ASFA Statement on Financial System Inquiry

The Association of Superannuation Funds of Australia (ASFA) welcomes the release of draft Terms of Reference for the Financial System Inquiry.

“The Financial System Inquiry will provide the opportunity for the superannuation industry to demonstrate how superannuation capital contributes to the Australian economy,” said ASFA CEO Pauline Vamos.

ASFA will provide an in-depth, evidence-based submission to the Financial Systems Inquiry. ASFA has a significant research resource base to draw from and will be working with experts from across the superannuation industry to contribute to the Inquiry.

Over the last few years, ASFA has researched the links between Australia’s growing pool of superannuation capital and the Australian economy.

Research commissioned by ASFA has concluded that:

• superannuation capital already helps to finance Australia’s long-term economic growth
• superannuation capital seeks profitable investments. If superannuation funds are asked to help meet economic objectives, it should not be in a manner detrimental to returns on fund members’ retirement savings
• superannuation has the flexibility to meet the future expectations of retirees
• the superannuation system should not compromise the stability of the financial system, even as the pool of funds grow
• the evidence indicates that superannuation funds actually have strengthened the financial system, providing substantial financing both directly to businesses and indirectly through other financial institutions
• Australia weathered the GFC comparatively well, in part due to the stabilising role played by superannuation fund investments.

Background

• ASFA commissioned Deloitte Access Economics to produce the report Maximising Superannuation Capital in June 2013. A copy of this report can be downloaded from the ASFA website.
• ASFA has participated in the Australian Centre for Financial Studies research project ‘Funding Australia’s Future’.
• In 2009 and 2011 ASFA commissioned The Allen Consulting Group to produce reports examining the linkage between superannuation and the economic growth. The reports are available on the ASFA website via these links:
  • Better living standards and a stronger economy: the role of superannuation in Australia – September 2009
  • Enhancing financial stability and economic growth: the contribution of superannuation – June 2011.

For further information, please contact:

Lisa Chikarovski, Media Manager, 0451 949 300.

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