Australia's unique superannuation system has boosted the national economy in a variety of expected – and perhaps unexpected – since its introduction, according to a new report by the McKell Institute.
The report, Economic Benefits of Universal Superannuation takes a wide view to examine the economic impacts of Australia's superannuation system. The report makes a range of findings including:
- Increasing the super guarantee will have a positive effect on the federal budget in the long-term
- Superannuation funds reduce Australia's reliance on foreign sources of finance
- Superannuation increases capital's focus on long-term sustainable returns
- Superannuation offsets ageing population effects on economic growth
- Superannuation reduces exposure to financial shocks by diversifying Australian household assets.
The McKell Institute's chair, Dr Craig Emerson, said the report was particularly timely given the federal government's current Retirement Income Review.
"The government's Retirement Income Review should make a strong effort to understand the wider economic benefits of superannuation," Dr Emerson said.
"Australia is considered to have among the world's best retirement incomes system, comprising compulsory superannuation, voluntary private savings and the age pension.
"This report is a reminder of the macroeconomic benefits of compulsory superannuation reducing Australia's reliance on overseas savings to fund investment opportunities."
The McKell Institute Victoria's executive director, James Pawluk, said the report was opportunity to correct common misunderstandings about the economic impact of superannuation.
"A good example of this is how we currently overlook the positive fiscal effect the super guarantee has on the federal budget over the longer term," Mr Pawluk said.
"Our new modelling shows that when you get your starting assumptions better reflect the real world, what you find is that a higher super guarantee helps strengthen the federal budget.
"Australians understand that our superannuation system has had a positive effect on millions of individual lives. What this research shows is that it has had an overwhelmingly positive effect on the national economy as well."