Financial services industry bodies have welcomed the release of the “2026 Intergenerational Report” and its acknowledgement of the role superannuation plays in funding Australians’ retirement and reducing the burden on the tax system.
In the report the government noted spending on the age pension and service pensions is projected to fall from 2.3 per cent of gross domestic product (GDP) in 2025/26 to 1.8 per cent of GDP in 2065/66.
“Superannuation will support a higher standard of living for older Australians in retirement, with superannuation drawdowns projected to rise to almost 6 per cent of GDP by 2065/66, as well as reducing reliance on the age pension,” the report stated.
Association of Superannuation Funds of Australia (ASFA) chief executive Mary Delahunty said the report highlighted how super was working in the way Australians needed it to work.
“For millions of Australians, their super will be the difference between relying heavily on government support and having the savings to make their own choices about the life they want to live in retirement,” Delahunty explained.
Financial Services Council chief executive Blake Briggs acknowledged the report contained the good news that Australians are living longer, which underlined the importance of a robust retirement system.
“The other piece of good news is that Australia’s superannuation system will deliver for Australians in terms of higher balances in retirement and a lower call on Commonwealth age pension spending as a percentage of GDP,” Briggs indicated.
The Super Members Council (SMC) compared Australia’s low age pension GDP burden to those of other Organisation for Economic Co-operation and Development (OECD) countries where in the UK it is 10 per cent, Canada 8 per cent, New Zealand 7 per cent, and the US 6 per cent.
“Australia is getting older, but thanks to super, our age pension costs are projected to fall rather than rise. That’s an extraordinary achievement and something very few countries can match,” SMC chief executive Misha Schubert concluded.
