Australia's compulsory superannuation reduces the cost of the Age Pension on the Budget and has contributed to economic stability and growth, according to the Association of Superannuation Funds of Australia (ASFA).
A report by ASFA has found the increase in the Superannuation Guarantee (SG) from nine to 12 per cent indicates the cost of tax concessions associated with such an increase stabilises relatively soon, and the benefit in reduced pensions continues to grow.
"As a result, there is a positive overall impact on the Budget flowing from an increase in the SG as the system matures given that the Age Pension expenditure savings gradually offset the cost of the tax concessions," the report said.
The report noted that Australia is above the Organisation for Economic Co-operation and Development (OECD) average for savings and in turn is reducing Australia's reliance on foreign capital, reducing both the risk and the cost of investment in Australia.
The proposed reforms have been described as a key step towards delivering better products and retirement experiences for members, with many noting financial advice remains the “urgent missing piece” of the puzzle.
Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.