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Tuesday, 14 December 1993
Page: 4497


Senator BEAHAN —My question is directed to the Minister representing the Treasurer. I refer to the recently published MLC superannuation index, and in particular to its finding that the confidence of Australians in their superannuation schemes is steadily declining. What is the minister's view of this finding?


Senator McMULLAN —The MLC superannuation index is based on a periodic survey conducted for the MLC Life Office. It started in mid-1992 and it broadly measures consumer confidence in superannuation arrangements. So it is very new. The latest index level, released on 1 December, indicated a downward trend in the confidence of Australians in their superannuation arrangements. What this survey does not show is the reasons underlying this trend. MLC has indicated that it will conduct a further survey early next year to explore the reasons.

  The index reported that older Australians are less confident than young people about generating sufficient savings to meet their retirement needs. The lack of time remaining to accumulate a benefit and the long-term nature of superannuation would seem to explain this result. We need to be concerned about what underlies this decline and if it measures a real change rather than just being something thrown up by the nature of this index. It is so new that we cannot be extremely confident about it at this stage.

  There is another important factor to take into account. It may well be that the apparent decline in confidence in superannuation should be interpreted having regard to the fact that people are generally becoming much more aware about how much saving is necessary to generate adequate living standards in retirement. Therefore, as a consequence, more people are questioning whether their existing retirement provision will be sufficient.

  There has been, particularly with the initiation of the superannuation guarantee charge but also broadly, increased debate about superannuation in the community. It is quite plausible that this has led to a change in consumer confidence in superannuation arrangements which cuts across the real change. The community has better arrangements but people are less confident of them because they are more aware of what is required in terms of savings to generate adequate living standards in retirement. So there are some pluses as well as some interesting questions in this survey. The government will be very interested in the outcome of the MLC's further inquiry.

  The index reported that 55 per cent of Australians now believe that their retirement planning is inadequate. This is a positive development because it is likely to lead to an encouragement for greater self-provision for retirement income. So although on the face of it this measurement of consumer confidence is a cause for concern, it is probably more positive than negative.