6 February 2013
Nation’s savings are better held in superannuation
There is currently intense speculation as to the changes that the Government may make to superannuation taxation concessions in the upcoming Federal Budget. ASFA believes it is important that any changes to the system are measured against the core objective of superannuation, which is to provide dignity in retirement.
While ASFA believes it is important that Australians have certainty around the superannuation system, that doesn’t mean the system will never change. In fact ASFA is an advocate for sensible changes, with appropriate lead times, that would encourage Australians to take income stream products in retirement rather than lump sums.
ASFA’s research demonstrates that the vast majority of taxation concessions in superannuation go to Australians who are making decisions to sacrifice consumption today to save for the future. The system already contributes $12 billion to tax revenue, an amount that increases by about $1 billion each year. We do understand that at the very top end there are some Australians (relatively few in number) who have significant account balances (over $5 million). This is an area that does need to be debated in order to make the system fiscally sustainable in the long run. In this debate about superannuation taxation concessions however we do need to consider the broader role of superannuation in the nation’s economy.
ASFA research has clearly demonstrated superannuation contributes to the nation’s economic growth, including by supporting the development of companies listed on the ASX and the nation’s finance sector. Because superannuation investments are diversified and professionally managed, superannuation funds invest in the most productive assets in the Australian economy.
The impact of superannuation on economic development could be increased if impediments to investment in infrastructure, corporate bonds, small and medium cap ASX companies and venture capital are addressed. Addressing impediments, such as the lack of liquidity and secondary markets for infrastructure and venture capital, has the potential to ensure that superannuation contributes even more to driving forward Australia’s future economic development.
Superannuation is a tax-effective means to save for retirement, but in the current debate the contribution that superannuation makes to the national economy should not be forgotten.
For further inquiries, please contact:
Pauline Vamos, CEO, 0433 169 342
Megan McDougall, Media and Communications Co-ordinator, (02) 8079 0849
ASFA is the peak policy, research and advocacy body for Australia’s superannuation industry. It is a not-for-profit, sector-neutral, and non-party political national organisation whose aim is to advance effective retirement outcomes for members of funds through research, advocacy and the development of policy and industry best practice.