Super needed to help navigate out of economic crisis

“Do not let anti-retirement groups dismantle superannuation on ideological grounds which will shrink the economy”, the Association of Superannuation Funds of Australia has warned.

ASFA said super needed to be allowed to navigate the country out of the economic crisis brought on by the COVID-19 pandemic. Super, it said, underpinned the economy by investing heavily in productivity boosting assets.

ASFA deputy chief executive, Glen McCrea, said: “The challenge we face is that there are a range of self-interest groups who are obsessed with dismantling superannuation on ideological grounds, thereby shrinking the economy – despite the evidence that Australia’s retirement system is the envy of the modern world.

“We need to allow superannuation to help Australia out of this crisis; don’t let anti-retirement groups shrink people’s future and our fragile economy.”

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ASFA’s latest report found that $350 billion (or nearly 20% of total assets in Australian Prudential Regulation Authority (APRA)-regulated superannuation funds) was invested in unlisted assets, including infrastructure assets such as airports, roads and ports and energy assets such as the largest wind farm in the southern hemisphere.

It also found that super was investing in affordable housing across Australia for those key workers currently saving lives, such as nurses, police and emergency workers, and investing in hospitals, medical research and devices such as needle-free vaccines.

“As an investor, superannuation is in it for the long haul, not looking to make a quick buck at someone else’s expense,” McCrea said.

“The savings mobilised by superannuation funds facilitate a long-term approach to investing. Super funds provide ‘patient’ capital for assets classes that are critical to Australia’s long-term growth, economic productivity and higher living standards.

“In the absence of super’s long-term investment outlook, many essential assets may not offer a high enough rate of return to attract the required funding. Indeed, some projects might not go ahead at all.”