ASFA presses argument on economic value of super

One of Australia’s largest superannuation industry organisations has released new analysis reinforcing the value of superannuation to the Australian economy, including as a bulwark against adverse global events.

As the major parties roll out their Federal Election policies and as the US threatens the imposition of further tariffs, the Association of Superannuation Funds of Australia (ASFA) has pointed to how the superannuation regime is alleviating pressure on the age pension, operates as source of financial stability and will be a key to facilitating Australia’s energy transition.

Releasing the research, ASFA chief executive, Mary Delahunty said that in the context of the upcoming election, it had confirmed that the “superannuation system is easing the strain on the federal budget and helping household budgets”.

“The research showcases once again why Australia’s super system – built on the pillars of preservation, universality and compulsion – is the envy of the world,” she said.

The research nominated superannuation as a source of financial sector stability, noting that ‘historically, during periods of financial market turmoil, the super system has provided liquidity at critical times – such as during the Global Financial Crisis (GFC)”.

ASFA outlined the key points of the research as being:

Easing pressure on the federal budget: 

• Thanks to super, age pension costs are projected to fall from 2.3% to 2.0% of GDP over the next 40 years, compared to the OECD which is predicted to rise to 10% by 2060.
• Super helps people become less reliant on government support, increasing their economic independence in retirement, and reducing the tax burden on future generations.
• Super makes Australia’s retirement income system one of the most sustainable in the world, keeping government expenditure in check.

Long-term help with cost of living: 

• Super provides greater financial security for retirees, reducing reliance on family support and government services.
• Thanks to the principle of preservation, Australia’s superannuation savings are 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 continues to stabilise the economy and insulate it against international shocks by investing in local companies and supporting job creation and wage growth.

Boosting the economy: 

• Compulsory super has 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.
• Superannuation fuels domestic investment, with around 50% of superannuation assets allocated domestically, underpinning job creation and economic stability.