Article by Carolyn Swanston, Superfunds magazine, No. 404, August 2015, pp. 30-33.
A master of many things, ASFA’s new independent Chair, Michael Easson, has set his sights on a new mission: to ensure the safekeeping of Australia’s retirement assets. CAROLYN SWANSON reports.
After two television appearances with the St George Police Boys Choir on The Don Lane Show, 13-year old Michael Easson dreamed of a singing career. His youthful ambitions were dashed when his voice broke, but helped him later stage the event Union with Mandela, drawing 100,000 people to the steps of the Sydney Opera House to welcome the anti-apartheid campaigner to Australia soon after his release from prison in October 1990. “As I waited to greet Mandela, I wondered if there would be a hint of bitterness or even revenge, but he was calm, a wise prophet who generated an amazing ability to inspire or shame others to do the right thing,” Easson recalls. “It is incredible what he achieved in South Africa; turning a potential bloodbath into a democratic society. He made people think that words, deeds and examples matter.”
The success of that event, and Nelson Mandela’s example, were pivotal to Easson’s burgeoning political career, but the seeds of political activism were sown in a middle class south Sydney lounge room, where he and his twin brother Shane soaked up the rhetoric from their Commonwealth Bank manager father Peter Easson, who never joined a political party, but made his Labor loyalties clear as he steered family discussion to politics, building train lines and a better place in the world.
Ironically, the careers advisor at Sydney Technical High, where the boys attended after their parents divorced, advised Easson to apply for an arts and law degree at the University of NSW (UNSW) as “we will soon have a train line from Hurstville to Kensington”. The twins are still waiting for that train to UNSW, where Easson started his degree, but switched to philosophy and political science “because I really wanted to understand how people thought” – and where his brother later completed a Masters of Business Administration.
Easson studied international politics under Professor Owen Harries who became an advisor to Andrew Peacock and edited Washington’s influential National Interest journal. Soon after, Easson was mentored by Bob Carr, Labor premier and foreign minister, and became the youngest ever secretary of the New South Wales (NSW) Labor Council at the age of 34. Leaving active politics in 1994, he instead launched his own business, Michael Easson Management, which flourished.
Respected across both sides of politics and in business for a steely grasp of policy and finance, Easson built up an enviable client list. Directorships included Macquarie [Industrial] Property Trust and Infrastructure Group, State Rail, Metro Transport Sydney, Sydney Roads Group, NSW State Superannuation Board, the Kaldor family businesses, ING Real Estate and NRMA Insurance, where his wife Mary, a former Victorian president of Young Labor and later the federal member for the inner-west Sydney seat of Lowe, subsequently became a director. An ANZ Stadium director since its Sydney 2000 Olympic Games opening, Easson was NSW Urban Taskforce’s inaugural chair, he also managed Radio Station 2KY for five years, is the honorary President of the Australia Defence Association think tank, and the chair of Canberra’s Icon Water.
A frequent newspaper columnist, he has just received his second PhD on Sydney urban transport. Easson already has a PhD in history, a master of science in urban studies from Oxford University and has completed programs in management and finance at Harvard and Stanford universities.
His inspiration often flows from a well-stocked home library in Sydney’s Strathfield, where he and Mary settled 24 years ago. Pride of place in this Easson think-tank is a personalized Dadopoly game created for Easson’s 60th birthday by the couple’s two children, Louise, who followed her father into politics, and Amanda, a graphic designer. His representation on the Dadopoly board highlights an extraordinary life.
Easson met Mary during a Young Labor Conference debriefing at Sydney’s Trade Union Pub in Sussex Street, but their romance did not begin until he was studying in the United States and started writing to her. His penmanship soon convinced Mary to wage “her biggest political campaign”, to win Easson over as her husband. Bob and Helena Carr attended the couple’s wedding in 1984 and Easson eventually came to accept: “if there was to be one pollie in the family it should be Mary; she is so warm and lights up the room.
“My leaving politics was probably the right outcome,” he reconciles, “because if I had got in I would have been languishing in opposition for a long time… Instead, I enjoyed working in business with some really good people. Politics is an idealistic profession and does attract good people, but others are merely time servers and mindless tacticians, not the strategists they need to be.”
In 1999, Easson co-founded the property investment and development company EG, which now manages investments of $1.15 billion in property assets and is actively developing another $1 billion in property projects around Australia. Committed to investing in and developing property along urban transport corridors, the firm has branched out to form global partnerships with Japan’s biggest house builder Daiwa, and China’s Fosun.
ASFA’s broad industry representation has attracted Easson to its chair, where he hopes to “learn from the best in the business… ASFA is a unique, representative policy body that protects the savings of all Australians. Its biggest challenge is to strengthen its advocacy against endless changes undermining the industry and its tax status.”
