02:52,840 Speaker 2: much money chasing too few assets, so a lot of 54 00:02:52,840 --> 00:02:55,400 Speaker 2: this money will need to go off shore anyway. And 55 00:02:55,800 --> 00:02:58,360 Speaker 2: that's a good thing because it helps us pay for 56 00:02:58,800 --> 00:03:02,440 Speaker 2: a tremendous retirement for working Australians. But by the same token, 57 00:03:02,520 --> 00:03:07,560 Speaker 2: it's becoming increasingly a big economic opportunity for us in 58 00:03:07,600 --> 00:03:11,239 Speaker 2: the region, especially outside of Japan and a few of 59 00:03:11,280 --> 00:03:13,800 Speaker 2: the other advanced economies in this region. There's very few 60 00:03:13,840 --> 00:03:17,560 Speaker 2: countries that have their national savings pool growing at the 61 00:03:17,560 --> 00:03:20,040 Speaker 2: clip that oursies. So it's a good story, it's a 62 00:03:20,040 --> 00:03:21,919 Speaker 2: good message, and it's a good opportunity and we want 63 00:03:21,919 --> 00:03:22,400 Speaker 2: to seize it. 64 00:03:22,600 --> 00:03:25,200 Speaker 1: Okay, and I presume I mean you're obviously New South Wales, 65 00:03:25,240 --> 00:03:27,600 Speaker 1: but we're talking Australia wide here in terms of the 66 00:03:27,639 --> 00:03:29,520 Speaker 1: opportunities for global funds. 67 00:03:29,800 --> 00:03:32,000 Speaker 2: Yeah, I don't see this as being competitive to the 68 00:03:32,040 --> 00:03:35,120 Speaker 2: other states. In fact, we want every state to do well. 69 00:03:35,520 --> 00:03:38,040 Speaker 2: When every other state is doing well, so is the nation. 70 00:03:38,120 --> 00:03:40,480 Speaker 2: And when New South Wales is doing well, so is Australia. 71 00:03:40,560 --> 00:03:42,840 Speaker 2: But the coral is also true. If the other states 72 00:03:42,880 --> 00:03:45,680 Speaker 2: are in trouble, it tends to become New South Wales's problem. 73 00:03:46,000 --> 00:03:49,040 Speaker 2: So from our perspective, we've always, we'd like to say, 74 00:03:49,080 --> 00:03:51,640 Speaker 2: always led Australia's connection with the world. We're going to 75 00:03:51,680 --> 00:03:53,480 Speaker 2: continue to do that. We want to deepen that on 76 00:03:53,520 --> 00:03:56,640 Speaker 2: behalf of the entire country. And we're very comfortable with 77 00:03:56,720 --> 00:04:01,480 Speaker 2: cities like Melbourne, Adelaide, Brisbane, per Hobart sitting in our 78 00:04:01,480 --> 00:04:04,640 Speaker 2: slipstream because we think that if we can forge these 79 00:04:04,720 --> 00:04:07,680 Speaker 2: connections here, it will be to the benefit of the 80 00:04:07,800 --> 00:04:08,280 Speaker 2: entire nation. 81 00:04:08,680 --> 00:04:11,640 Speaker 1: Do you think global funds investing here can get the 82 00:04:11,720 --> 00:04:14,840 Speaker 1: returns that they can get elsewhere, Because at the end 83 00:04:14,840 --> 00:04:18,440 Speaker 1: of the day, they're investing people's money, people's retirement incomes 84 00:04:18,440 --> 00:04:21,200 Speaker 1: out of the US or Canada or wherever they want 85 00:04:21,200 --> 00:04:24,320 Speaker 1: a return. Can they do that in Australian infrastructure or 86 00:04:24,320 --> 00:04:26,120 Speaker 1: in property or wherever. 87 00:04:26,480 --> 00:04:28,280 Speaker 2: Well, perhaps the best way I can answer that, it's 88 00:04:28,320 --> 00:04:29,840 Speaker 2: just by telling you a story about when I met 89 00:04:29,839 --> 00:04:31,800 Speaker 2: with some of them in New York earlier this year, 90 00:04:31,800 --> 00:04:34,520 Speaker 2: which was what led to the decisions to hold today's summit. 