Finance and Capital Formation in Australia

Finance and Capital Formation in Australia

The financial system has a vital role to play in support of Australia’s economic activity. A critical function of the financial system is facilitating the formation of capital, especially the allocation of Australia’s pool of savings into investments that are productive and promote sustainable growth, good jobs, and shared prosperity. In an increasingly competitive global environment, it is essential that Australia’s financial system perform its role efficiently and effectively

But is finance performing this role well, and at a low cost?

Industry super funds, as stewards of the retirement savings of over five million Australians, have a significant interest in the efficiency and effectiveness of Australia’s financial system. Industry super funds not only rely on investments to provide strong net returns to members, but also to support productivity growth and employment in Australia, which in turn can support the high and stable levels of retirement savings necessary to support our members’ dignity in retirement.

This report evaluates the capital formation efficiency of the Australian financial system over time analysing macroeconomic and financial data.