Subscribe to our newsletter

Super tax policy benefits economy, says ASFA

Super tax policy benefits economy, says ASFA

Taylee Lewis
— 1 minute read

Superannuation promotes Australia's economic stability and growth as well as providing investors with a diversified nest egg, says the Association of Superannuation Funds of Australia (ASFA).

In a recent report by the ASFA, the research group found that superannuation tax policy has had a positive impact on investment in Australia.

“The growing superannuation pool has contributed to Australia having a high savings rate, relative to the Organisation for Economic Co-operation and Development (OECD) average, which is reducing Australia's reliance on foreign capital, reducing both the risk and the cost of investment in Australia,” the report said.

Increased domestic savings reduces the reliance on foreign capital, which is a key risk to the security of the Australian financial system, said ASFA.

ASFA chief executive Pauline Vamos said: “The primary purpose of superannuation is to improve the retirement of Australians, however, compulsory superannuation has had a number of positive effects for individuals and the economy.

“While companies in other countries had difficulty finding funding during the GFC, superannuation funds provided an important source of capital for Australian companies refinancing during the GFC," she said.

Ms Vamos said these effects must be considered in the tax white paper process.

Despite criticism regarding the inequity of the current tax incentives applied to super, Ms Vamos reinforced that the current system and tax policy benefits the economy.

Ms Vamos said Australians are invested across a variety of asset classes.

"Over the past two decades, compulsory and voluntary superannuation savings have transformed the assets Australians hold. In 1990, Australians' savings consisted almost entirely of real estate and cash,” she said.

“Today, through their superannuation, Australians are investing in a diversified range of assets, including domestic and overseas equities, fixed interest, infrastructure and commercial property."

 

Super tax policy benefits economy, says ASFA
investordaily image
ID logo

related articles

promoted stories