Australia’s compulsory superannuation system is delivering relief to both the federal and household budgets and insulating retirees and the country against economic instability. 

This paper explores the role that Australia’s superannuation system plays in supporting Australia’s economic growth, facilitating investment in infrastructure and Australia’s energy transition, and supporting financial sector stability. 

Super has boosted household savings by more than $500 billion, is reducing the government’s reliance on age pension payments, and provides a stable pool of capital for local investment, job creation and infrastructure – supporting economic growth and lowering the cost of living over the long term. 

Key findings

• Total investments of the regulated super system stand at $2.7 trillion – more than doubling over the past decade.
• The super system – and the compulsory system in particular – continues to play a key role in supporting Australia’s long-term economic growth.
• Since its inception, the compulsory system has caused the household sector to save a higher proportion of its income than otherwise would be the case – around $500 billion – which will support future retirement outcomes.
• This has boosted Australia’s national saving, facilitated higher levels of real investment in the Australian economy, supported higher levels of GDP.
• Over the next few decades, the super system will be a key source of funding for Australia’s energy transition. This will require a significant uplift in capital investment in the Australian economy – which underscores the ongoing importance of super in supporting national saving.
• The long-term nature of super investments means that the super system is a source of stability in domestic financial markets, including during periods when asset prices fall.
• The super system improves the sustainability of the Age Pension and takes pressure off future federal budgets.