Slowing superannuation release another headwind for economy

APRA released its early superannuation release data for the week ended 30 August, which revealed that only $381 million was withdrawn from Australia’s superannuation system, taking the total amount withdrawn early to $32.6 billion:

According to APRA:

Over the week to 30 August, superannuation funds made payments to 51,000 members, bringing the total number to 4.2 million since inception. The total value of payments during the week was $0.38 billion, with $32.6 billion paid since inception. The average payment made over the period since inception is $7,680 overall and $8,439 when considering repeat applications only.

As shown in the below charts, industry funds comprise the top six super funds for early release, together accounting for more than half of the total funds withdrawn:

These six industry funds alone have seen total outflows of $16.9 billion from 2.2 million applicants, averaging $7,625 per withdrawal.

The bad news for the economy is that the stimulus from early superannuation release has slowed to a trickle and will soon no longer add to household disposable income nor domestic demand:

This will leave an even bigger demand deficit that will need to be filled via government stimulus.

Unconventional Economist
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Comments

  1. What would MB’s preferred government stimulus spending look like? Green new deal infrastructure investment? Education retraining? Social services?

    • Jumping jack flash

      In my opinion they should be building acres of factories, owned by the state, to produce the useful things that are essential for a society and an economy to produce locally, but no private company would ever produce in Australia because it makes no economic sense to do it here.

      Think of the stimulus effect: The building, the commissioning, the production, the sales, the exports, all the logistics and supply chains! The effect on the economy would be far better and long-lasting than a bridge, train, or a stadium that ends up costing us tolls, fares and fees long after the effect of the construction spend is over.

      Don’t know who would work in the new factories though because everyone has or needs far too much debt to be able to work a standard floor job in a factory. A respectable floor worker would certainly earn enough each week to afford a reasonable standard of living, but nowhere near enough to obtain or service the gargantuan piles of debt that are essential to own these days.

      Perhaps we can import factory workers who have no debt nor debt aspiration?

    • Direct deposits into MyRBA accounts and allow the general public to decide how much they want to save, consume or invest.

      https://theglass-pyramid.com/2020/08/15/myrba-the-quick-guide-and-helpful-links/

      If the government wants to make capital allocations decisions they can do so by raising the funds via taxation.

      If the private sector have great ideas they can raise investment capital the usual ways.

      A bit of trickle up economics is exactly what we need.

  2. They’ve extended everything else, why not just give this particular can another kick, eh?

    Definitely running out of road though, so popcorn time approacheth.

    • Another bite makes them look irresponsible. Next version is mainlining it into housing which, given the mentality of this country, makes them look responsible.