The government needs to contemplate the broad economic benefits of superannuation before changing tax concessions, according to Association of Superannuation Funds of Australia (ASFA).
ASFA have said that in the wake of the upcoming Federal Budget, any chances for taxation concessions for superannuation need to account for its role in domestic growth.
“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,” ASFA said in a statement.
“ASFA research has clearly demonstrated superannuation contributes to the nation’s economic growth, including supporting the development of companies listed on the Australian Securities Exchange (ASX) and the nation’s finance sector.”
ASFA said that because superannuation investments are typically diversified and managed professionally, the funds tend to invest in the most productive assets in the Australian economy.
In its previous research, ASFA found that the superannuation system contributes $12 billion in tax revenue to the domestic economy and that this figure increases by about $1 billion every year.
“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,” ASFA said.
“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 drive forward Australia’s future economic development.”
