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Super adds to net Saving

A paper released by the Reserve Bank this week (www.rba.gov.au) responds to the challenge as to whether compulsory superannuation has a net national savings benefit after allowing for reductiosn in other forms of saving. The conculsions of the paper entitled "The Impact of Superannuation on Household Saving" by Ellis Connolly and Marion Kohler estimates that around 38 cents of each dollar in superannuation contributions are offset. In other words, 62 cents in each dollar are saved additionally. They estimate that compulsory superannuation may have increased the household saving rate by up to 2 per cent in recent years. Overall, the results suggest that government policies encouraging superannuation have added to both household saving and wealth.

Posted Thursday, 11 March 2004

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