91 00:04:35,040 --> 00:04:36,599 Speaker 2: I'm sitting down with some of the leaders was on 92 00:04:36,640 --> 00:04:40,960 Speaker 2: the world's most powerful private sector asset managers, who are 93 00:04:40,960 --> 00:04:46,080 Speaker 2: saying that when it comes to allocating capital, America remains 94 00:04:46,080 --> 00:04:48,680 Speaker 2: a very attractive market. But outside of that, we have 95 00:04:48,760 --> 00:04:51,160 Speaker 2: the cleanest dirty shirts. As someone put it, in. 96 00:04:51,000 --> 00:04:52,480 Speaker 1: The cleanest dirty shirt. 97 00:04:53,080 --> 00:04:55,880 Speaker 2: It was a rememborable turn of phrase, I say, But 98 00:04:55,920 --> 00:04:58,080 Speaker 2: what they meant was is that, well, we've got rule 99 00:04:58,080 --> 00:05:02,000 Speaker 2: of law, we've got stable politics, we've got an incredibly 100 00:05:02,040 --> 00:05:05,520 Speaker 2: interesting tech sector that is creating a lot of world 101 00:05:05,600 --> 00:05:10,520 Speaker 2: leading technologies, especially in areas like quantum computing. There's a 102 00:05:10,560 --> 00:05:13,720 Speaker 2: lot of opportunity here and for them, we're allocating here 103 00:05:13,960 --> 00:05:18,240 Speaker 2: relative to places like Europe is looking very attractive as well, 104 00:05:18,279 --> 00:05:22,080 Speaker 2: and increasingly allocating here relative to Japan is also looking attractive. 105 00:05:22,120 --> 00:05:23,840 Speaker 2: So from our perspective, we think we have a lot 106 00:05:23,880 --> 00:05:30,160 Speaker 2: to offer. But increasingly this is an area where New 107 00:05:30,200 --> 00:05:33,159 Speaker 2: South Wales and Australia is becoming renowned as a place 108 00:05:33,200 --> 00:05:36,480 Speaker 2: in which you can combine not just deep capital markets, 109 00:05:36,560 --> 00:05:41,040 Speaker 2: but actual opportunities with new technology. For me, in five 110 00:05:41,120 --> 00:05:44,960 Speaker 2: years time, success looks like our tech sector a meshed 111 00:05:45,200 --> 00:05:48,800 Speaker 2: with our financial sector, I mesh with our universities, creating 112 00:05:48,839 --> 00:05:51,040 Speaker 2: industries of the future that then create the jobs and 113 00:05:51,040 --> 00:05:54,320 Speaker 2: the wages for working people. And that's what we're trying. 114 00:05:54,400 --> 00:05:56,680 Speaker 2: That is the virtuous cycle we're trying to unleash. 115 00:05:57,440 --> 00:06:00,160 Speaker 1: Is there a chance that super will be forced to 116 00:06:00,279 --> 00:06:03,840 Speaker 1: doing stuff that it doesn't necessarily want to do? So 117 00:06:04,040 --> 00:06:08,239 Speaker 1: everything you said, Daniel Murky is one hundred percent correct. 118 00:06:08,240 --> 00:06:12,000 Speaker 1: You can't argue with that. But should it super funds 119 00:06:12,440 --> 00:06:16,280 Speaker 1: be pressured by governments into going into certain areas that 120 00:06:16,760 --> 00:06:20,720 Speaker 1: with the kind of the good of the nation at heart, 121 00:06:21,120 --> 00:06:22,919 Speaker 1: or should they just worry about their members? 122 00:06:23,320 --> 00:06:24,760 Speaker 2: No, I mean I definite think there's a role for 123 00:06:24,800 --> 00:06:28,680 Speaker 2: super funds to play in meeting the nation's challenges and 124 00:06:28,720 --> 00:06:30,880 Speaker 2: particularly their social mission. But I think what you're asking 125 00:06:30,920 --> 00:06:32,200 Speaker 2: me is that we're going to have to coerce them 126 00:06:32,200 --> 00:06:35,040 Speaker 2: into doing it. I don't think so. I don't think 127 00:06:35,080 --> 00:06:37,599 Speaker 2: that we are where perhaps other parts of the world 128 00:06:37,640 --> 00:06:40,400 Speaker 2: are when it comes to indebted governments that are therefore 129 00:06:40,400 --> 00:06:42,960 Speaker 2: having to think about whether you introduce mandates on super 130 00:06:43,000 --> 00:06:44,920 Speaker 2: funds and pension funds to buy bonds. So I don't 131 00:06:44,920 --> 00:06:46,920 Speaker 2: think we have anyone need that. But I actually think 132 