The Association of Super Funds of Australia says its research has found that compulsory super is insulating retirees and the country against economic instability and has boosted household savings by more than $500 billion.
Additionally, the research revealed that super savings were also reducing the government’s reliance on aged pension payments, and provided a stable pool of capital for local investment, job creation and infrastructure – supporting economic growth and lowering the cost of living over the long term.
Mary Delahunty, chief executive of ASFA, said the research showcased “once again why Australia’s super system – built on the pillars of preservation, universality and compulsion – is the envy of the world”.
The research’s key findings included that, because of compulsory superannuation, aged pension costs were projected to fall from 2.3 per cent to 2.0 per cent of GDP over the next 40 years, compared with the OECD, which was predicted to rise to 10 per cent by 2060.
It also said that super helped people become less reliant on government support, increasing their economic independence in retirement and reducing the tax burden on future generations.
Regarding long-term help with cost of living, the research found that super provided greater financial security for retirees, reducing reliance on family support and government services.
Furthermore, thanks to the principle of preservation, Australia’s superannuation savings were invested in Australian infrastructure and energy projects, helping to boost productivity and lower long-term costs for households and businesses.
Super’s long-term capital continued to stabilise the economy and insulate it against international shocks by investing in local companies and supporting job creation and wage growth.
Finally, the research also said compulsory super had added $500 billion in household savings, helping Australians in retirement and creating a stable, long-term investment pool that supports Australia’s productivity and prosperity.