The global financial crisis (GFC) has been Easson’s biggest challenge: “To have survived and come out well proves your mettle, but it was a tough period and anyone who pretends otherwise is kidding themselves. The GFC was a great learning experience, but that is dissipating, despite new clouds on the horizon. I have a saying at EG, that all property people are optimists, and so we have to be disciplined to curb over-optimism. I have learnt to think hard about what can go wrong; certainly complacency is the enemy of good thinking. Every board I believe needs people to look at unintended consequences, the risks, and the downside.”
Easson launched Asset Super in 1989 because he thought trade unions needed “to get cracking on super”. Twenty-five years on, he chairs an association that represents industry, corporate, public sector and retail funds and a financial services industry managing a $2.05 trillion industry that is larger than the nation’s gross domestic product. His mission: to ensure the trillions can fund retirement for 24 million Australians, most of whom are likely to live into their 90s. Watch this space.
Prior to publication the interviewer, Carolyn Swanson, asked in writing a series of questions which I answered:
1. As a child you dreamed of becoming what, and your first job was what?
Like many kids I had various impractical dreams: a fireman – putting out fires in the National Park. I seriously, briefly, contemplated being a priest, but I thought that a terribly lonely, noble existence. A thoughts of a singing career, after a couple of performances on the Don Lane Show on Channel 9 with the St George Police Band Choir (“Climb Every Mountain” was the highlight), were dashed when my voice broke. 😊
My first job – at school – was working for Daniel Chen’s apparel business in Kent Street.
Through the University holidays I loaded and unloaded trucks at Ansett Freight Express at Mascot.
2. You have grown up to become a “businessman and [influential] company director in property development and trusts, funds management, energy, infrastructure investing generally, superannuation and private equity” with a Masters in Sustainable Development, one PhD in history and another to come (this year?) in transport and urban planning? Is this an adequate description of your current multiple roles/skills and how does it align with your childhood aspirations?
Yes. The summary works. Mostly I focus on strategic planning in everything I do.
I guess it is a very diversified background. I have concentrated in the last 15 years on property funds management and infrastructure. Wealth creation – and protecting value – are the core themes.
The second Ph.D. in transport planning is due to be finished and awarded this year.
3. How easily have you gained expertise in so many diverse areas and was politics a help or a hindrance or both?
Anyone who thinks it is a cinch to do vastly different things is kidding themselves. Learn from others, be patient, do your homework, seek mentoring and coaching advice, don’t be afraid to ask “dumb questions”, swot through, are key. In going into business I felt I needed to strengthen areas of weakness. That’s why I did the Finance Management Program at Stanford in 1997. I think I was the only non-CFO there.
4. Did a quasi-political background help?
My background was a help in that people knew whom I was and tended to trust me.
5. Congratulations on your Member of the Order of Australia (AM) awarded in 1998 – what was this in recognition of?
Contribution to the trade union movement and various businesses and not for profits.
I spent 17 years with the Labor Council of NSW (now called Unions NSW) and I was briefly a Vice President of the ACTU.
6. Why did you decide to study political science and join the NSW Labor Council in 1978, becoming its youngest secretary at age 34, then join of the Australian Council of Trade Unions and become senior vice president of the NSW branch of the ALP IN 1993, and then resign from politics?
At school in my senior years I concentrated on Math and Science. But at university I wanted to broaden my horizons and I specialised in Philosophy (got me to understand & empathise with how other people think) and Politics. My final year thesis covered the logic of scientific discovery and how progress in scientific understanding differs from political thinking.
7. How might a seat in the Australian Senate have changed your life and that of Australians?
I fear I might have languished in Opposition from 1994 onwards (Labor was out of office from 1996 to 2007). If I had of gone in I hope I might have been helpful in policy debates. My ambition 22 years ago was to be Minister for Education. I deeply admired Kim Beazley senior, the Minister for Education in the Whitlam government.
8. Do you have any objections to being called a “Labor heavyweight”, as you are often described – if so, how would you better describe your influence in the Labor party and government of the day now and during the 90s?
I hate that phrase because it is misleading. I respect people from all political viewpoints, and I have always tried to look for common cause, and I have never been a “machine man” – or heavied anyone.
9. Why in 1989 did you co-found both Asset Super (since 2012 part of CARE Super) & Chifley Financial Services?
I thought the union movement needed to diversify or die.
