We could still be an Asian super power

Australia must learn the lessons of Sydney's failed bid to become an Asian financial centre. If it does, it could yet play a role in the financial administration of the burgeoning region.

Australia has missed the chance to be an Asian financial centre. It now has one last chance to become deeply involved in Asian finances – superannuation. But we will need to learn the lessons that flow from Sydney’s failure to achieve its goal to be a major Asian centre.

The Australian superannuation opportunity emerged graphically in the latest Melbourne Mercer Global Pension Index, which analyses the superannuation performance of countries around the world.

Australia ranked third after Denmark and the Netherlands. But the countries to our north – China, Korea, Japan and India – are right at the bottom of the table. China, Korea and, to some extent, India have traditionally relied on children to support the elderly. But with urbanisation that is breaking down. Some form of superannuation becomes a necessity. China in particular wants to develop a consumer economy but to do that there must be an assurance of retirement safety.

Mercer’s David Knox says that Australia can export its regulatory systems, its contribution practices and other aspects of the superannuation industry. We have also shown how you can allow individuals the chance to control their own destiny. Our self-managed fund movement is one of the great Australian superannuation strengths.

Unfortunately Australia set up one of the best financial product production and distribution systems in Asia but it was housed in the French-controlled AXA Asia Pacific company and the French bought our equity for a row of beans. Arguably allowing that crazy takeover was one of the biggest mistakes that Treasurer Wayne Swan has made.

But spilt milk crying gets us nowhere. We have to start again and we still have an enormous advantage.

But we must learn the lessons of Sydney’s failure. When Sydney made its run Hong Kong and Shanghai were not global centres and there was a clear opportunity window. Australia’s expertise was shared between two cities and instead of running in partnership with Melbourne, which houses Australia’s largest company and two big banks, Sydney went alone. It lost valuable time trying to get in front of the southern capital. In superannuation, arguably our expertise is spread between three cities – Melbourne, Brisbane and Sydney.

We need to operate as a country not as a city.