Superannuation assets for the year ending June 1997 have surged past the $300 billion mark, reaching a total of $304 billion. The year ending June 1997 has been an extremely strong year for the superannuation sector. Superannuation assets grew by nearly $1 billion a week during the income year.
The strong share market performance helped drive the growth in assets, however, contributions also grew strongly rising 12 per cent compared to last year (from $26.3 to $29.5 billion), with an increase in new contributions from members of 17 per cent.
There has been a lot of misguided rhetoric about Government policies undermining public confidence in superannuation.
On 12 May 1997, Senator Sherry made the extraordinary statement that, Every action they have taken, every law they have attempted to enact in respect of superannuation since they came into government, has had the effect of wrecking superannuation, wrecking confidence and wrecking the final payout from workers superannuation.
Senator Sherry has been proven wrong on all counts. His scaremongering simply cannot stand up in the face of the substantial growth we have witnessed in 1996-97. The bare facts are that super assets are up; member and employer contributions are up; and net contributions are up. The figures will be contained in the quarterly Insurance and Superannuation Commission Bulletin, to be released in early October. Other important results are set out in the Attachment.
When the fact of this strong growth is combined with Government policies to introduce fairness, and increase competition and control, the prospects for Australian superannuation fund members look very bright.
CANBERRA
29 September 1997
Contact Officers
Alex Dunnin: Insurance and Superannuation Commission (02) 6213 5381
Richard King: Assistant Treasurers Office 0419 683 586
Attachment
Superannuation results for June 1997:
- Total superannuation assets had reached $304 billion by end June 1997, representing growth of 7.9% during the quarter, or 20% during 1996-97.
- The increase of $51 billion in superannuation assets during 1996-97 translates into superannuation growth of nearly $1 billion per week.
- This is the highest annual growth rate in 9 years, indicating that the superannuation industry has had an extremely positive year.
- Strong capital market performance during the June quarter caused net earnings to be the main component of growth, accounting for 79% of the increase. Net deposits accounted for the remaining 21% of the increase.
- Contributions this financial year were up 12% compared to last year, increasing from $26.3 billion to $29.5 billion.
- The strongest growth came from member contributions, increasing by 17% over the previous year to $10 billion. Employer contributions increased by 10% to $19.5 billion.
- The number of superannuation accounts increased 1.6% (up 257 000) during the quarter to 16.8 million (these accounts are owned by roughly 6.8 million members).
- Each member therefore has on average 2.5 accounts.
- Account turnover continues to be very high with 3.1 million (over 18% of all accounts) turning over during the quarter, reflecting a strong consolidation in superannuation fund numbers by the corporate and retail sectors. This includes the creation of nearly 1.7 million new accounts and the closure of over 1.4 million old accounts.
- Benefit payments continue to grow at a slightly slower rate than contributions. Benefit payments, excluding transfers, for 1996-97 were up by 11% compared to 1995-96. The lower growth rate of benefit payments as compared to contributions has had the effect of net contributions (ie. contributions less benefits) being 14% higher for 1996-97 as compared to 1995-96. In other words, significantly more money continues to flow into superannuation than is flowing out.