One Nation’s bid in Parliament today to turn super into an ATM would just drive up inflation, make Australians poorer in retirement, and leave everyone with higher tax bill, the Super Members Council warns.
Australians are doing it tough. Mortgage repayments, rents and everyday household costs are putting pressure on family budgets.
And that’s why policymakers should reduce people's living costs – instead of telling workers to sacrifice their own retirement savings which just hikes inflation and interest rates.
The Council’s modelling shows a typical full-time worker withdrawing a quarter of super contributions for 3 years would be $25,000 poorer (in today’s dollars) by retirement ($110,000 poorer in future dollars). A couple would be around $50,000 worse off in today’s dollars – and $220,000 in future dollars (in nominal terms).
If it became permanent, the policy would wind back the Super Guarantee to 2013 when it was 9% – slashing people’s super by up to $132,000 (in today’s dollars) for an average worker by retirement.
“This policy would actually hurt battling Australians – not help them – by driving inflation and interest rates higher and making it even harder for households to make ends meet,” says the Council’s CEO Misha Schubert.
“It would just make today’s real cost-of-living challenges even worse, leave all Australians poorer in retirement, and hand a bigger bill to taxpayers for the Age Pension, leaving less money to fund the essential services that Australians rely on – hospitals, medicines, schools, roads, and drought and flood relief.”
Australians understand how crucial their super will be to their future. Four in five Australians say it will be critical to their standard of living in retirement.
Older Australians with lived experience of the benefits of compulsory super are crystal clear: 89% of seniors say super should be saved for retirement and say they are concerned about early release proposals.
“The closer Australians get to retirement, the clearer the value of super becomes. Policymakers should not be telling Australians to sacrifice tomorrow’s financial security today and make inflation worse,” Ms Schubert said.
The retirement cost of early super withdrawal is significant because taking money out of super early means losing not only those dollars today - but also losing decades of compound investment returns.
Breaching super's preservation safeguard would also leave future taxpayers with a much bigger tax bill, and greater reliance on the Age Pension.
The policy would also leave taxpayers on the hook for a long-term extra tax bill of $190 billion.
ENDS
About us:
The opinions above are those of the author in their capacity as spokesperson for Super Members Council of Australia (SMC). SMC, the authors and all other persons involved in the preparation of this information are thereby not giving legal, financial or professional advice for individual persons or organisations.
Contact details:
Mike Dolan, 0474 909 471, [email protected]