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Monday, 29 August 1994
Page: 534

(Question No. 662)


Senator Patterson asked the Minister representing the Treasurer, upon notice, on 7 October 1993:

  What is the best current estimate of the total amount of capital invested by retired Australians?


Senator Cook —The Treasurer has provided the following answer to the honourable senator's question:

  The best current estimate of the total amount of capital invested by retired Australians is between $330 billion and $350 billion as at December 1993, compared with $1242 billion for all Australians.

  This estimate includes financial assets of around $100 billion and housing assets of around $240 billion.

  The estimate is compiled by applying, asset holdings from the 1989/90 ABS Income Distribution Survey to the December 1993 Financial Accounts of the Australian National Accounts.

  The estimate of financial assets of around $100 billion held by retirees is consistent with estimates based on data from the Department of Social Security of financial assets of around $38 billion for age pensioners in 1993.

  Assumptions underlying the analysis are:

  Retired persons are:

  single persons over 55 years of age and not in the labour force, or

  married couples where one person is over 55 years of age and both are not in the labour force.

  Asset holding ratios for retired persons have not significantly changed since 1989/90.

  Retired persons hold between 5%-15% of reserves of life offices and pension funds.

  Housing equity has been inflated by the growth in the Dwelling Implicit Price Deflator of 5.7% between 1989/90 and December 1993.