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Australia’s $4.2tn super system can jump-start economic growth, says SMC
The Super Members Council has outlined a bold reform plan to boost productivity, lift retirement savings, and unlock super’s full potential.
The Super Members Council (SMC) has urged the federal government to back a sweeping package of reforms designed to unleash the full economic potential of Australia’s $4.2 trillion superannuation system and drive long-term national productivity.
In its submission to the 2025 Economic Reform Roundtable, the council has proposed a blueprint to improve living standards, strengthen budget sustainability, enhance intergenerational fairness, and lift retirement balances by unlocking more productive investment pathways for super capital.
“Australia’s super system is our most powerful economic asset in the quest to jumpstart productivity and forge a new blueprint for national economic growth,” the submission stated. “It gives Australia an outsized economic edge over all other nations – and every working Australian owns a stake in it.”
The council recommended targeted reforms to better connect superannuation capital with high-growth sectors such as biotech, medtech, AI, and quantum technologies.
It called for changes to regulatory settings and market structures to enable super funds to more effectively deploy capital into Australia’s most promising science and start-up ventures, as super funds signalled that they are poised to invest $60 billion in unlisted assets and private equity domestically over the next five years, provided regulatory barriers are addressed.
However, the SMC further warned that policies undermining liquidity and long-term investment horizons would threaten the system’s ability to provide countercyclical support to the economy, a key stabilising feature acknowledged by the Reserve Bank of Australia (RBA).
To improve regulatory efficiency, the SMC has recommended a dedicated Productivity Commission review to streamline reporting obligations and reduce the financial burden of duplicative regulation, without compromising consumer protections.
On retirement outcomes, the submission said that current national policy settings should do more to enable super funds to outperform.
This included reforming the existing performance test, which the council said risks penalising funds that invest in new and emerging asset classes by diverging from passive index benchmarks.
“Smart investors have long understood the key to maximising long-term returns is to deploy capital where it can be most effective at outperforming the pack,” the submission stated.
According to the council, the average retirement balance of $200,000 today could more than double for current younger workers (up to $500,000 for a typical 30-year-old) if reforms are adopted to support more dynamic, future-focused investment strategies.
The council has also urged the roundtable to endorse the prompt rollout of payday super laws to halt the loss of contributions for 3.3 million Australians, along with tax relief for low-income earners and extending super coverage to workers under 18.
Finally, the submission stressed that fundamental policy pillars underpinning the super system must be protected to sustain long-term fiscal and economic strength.
With Australia’s age pension costs as a share of GDP projected to fall from 2.3 per cent to 2 per cent in the coming decades, the council said super remains a vital bulwark against demographic pressure and a shrinking tax base.
“Policies that undermine the foundations of super also put this role at risk,” the council warned.
AUTHOR
Adrian Suljanovic
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