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Date Published : Friday, August 29, 2008
Consumers struggling with their mortgage and credit card repayments are forgoing contributing to their superannuation savings, it has been reported.
Industry statistics supplied to the Australian newspaper illustrate that contributions are at a two-year low with only $12.6 billion paid into superannuation during the March quarter.
This represents a 13 per cent fall from the $14.45 billion that was paid in during the corresponding three months of last year.
In the June quarter of 2007, $30.79 billion was transferred into the same accounts as employees capitalised on tax changes by the Howard regime, according to Craig Dunn chief executive of AMP, one of Australia's largest superannuation account managers.
"Investor sentiment is very subdued, which is very understandable in this environment,'' Mr Dunn told the Australian.
.
Mr Dunn expects the investment environment to be "very challenging" during the next six months.
"Our own view is that with oil and the easing of rates, as we move into 2009, the economy and the markets are likely to strengthen and we expect investor sentiment to turn around and be more positive," he added.
Official interest rates are widely expected to be cut by the Reserve Bank of Australia at its board meeting next week.
This week AMP reported that for the first six months of 2008, its net income fell 22 per cent from $470 million to $366 million.
As well as superannuation services, AMP is one of Australia's largest life insurers and it has joined the growing list of insurance providers that are posting falling profits, including Suncorp, QBE and Insurance Australia Group.
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