At a time when the Australian Government is joining business in trying to make productivity a key focus of the economic narrative, the $4.1 trillion superannuation industry is claiming a key role in helping make the economy more efficient.
The industry is more than a retirement savings vehicle and has lifted the level of productivity and gross domestic product (GDP) by about 2%, according to a new report.
The system was a strategic enabler of modern productivity by providing long-term capital for infrastructure, technology, and enterprise, and supporting the renewal of the economy, the Association of Superannuation Funds of Australia (ASFA) said.
“As a result of impact on Australia’s capital stock, ASFA estimates that the level of GDP today is around 2% higher than it otherwise would have been (in the absence of the superannuation system), with a similar impact on the level of (labour) productivity,” ASFA said in The Impact and Opportunity of Superannuation on Australia’s Productivity.
Based on Australia’s annual GDP of $2.6 trillion, this equates to A$56 billion (US$26.8 billion) per year.
“ASFA estimates that for a worker on average full-time wages today, the boost to productivity is equivalent to around $2,500 per year,” it said.
The paper explores the role of super in building Australia’s productivity and raising living standards, future opportunities for harnessing it further, and recommendations to achieve this.
ASFA, a peak body for industry, the public sector, retail and corporate super funds, conducted research ahead of the Government’s Economic Reform Roundtable focused on productivity growth to be held from 19-21 August.
Super funds contribute to productivity by funding new fixed capital investment which leads to more efficient production/provision of goods and services, new or higher-quality goods and services, more efficient movement of goods, services and people, and more efficient facilitation of economic activity.
Funds invest $40 billion in new capital each quarter in national infrastructure, housing, and the energy transition and achieve ‘solid’ returns that averaged 8.1% in the five years to March 2025, according to ASFA.
