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Australian economists are debating the use of compulsory superannuation contributions as a tool for macroeconomic stabilization. Proposals include creating an adjustable savings mechanism that the Reserve Bank of Australia could use to manage inflation alongside interest rate adjustments.
Why it matters
This discussion explores unconventional monetary policy tools that could fundamentally change how citizens interact with their retirement savings to influence national economic health.
Using super to fight inflation G By Gareth Hutchens
On the topic of using our super accounts to manage inflation, I wrote in detail about the idea a few years ago (I've attached the story below).
In my piece, I explored a couple of variations on the same idea.
The economist Nicholas Gruen wrote about the idea in 1999, in a paper commissioned by the Business Council of Australia .
Gruen said there was no reason why we couldn't use compulsory super contributions to meet short-term macro-economic stabilisation objectives — for example, by allowing some short-term variation in compulsory super contributions.
"Thus, when macro-economic policy required tightening, the requirement to contribute to superannuation could be increased," he wrote.
"By contrast, where economic stimulus is called for, there may be occasions where temporarily lowering the superannuation contribution rate would be an appropriate instrument."
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