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Superannuation In Australia Essay

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The above table and graph depict the assets of five of the largest financial institutions, which make up the structure of Australia’s financial landscape. As depicted above banks hold the most assets around 3000 billion dollars, followed by superannuation at around 1400 billion, then by Finance corporations having around 100 billion, credit unions holing around 50 billion and Building societies having around 20 billion of assets. This shows the vast difference in size between the different groups within Australia’s financial system.

2. Observations

Recent trends in banks, to understand why banks and superannuation have such a large asset base one must consider recent history. For many years no matter which major economy around the world …show more content…

Superannuation has been on the rise for the past decade as individuals have become more educated about their super contributions and understand importance of saving for the future. This accompanied by the compulsory contributions from employers have driven the asset base to higher as each individual with in Australia is receiving and contributing to their superannuation.

Building societies and Credit Unions, over the past 20 years building societies and Credit unions have more than halved; in the 1960s there were a significant growth of non bank financial institutions as banks were expensive and has strict regulations. The growth of building societies and Credit Unions ensured supply of housing funds and reasonable prices. But in 1980 due to deregulation brought on by the Campbell Inquiry there was significant losses to the market share held by non bank intuitions; this has been caused by acquisitions and mergers in this sector, some building societies and credit unions have even been purchased or converted to a bank. The market share of housing and personal loans given by building societies has fallen from 20% in the 1980s, to less than 5% in 2005, Credit Unions haven’t dropped as significantly but still have a negative trend. These figures and facts depict the competition from banks and the challenge of rising external

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