Australian households now have $500 billion in savings thanks to the introduction of compulsory superannuation, of which $35 billion is from workers in the bottom 20% by income, according to the Association of Superannuation Funds of Australia (ASFA).
ASFA’s latest research on the benefits of the super system found the system delivered tangible benefits to households across the income spectrum and for many it was the primary means to participate in the country’s economic success through asset ownership and diversification.
ASFA chief executive, Dr Martin Fahy said: “The strength of Australia’s superannuation system is evident from the important role super is playing to help provide both short term financial relief to people hardest hit by the COVID-19 crisis and investment capital critical to the economic recovery.
“Australians value a fair go for all and we don’t leave people behind. The research shows that superannuation shares the benefits of long-term wealth accumulation across our society and gives everyone the opportunity to retire with dignity.
“The current crisis has highlighted the immeasurable contribution of front-line workers within our community. Through compulsory superannuation, all Australians share in the prosperity that is built on the backbone of their hard work and sacrifice. This must never be the preserve of the wealthy elite.”
ASFA noted the legislated increase in the superannuation guarantee (SG) rate to 12% would see half of all Australians achieve a self-funded retirement by 2050.
The research also found that super had unambiguously improved the asset diversification of Australian households’ balance sheets, particularly for low income earners, helped make wealth inequality in Australia among the lowest in the world, and improved the sustainability of the Age Pension and took pressure off future federal government budgets.