Back then it was controversial to concentrate on non-wages issues, even superannuation. I tried to persuade the leadership of the Labor Council in the mid-1980s to get into superannuation, but I was told workers wanted increases in wages “in the here and now.” By the time I became secretary (head) of the Labor Council in 1989 the Labor Council had been slow to understand the world of financial services. Surprisingly, the Employers’ Federation of NSW under Garry Brack’s leadership were diehard opponents of industry superannuation and held-up the formation of Asset Super (with the Labor Council, NSW Chamber of Manufactures and the Employers’ Federation, the initial sponsors). Asset Super was limited to be a default superannuation fund in NSW awards.
Chifley Financial services, on the other hand, was formed in 1990 to give clear, competitive advice to union retirees and those close to retirement.
10. Was it a highlight of your career to welcome Nelson Mandela to the steps of Sydney Opera House in 199o? Did you play a role in bringing Mr Mandela to NSW and how did his visit influence your own and Australian attitudes to migration and racial discrimination?
Yes. Organising and speaking at the “In Union with Mandela” rally, in front of a 100,000 people at the Opera House in October 1990 was one of the highlights of my life. To be honest, before I met him I wondered if there might have been a trace of bitterness and revenge-seeking in Mandela. But when I greeted him at the Opera House he seemed a wise prophet, the most amazing and calm man of great dignity and potency. Not since Gandhi and Dr. Martin Luther King have we seen such a personality able to achieve massive change through peaceful means. Words and example matter.
11. How has your political career shaped your business career, or vice versa?
I respect anyone who cares for Australia, whatever their politics. That outlook I’ve carried into my business career.
I think politicians – and would be politicians – face huge tasks understanding business. They are literally worlds’ apart.
12. Is Sydney ever likely to get a private fast train to Parramatta and what impact would such a development have on Sydney?
My Ph.D. on transport planning at the University of Melbourne focuses on why mega urban planning projects so often fail. I think Sydney needs a fast train to the west, a metro, because it will stimulate a lot of employment and density along the route. The O’Farrell/Baird governments, to their credit, are getting on with some major projects. The previous government had too many start-stop failures. I hope a fast rail service to Penrith, including Parramatta & the Olympic precinct, to the city will re-emerge in Sydney’s transport planning. Good ideas have a habit of never dying.
13. How important is it for a government to engage in public/private partnerships and is it reasonable for investors and developers to lobby government take on public/private partnerships to the benefit of both parties?
Very important. But care needs to be taken in the planning process, to minimise mistakes. I am an advocate of true and full transparency, particularly in project performance. There’s a role for Infrastructure Australia here. If we do not have consistent, credible, transparent information we will keep making mistakes and fail to learn from them.
14. What do you see as your greatest career/business/academic successes?
In business, I am glad I found a good partners who are driven, ethical, and creative. Through them a great culture has emerged at EG and I find I am learning every day.
Academically, I found doing the MSc in Sustainable Urban Development at Oxford very hard. I ended up passing with Distinction, but it was a tough learning experience. The course forced me to get out of my comfort zone, think about smart technology, urban design and why great urban outcomes can be achieved and sustained.
15. What have been your greatest career/business disappointments?
At first getting blocked by Head Office of the NSW ALP in 1994 for the Senate was a disappointment. But, in retrospect, it allowed me to pursue interests in business, which I love.
16. What have been your greatest challenges in business and politics?
In the unions it was dealing with the aftermath of the Cold War and, in my small corner, trying to overcome mindless faction bastardy.
In business, it was the GFC. The world stopped for fund raising in value-add property. We’ve proven the EG model since. The aftermath of the GFC was a reason I took up the opportunity to do further study. You should never stop learning.
17. Congratulations on your appointment to the ASFA Board. How do you hope to contribute most to the superannuation industry through this position?
I hope I can work well with the Board and Pauline [Vamos] in ensuring ASFA listens to our members and articulates the case for decent pension and savings policies for all Australians.
I’ve written a few articles for Superfunds journal before – in 1986 on superannuation funds investing overseas and another in 2009 on fees and investments in property.
When I first became a superannuation fund director, in 1985 on the then NSW Public Authorities Superannuation Scheme Board, I saw ASFA as a great forum for learning and pooling ideas.
18. What do you see as the greatest challenges facing the Australian superannuation industry?
That government sees all that money and wants to tax it.
Ensuring adequacy of retirement savings is a huge task, especially as we are all living longer.
The three pillars policy will come under pressure. ASFA’s role is to articulate a respected, powerful case. Endless changes in policy, uncertainty generally, is undermining to public confidence in the industry.
19. What inspired you to form of the EG Group with Adam and Shane Geha in 1999 and has the firm performed well above your initial expectations? Please confirm whether it is the funds management division formed in 2002 that has approximately AUD1.25billion in assets under management, or whether that is the size of the whole group.
I knew Adam Geha at Macquarie Bank and in 1998 we co-wrote a paper on business migration reforms which was submitted to the federal government. We advocated that business migrants should invest in infrastructure, private equity and property in exchange for a Visa. That’s close to the model ultimate adopted many years later.
