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Hello everyone and welcome to this special bonus episode on the Rask Network. When I started the Rask business in 2017, I started out with a pretty simple mission of helping people get access to education and information that allowed them to live their financial life on their own terms. Thanks to your support and the community's growth, we've been able to attract so many good guests to our network. We've seen, whether it's today's episode with the former RBA Governor, bank CEOs, investors, retirees, founders, listener stories, literally everything has been on display across the Rask Network as we've grown to over 250,000 Australians that either tune in regularly or read our stuff.
One of the things that's apparent in the finance industry is you often come across Hollywood movies that portray the finance industry as pretty bad. In most movies, it's often the man with the money that is the evil person, and so people tend to think money is the root of all evil, and we have these connotations with accumulating wealth. Over time, however, I've come to realize that getting wealth and growing wealth enables you to help other people, and enables you to spread your knowledge, your education, and to provide resources for people who may go without. That's this whole idea of conscious capitalism and then responsible investing as well.
We're seeing this movement across the board. In today's special episode, which is a short one with former RBA Governor Philip Lowe and Future Generation Australia CEO Caroline Gurney, you're going to get an example of how money can be invested in a way that's dual-purpose. Future Generation Australia is two listed investment companies at the moment that enable you to invest in either global shares or Aussie shares via a listed investment company, and everyone works for free. In the case of Rask, we provide pro bono services to Future Generation as part of our commitment to trying to move this mission forward.
You'll hear Caroline talk about things like a dual purpose in the way that they operate, meaning they get good returns for investors while also giving away 1% of the assets of the listed investment companies to charities every year. So we are proud to support Future Generation and proud to do our small part in helping grow awareness for this idea that you can use money in a way that supports other people, not just yourself, your immediate family, and your friends, but also the broader communities around you and beyond. So I hope you enjoyed this episode with former RBA Governor Philip Lowe, now Chair of Future Generation Australia, and CEO Caroline Gurney.
Caroline, welcome back to the podcast.
Thank you so much for having us.
And Phil, first time on the show.
It's great to be here. Thank you.
Caroline, I'd like to start with you. Last time we spoke, we talked about the dual purpose that Future Generation has and the impact it can have while investing for the long term. For anyone that's tuning in for the first time, just hearing about Future Generation, can you give us the bird's-eye view and kind of what we mean by dual purpose?
Going back to the beginning, Geoff Wilson is our founder for Future Generation, and he read an article in the Financial Times. It talked about how a fund manager had basically brought together a lot of shareholders and raised a lot of money from shareholders to give basically to cancer. All of the fund managers worked pro bono, so no management fees, etc. He said, "Okay, how can I do that in Australia?" So he came back to Sydney and he spoke to David Paradice, Peter Cooper, all these sort of fantastic boutique fund managers, and said, "Can we all work for free so we can actually give shareholders a return, but also give money to not-for-profits?" So it's very much that model of making a social impact, but also having a financial return.
I think the thing that really resonates with our community when it comes to Future Generation is the listed investment company structure provides meaningful tax benefits for them, particularly if they're higher income-earning type individuals, but also the kind of consistent income that that produces, and the ability for them to feel like they're part of something. Via capitalism, they're able to grow their wealth while also giving back, and almost in a way outsource the responsibility of the impact side of things, which for some people is a wonderful blessing that we have when we have money to do that. But to be able to do that at scale is really important.
So that's actually why we're catching up here in Melbourne today. I would love for you to share an example of some of that impact, something that's maybe stood out to you recently with respect to what—because you're the CEO, right? You can hear these stories, you can speak to people, you interface with investors and the impact and charitable side. So I'm curious to maybe draw out one of those examples for listeners.
That's really interesting. I speak to shareholders all the time and I love hearing their stories in terms of why they decided to invest even in the markets originally, and why they invest in Future Generation. But obviously, we've given $85 million by the end of this year to not-for-profits in Australia, and that's focused on youth at risk and also prevention of youth mental health for young people. And yes, you do hear stories. I mean, I'm often on the stage with one of our fund managers, but also with one of our not-for-profits.
We recently have measured the impact that we've had with those not-for-profits through Future Generation Global, and we have reached 5.3 million young people through the organizations, the 14 that we support. We've written it all up, and it's the very first time an organization has actually measured that collective impact, so it's really powerful. Some of the stories in there, I read them and it just makes me realize how worthwhile everything we do is, because realistically we all need money to survive, so you want to make sure shareholders are taken care of, you want to make sure they've got a really good yield, but you really want to help young Australians.
One story, because I was actually on the stage with him in Sydney recently, is a young man called Sienna. He is now an ambassador for ReachOut, but he had attention disorders and he basically felt not worthy. He actually didn't know how to reach out to get help; he was really suffering. People say, "Oh yeah, you've got that, but I have that." He goes, "Actually, I have it day in, day out, and I want to go to university, and I want to do well, but I just can't deal with everything that's impacting me all the time." He went to ReachOut, which is obviously a mental health platform, and he got access to people that could help him, and he got information. Now he speaks at our roadshows, he's at university, and he is an incredible person who has found his strength.
I think things like that really bring home what we're actually doing, because young people are really strong, you just want to make sure they've got the tools to help them.
I love this idea of conscious capitalism, being aware and sustainable investing in multiple aspects. We seem, at least from my perspective, we see more companies nowadays drifting further towards that: How do we have this social license to print money? How do we give back to our employees, to the other stakeholders, to the community while we build this great business? And there are those win-win-win scenarios, and it's definitely on display with Future.
Phil, I'd like to talk a little bit about you and your career at the RBA for 40 years. I've got the numbers here in front of me: 1980 to 2023. Folks will know you rose to the top as Governor. I want to go back in time if we can, to that moment where you started your career. I know you did a PhD, so maybe that's in the mix there somewhere. But did you ever think that one day you would rise to Governor of the RBA?
No, I did not think that that was in my future. But it was a huge privilege to reach that position. I grew up in Wagga in regional New South Wales, and Wagga is known more for its sports people than for its economists. But at high school I studied economics, and as a young person, I was really taken by the idea that somehow the invisible hand of the market, combined with sensible government intervention, could lead to the maximization of the welfare of the society in which we live. As a young person, I found that kind of incredible, uplifting, and it sparked my interest in economics.
Then I went to university and worked at the Reserve Bank. It was a huge privilege to find myself at the end of my career as Governor of the bank for seven years. The RBA, by legislation, is required to maximize the economic welfare of the Australian people: low inflation, full employment, and the third objective of the Reserve Bank under the current Act is to maximize the welfare of the Australian people. So that was a really strong connection back to what I was learning when I was 17 and 18.
It was a huge privilege to lead 1,500 people—really dedicated, smart people who came together to try and maximize the welfare of the Australian people. There are periods that were very tough. The media would describe me as the most unpopular person in the country, but I took great heart during that period because I knew what we were doing was doing our best to make the society and the economy as good as it could be and to maximize the welfare.
Now in my current role at Future Generation Australia, I feel like I'm continuing that in a different way—not generating low inflation and full employment, but really addressing disadvantage for kids. All the research is that if you have a major setback before say the age of 10—say homelessness, or domestic violence, or some health issues, or bad education outcomes—if you have a setback before the age of 10, that leaves a shadow on you or a high probability of a shadow on you for the rest of your life. That's fundamentally unfair, isn't it? Something happens you have no control over, and you carry the shadow or the burden or the scar of that for the rest of your life.
So the charities that we're supporting help kids who have that adverse effect early in their life. If we can do that, then I think I can help the welfare of the society through a different way. So everything comes back to doing what we can to make the world a better place.
