Tomorrow, thirty-four years after I nominated a 12% wage equivalent as the appropriate level of compulsory contribution into superannuation, the system finally matures.

This means that every young person joining the workforce this year will begin and remain at 12% of superannuation contributions throughout their entire working life.

The 12% superannuation wage target was nominated in a speech I gave to the Australian Graduate School of Management at the University of New South Wales on 25 July 1991. This is the key policy speech in the development of both the superannuation guarantee, and with it, the 12% wage equivalent, overall target.

This level of contributions and compound earnings will guarantee personal super accumulations in excess of $3 million at retirement, reducing the call by the Age Pension on the Australian budget to 2% of GDP in the 2050s.

Currently, France spends 14% of its GDP on public pensions while Germany sits at 10%. The United States at 7%. Australia’s pension call on the budget is currently just 2.3% of GDP – a sunken level, thanks entirely to universal superannuation.

This development represented a revolution in national and personal savings — effectively privatising (letting people own their own retirement capital) the public pension system and with it, underwriting a large decline in the value of Australia’s net foreign liabilities — via Australian superannuation assets abroad.

Superannuation, like Medicare, is now an Australian community standard, binding the whole population as a national economic family, with each person having a place.

But this year, 2025, also importantly, is the 40th anniversary of national superannuation’s public founding as an economic and social policy.

On 5 September, 40 years ago, at the ACTU Congress at Paddington in Sydney, as Treasurer, I agreed to support an ACTU bid before the then Australian Conciliation and Arbitration Commission, for three percentage point of wages to be set aside as retirement savings to be paid into joint employee/employer industry funds.

The decision of the government to support an ACTU bid for an industrial award-based extension of wages paid as retirement savings rather than cash, arose from negotiations between me as Treasurer and Bill Kelty as secretary of the ACTU, over a month-long period preceding the Congress.

Bill was supported in this initiative by his president, the late Simon Crean, and key members of the ACTU Wages Committee, including Charlie Fitzgibbon from the Waterside Workers Federation and Laurie Carmichael from the metal unions.

The agreement to pay up to 3% of wages into superannuation accounts was challenged by employer groups who argued that superannuation could not be included in an industrial agreement. In May 1986, the High Court rejected this claim.

Superannuation assets currently stand at A$4.08 trillion, representing 150% of Australian GDP, the fourth largest retirement accumulation in the world. The Reserve Bank of Australia projects the national accumulation to reach A$8.0 Trillion, or 180% of GDP by 2035, making it, by then, the second largest retirement system in the world after the United States.