From there we formed a business, at first with Shane Geha, a civil engineer and more recently a Ph.D. in urban planning.
As I was thinking of going into business with the Geha brothers, out of the blue David Gonski gave me a call and from that our first client came – a friend of David’s. I joke to him that he was a co-founder of EG.
20. How do you explain the rapid growth and success of the EG Group?
Success has been slow but steady. Let me mention two things EG is known in the market for – alignment & risk management.
On alignment, it is amazing the fees and charges some people get away with. EG believes in cost recovery on mandates plus incentives. We invest in a first lost position. We believe all fees should be disclosed. We do not believe in debt fees, buy fees, sell fees or any other fees to the manager. We think only one management fee should be charged.
On risk, EG has developed its proprietal risk management system, PRISMS, that forces us to think hard about all the risks associated with buying, holding and selling property.
21. Congratulations on your 19 years as director, deputy chair and now chairmanship of the ACTEW Water Corporation. What have been your greatest contributions in this role?
I am chair of what is now called (since this year) Icon Water and chair of ActewAGL, the energy business, both operating in the Canberra region.
With Icon, getting a major dam built (opened in 2013) with an excellent OH&S record, without catastrophic injury or death is something to be grateful to all the workers involved in the project.
Helping form a partnership with the private sector, in forming a 50/50 JV with AGL, the ActewAGL partnership, is a unique PPP in Australia. The government received an ‘equalisation payment’ of $400m and its dividend payments are at or higher than when it owned 100% of the energy assets.
22. Congratulations also on your 19 years as an executive director at the ANZ Stadium. What has been your role in its privatization and do you see this development as a model of private/public partnerships?
I joined the Stadium Board before it was built and I have been privileged to experience and witness the thrills and spills of Stadium events – including that painful, winning drop goal by Johnny Wilkinson in the 2003 Rugby World Cup.
23. On a more personal side… Can you describe some of your greatest personal achievements and explain the circumstances of you twice winning the David Griffin Prize and Sydney Morning Herald Prize – for what exactly?
I won the academic prizes one year for a paper I wrote on Dr Jim Cairns and his viewpoints on foreign policy, and in my final year on aspects of the philosopher Karl Popper’s political philosophy.
24. Can you identify the major defining moments/turning points in your life and how these have impacted on your wide-ranging success and influence?
Having mentors and people with whom you could confidentially share insights were incredibly important. I found at university Owen Harries and Donald Horne were very helpful, Barrie Unsworth and Nick Greiner – two former Premiers from different sides of politics – very important in understanding politics. Tony Berg, John Caldon, Elizabeth Bryan, and Jim Service highly important mentoring influences in different ways in business.
25. What are your interests/passions outside of work?
I am a big book collector – ranging from business, urban planning, architecture, history, literature and philosophy. But I do not have the time to read as much as I would like. Movies and music (jazz, lieder songs, and classics, mainly) are great passions. Travelling with Mary. Great holidays with the kids every year when they were younger was a must. They still want to holiday with us. 😊
26. Please confirm you attended (Penshurst’s Marist College 1967-90 and Sydney Technical High School 1970-72), won a Commonwealth Scholarship to attend the University of NSW, later attending Harvard, Stanford and Oxford universities. How has this strong academic background influenced your career choices and successes?
Yes. That’s where I was educated.
Learning and not being afraid to take on new challenges has been something that characterises me. I guess I am just curious. 😊
27. Where did you grow up, where is your home today and how important is the environment in which you live?
I was one of four kids (two girls and two boys) and we grew up in Peakhurst, Penshurst, Mortdale, & Hurstville – the St George district of Sydney.
After living in the same house for 23 years Mary and I moved a few streets away in a new house – with a library – in Strathfield in Sydney.
I like catching a train, walking to the rail station. For me, it is far more relaxing than driving.
When we married in 1984 Mary and I understood our lives would be fraught with political demands. We are a great team; she still laughs at my jokes after all these years. Humour and not being stubborn are the keys to a good relationship.
Mary lights up a room, she is an incredibly warm and inspirational person. I realised that if there were to be one politician in the family it should be Mary.
Our kids have been the joy of our lives. One daughter is married and the other is engaged.
I have learnt a lot from Mary – including concerning superannuation. Indeed, Mary has recently written a thesis on ‘Present at the Creation. The Origin and Development of the Modern Australian System of Superannuation’ – which should turn into a book this year.
28. Who are your heroes?
Robert F. Kennedy, George Orwell (he wrote so clearly), Nelson Mandela and, in Australia, Bob Hawke. He and Keating changed Australia for the better.