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Slow employment growth weighs down super contributions
Slower employment growth and a 0.2 per cent decline in wages during the September quarter has led to the first quarterly decline in employer contributions since December 2009, according to the Financial Services Council (FSC).
Employer contributions declined by $453 million or 2.8 per cent on September 2011.
FSC chief economist James Bond said the employment and wages factors were almost certainly having an impact on compulsory superannuation contributions.
Total contributions to superannuation funds also fell dramatically in the September quarter, the FSC's latest bond report revealed.
It said total contributions for the year to September were $85.5 billion, an increase of $3.2 billion from September 2011 - but it followed a decline of $1 billion in the 12 months to the June quarter - the first decline in 12-month super contributions since June 2010.
Member contributions have fallen for the fourth consecutive quarter, which reflected an ongoing lack of confidence in the economy, it said.
The FSC said that although contributions often decreased in September after an end-of-tax-year contributions frenzy in the June quarter, they had fallen even further in 2012.
"Although a decline in contributions is expected every September quarter reflecting large contributions in June before the end of the tax year, the decline in contributions in September 2012 is larger than the usual seasonal pattern," Bond said.
"Australians remain very cautious about putting their savings in superannuation at the moment. A flat domestic economy and continued uncertainty overseas have combined to see poor flows to superannuation," he said.
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