An
extract from Nick Sherry’s (Minister for Superannuation and Corporate Law)
speech to the FPA.
Superannuation
I
would now like to turn to superannuation.
As
I mentioned earlier, yesterday I gave an address to the National Press Club. In
that address I made some comments about the Government’s views on the direction
of superannuation in
Australia
.
I
think it worthwhile to repeat one or two of those messages.
As
I’ve said, the turmoil on Australian and global equity markets has had a
significant and direct effect on superannuation fund balances. Despite this, I
can unequivocally confirm that our superannuation system remains robust and
well regulated.
As
many have pointed out, superannuation is a long term investment.
Australians
typically spend about 35 to 40 years in the workforce before they retire and
over 20 years in retirement. During that period they will experience a number
of investment cycles and there will be time for the markets to recover. History
clearly tells us this.
Over
the long haul, the last 35 years it has delivered excellent real returns of
close to five percent over and above inflation, and this will continue despite
the average -6.4% return in 2007/08 or for that matter
the plus 10-15% each year of the previous five.
What
people must consider is this simple fact: a dollar invested in super ten years
ago was worth $2.07 at 30 June this year; that’s a doubling in just a decade.
Before
individuals, in their response to current movements in their super fund
balance, consider switching to cash or other conservative investment options,
they should seek the advice of their fund or an advisor.
