A new study shows compulsory superannuation is significantly increasing Australia’s savings pool, thereby lowering dependence of foreign investment and boosting local investment.
The finding comes as part of a research report from the Financial Services Council, entitled Superannuation asset allocation and growth projections.
According to FSC chief executive John Brodgen, the study provides significant insight into the impact of superannuation on the Australian economy.
“Critically, it confirms that Australia’s compulsory superannuation system is making a major contribution to real savings for Australians,” Brodgen said.
“This means in the longer term we will see a lower reliance on foreign capital and higher levels of domestic ownership. Less reliance on foreign investment inflows will also increase the resilience of our economy. In a time of crisis, this is crucial.”
The report, conducted by Professor Rodney Maddock from Monash University, also shows that as Australia’s superannuation pool grows, so too does demand for domestic non-listed equities.
“This demand is likely to drive the supply of securitised assets thereby providing alternative funding for mortgages,” Brodgen said.