ASFA defends super as 'policy success' amid Bragg criticism

The Association of Superannuation Funds of Australia (ASFA) has pushed back against criticism of the compulsory system saying it has delivered significant gains for retirement security and reduced pressure on the federal budget.

ASFA chief executive Mary Delahuntry said the objective evidence shows super has strengthened Australians' retirement incomes while reducing reliance on the Age Pension.

"Super has meant that even as our population ages, the government's Age Pension bill is going down instead of up," Delahunty said.

However, speaking on the ABC Radio National, Senator Andrew Bragg disputed the benefits of compulsory super, describing it as "one of the biggest public policy failures since federation".

"It hasn't helped the budget, and it has not really helped many people get off the pension," Bragg said.

Australia's public pension spending currently sits at 2.3% of GDP, down from 2.8% in 1994-95 despite an aging population, while the OECD average is around 9%.

Treasury projects Age Pension spending will fall further to 2% of GDP over the next four decades, even as the population aged 65 and over grows substantially.

The proportion of Australians ages 65 and over receiving the Age Pension has fallen 12% since 2012, while the retirement-age population has increased by almost 50%.

Delahunty said the decline in pension reliance has also contribute to lower levels of retiree poverty, with relative poverty among Australians aged over 65 falling form about 30% in 2001 to 11% in 2022.

"A lower reliance on the Age Pension is a massive public policy success," she said.

Bragg said he remained sceptical about the system's ability to deliver for Australians but stopped short of committing to a reduction in the super guarantee.

"I would be clear that I'm sceptical about the system's capacity to deliver for the nation, but that's something that I need to discuss with colleagues," he said.

Compulsory super has also generated more than $1 trillion in household savings that would not otherwise exist, with Treasury estimating it has lifted national saving by around 3% of GDP.

ASFA said around half of the system's $4.4 trillion is invested locally, including about $118 billion in Australian infrastructure.

Delahunty argued the full benefits of the system were yet to be realised, given the Superannuation Guarantee only reached 12% in July 2025.

"The Superannuation Guarantee only reached 12% in July last year. Almost nobody retiring today has had a full working life at that rate," she said.

ASFA modelling estimates a 30-year-old on the median wage with $30,000 in super today could retire with about $610,000, suggesting further gains in retirement adequacy and reduced Age Pension reliance remain ahead.