00:06:46,920 --> 00:06:49,440 Speaker 2: that the approach that he's working is far more of 133 00:06:49,440 --> 00:06:51,520 Speaker 2: a carrot brased approach than a stick based approach. I 134 00:06:51,560 --> 00:06:53,440 Speaker 2: actually think that when you talk to all the super funds, 135 00:06:53,640 --> 00:06:56,880 Speaker 2: there's no shortage of opportunities that they are seeing in 136 00:06:56,920 --> 00:06:59,640 Speaker 2: the domestic market. But what they are saying is that 137 00:06:59,640 --> 00:07:02,560 Speaker 2: there's all of red tape that slows down their capacity 138 00:07:02,600 --> 00:07:05,159 Speaker 2: to deploy capital. But also I think the way in 139 00:07:05,200 --> 00:07:08,440 Speaker 2: which they're judged their performance is judged at a national 140 00:07:08,520 --> 00:07:11,840 Speaker 2: level by our prudential regulators probably needs to change. I 141 00:07:11,840 --> 00:07:15,200 Speaker 2: think the performance test that was established back in two 142 00:07:15,200 --> 00:07:16,920 Speaker 2: thousand and eight had done a very good job of 143 00:07:16,960 --> 00:07:18,960 Speaker 2: serving its popus, but we've got to make sure it remains. 144 00:07:19,560 --> 00:07:20,920 Speaker 1: In the last couple of days that come out and 145 00:07:20,920 --> 00:07:23,240 Speaker 1: said they're not going to change, or Jim Chalmers came out, 146 00:07:23,240 --> 00:07:23,720 Speaker 1: I think. 147 00:07:24,360 --> 00:07:28,280 Speaker 2: That now my understanding is that we're having out of 148 00:07:28,320 --> 00:07:32,280 Speaker 2: the economic roundtable, we're having a sensible conversation about what 149 00:07:32,360 --> 00:07:34,720 Speaker 2: is the performance test. We're definitely keeping one. It's just 150 00:07:34,760 --> 00:07:38,000 Speaker 2: what's going to be counted as performance and what are 151 00:07:38,160 --> 00:07:39,920 Speaker 2: the tests that we're subjecting funds too. I think that 152 00:07:40,080 --> 00:07:42,960 Speaker 2: gets the balance right as well. But I'll be honest 153 00:07:43,000 --> 00:07:44,680 Speaker 2: with you, Sean, when I have a lot of super 154 00:07:44,680 --> 00:07:48,000 Speaker 2: funds telling me that it's easier for them to spend 155 00:07:48,200 --> 00:07:53,320 Speaker 2: Australian retiree savings helping London deal with its housing challenge 156 00:07:53,360 --> 00:07:55,520 Speaker 2: than it is helping with Sydney. And I do think 157 00:07:55,520 --> 00:07:57,480 Speaker 2: that when you're being told that you've got to act 158 00:07:57,520 --> 00:07:59,200 Speaker 2: and you've got to see, well, what's stopping them from 159 00:07:59,240 --> 00:08:02,680 Speaker 2: sort of investing in this Because we need the investment, 160 00:08:02,840 --> 00:08:07,000 Speaker 2: they have the money. There's no shortage of opportunities to 161 00:08:07,040 --> 00:08:09,320 Speaker 2: add to supply, which is the way in which ultimately 162 00:08:09,400 --> 00:08:12,640 Speaker 2: we will tame this housing crisis. So they are the type 163 00:08:12,680 --> 00:08:15,240 Speaker 2: of practical tests that I think we should be applying, 164 00:08:15,800 --> 00:08:17,120 Speaker 2: but I don't think we're going to need to coerce 165 00:08:17,160 --> 00:08:17,920 Speaker 2: them into doing it. 166 00:08:18,080 --> 00:08:21,280 Speaker 1: Okay, you've talked about superinnuation and having soft power, and 167 00:08:21,320 --> 00:08:23,320 Speaker 1: it's something I haven't thought a lot about, but it's 168 00:08:23,400 --> 00:08:26,120 Speaker 1: very true because we have this huge amount of money 169 00:08:26,520 --> 00:08:27,440 Speaker 1: and that is power. 