Australian superannuation: an unsustainable pyramid scheme?

Equity purchases by Australian superannuation funds have the potential to stoke, and may already have stoked, an unsustainable asset bubble. While it is impossible to prove this - financial bubbles only reveal themselves after the event - it is clear that Australian superannuation funds fuel an asymmetrical development of equity markets rather than feeding real investment in the way advocates anticipated. Growing superannuation funds provide net money inflows, unmatched by new equity or rises in the level of 'real economy' activity represented by existing shares. Superfunds therefore raise the demand on secondary markets, pushing-up prices.