170 00:08:27,560 --> 00:08:32,760 Speaker 2: It is incredible power, and increasingly, when the world is 171 00:08:33,320 --> 00:08:36,959 Speaker 2: entering a very capital intensive phase of the economic cycle, 172 00:08:37,040 --> 00:08:41,560 Speaker 2: when you have companies looking to deploy needing to deploy 173 00:08:41,600 --> 00:08:45,080 Speaker 2: billions of dollars to build an AI digital infrastructure ecosystem, 174 00:08:45,080 --> 00:08:47,400 Speaker 2: when you have a climate crisis that needs to be solved, 175 00:08:47,400 --> 00:08:50,160 Speaker 2: when you have much parts of the advanced world having 176 00:08:50,200 --> 00:08:51,760 Speaker 2: to deal with housing challenges, and when you have a 177 00:08:51,800 --> 00:08:54,080 Speaker 2: lot of the developing world that is hungry for investment 178 00:08:54,080 --> 00:08:58,160 Speaker 2: to grow their economies as well. Having spare change gives 179 00:08:58,200 --> 00:09:04,559 Speaker 2: you soft power. Combine that with Australia's reputation as a democracy, 180 00:09:04,960 --> 00:09:10,440 Speaker 2: rule of law, as a friendly country, it's open. We 181 00:09:10,440 --> 00:09:13,600 Speaker 2: should not under sell what we've built here, and part 182 00:09:13,600 --> 00:09:14,920 Speaker 2: of what we're trying to do today is to just 183 00:09:14,960 --> 00:09:18,160 Speaker 2: let the Australian people know that this is an amazing achievement. 184 00:09:18,480 --> 00:09:22,880 Speaker 2: It's adding to our arsenal of influence, and we should 185 00:09:22,880 --> 00:09:24,960 Speaker 2: be thinking strategically about how we use it so it's 186 00:09:25,000 --> 00:09:26,800 Speaker 2: for the benefit of the nation, not just the benefit 187 00:09:26,840 --> 00:09:28,360 Speaker 2: of those who just have a super account. 188 00:09:28,480 --> 00:09:30,360 Speaker 1: I can't let you go without asking about Kevin rud 189 00:09:30,400 --> 00:09:32,000 Speaker 1: because you're spending to him later on today. I think 190 00:09:32,000 --> 00:09:36,040 Speaker 1: it's the first time he's spoken post the White House discussion. 191 00:09:37,360 --> 00:09:38,400 Speaker 1: What did you make of all that? 192 00:09:38,480 --> 00:09:40,520 Speaker 2: Well, I happen to have landed. I think a pretty 193 00:09:40,960 --> 00:09:44,760 Speaker 2: I think I'm the only person who's interviewing Kevin as well. 194 00:09:45,200 --> 00:09:47,120 Speaker 2: What I made of it was is it. I thought 195 00:09:47,160 --> 00:09:50,000 Speaker 2: he did a great job. And I think that anyone 196 00:09:50,040 --> 00:09:54,240 Speaker 2: who has seen Kevin in situe in the US knows 197 00:09:54,280 --> 00:09:58,720 Speaker 2: that he is Australia's most connected person. He's a person 198 00:09:58,760 --> 00:10:01,760 Speaker 2: who is as respected on it by the political power 199 00:10:01,760 --> 00:10:04,480 Speaker 2: brokers of Washington as he used by the financial power 200 00:10:04,520 --> 00:10:06,800 Speaker 2: brokers of Wall Street. And I think that he's done 201 00:10:06,800 --> 00:10:09,040 Speaker 2: a really great job dealing with one of the most 202 00:10:09,040 --> 00:10:11,600 Speaker 2: complicated administrations I think we'll ever have to deal with. 203 00:10:12,240 --> 00:10:16,200 Speaker 2: And I think that pulling off what he pulled off, 204 00:10:16,679 --> 00:10:18,000 Speaker 2: I think hats off to him. 205 00:10:18,200 --> 00:10:20,840 Speaker 1: No one quite connects like Kevin rud I've got to say, 206 00:10:20,840 --> 00:10:22,200 Speaker 1: and that's always been his gay. 207 00:10:22,440 --> 00:10:25,080 Speaker 2: Yeah, he is relentless and he doesn't stop. 208 00:10:25,200 --> 00:10:27,480 Speaker 1: Sure does. Treasurer thanks for talking to Fear and Greed. 209 00:10:27,520 --> 00:10:28,400 Speaker 2: Thanks for having me on. 210 00:10:28,559 --> 00:10:31,200 Speaker 1: That was New South Wales Treasurer Daniel MOOKI. I'm Sean 211 00:10:31,240 --> 00:10:33,240 Speaker 1: Almer and this is Fear and Greed, Q and DA