Retirement
‘It’s not a piggy bank’: Super slams unrealistic retirement review
Industry super funds have slammed the government’s Retirement Income Review, labelling it ‘unrealistic’ while warning against using compulsory superannuation as a piggy bank.
‘It’s not a piggy bank’: Super slams unrealistic retirement review
Industry super funds have slammed the government’s Retirement Income Review, labelling it ‘unrealistic’ while warning against using compulsory superannuation as a piggy bank.
In a new report by Industry Super Australia, they admit that higher superannuation will come at the cost of wage growth, but they say the trade-off is worth it.
The report shows that the legislated increase to 12 per cent will come at a small cost to jobs and wages before driving a $12 billion expansion to the economy in the medium-to-long term – something researcher ACIL Allen believes will “lead to more jobs, higher real wages and higher real incomes for Australians than will occur without the increase in the SG rate”.
“What the modelling demonstrates is that there is a small, short-term dip in average wage rises, but by 2025 real wages start to increase… To put that in perspective, the impact on wage rises for average wage levels in that period to 2025 when there is a dip is 30 cents a week, and I reckon we can handle it,” Industry Super chairman Greg Combet said at the launch of the report.
Mr Combet also noted superannuation, which is currently being floated as a way to pay for aged care as well as housing affordability issues, should not be used to solve unrelated policy issues.
“It’s not a piggy bank you dig into every five minutes. That’s the craziness of a lot of the things you hear coming from some of the backbenchers in the Coalition. If there is concern about wages – and I’m concerned about it – there have been productivity improvements of substance over the last decade and workers have not shared in them. We need to address that.”
Former prime minister Malcom Turnbull shares Mr Combet’s analysis, saying that despite figures by CoreLogic showing house prices rose 2.1 per cent in just a month, he urged against using superannuation to cover housing policy.
As the housing boom continues, Liberal backbenchers, including Tim Wilson, have been vocal critics of the superannuation system, highlighting the importance of home ownership over superannuation.
“I always believe that home ownership is actually in Australian’s best interests. Some people may think having superannuation balances is more important than that. As a public policy principle, the greatest leading indicator of poverty in retirement is not owning your own home… I make absolutely no apology: I am for home ownership,” Mr Wilson told the media.
However, Mr Turnbull believes using superannuation to purchase a property will simply allow for further price increases.
“The proposition that super contributions should either not be increased or should be able to be accessed to be put into the housing market is surely one of the craziest ideas I’ve heard,” Mr Turnbull said.
“I resisted efforts to do this when I was prime minister... but we have a housing affordability issue here in Australia, and there is a bunch of reasons for that, but diverting even more savings into housing is simply going to bid up the price of housing.”
According to Mr Turnbull, the last thing the housing market needs is stronger demand.
“All that will happen is the additional capital that is brought to better the housing market will be capitalised into the housing market and they will go up, so it’s a zero sum game,” the former PM said.
Backing Mr Turnbull’s firm stance, Mr Combet noted the estimated impact of a super for housing swap.
“We did some modelling on [superannuation for housing]. If a couple was allowed to take out $40,000 to contribute to purchasing a house, for example in Sydney, the impact will be to add more than $130,000 to Sydney’s median house price. It’s crazy policy,” he said.
RELATED ARTICLES
About the author
About the author
Superannuation
Aware Super elevates tech leadership with strategic appointment of Richard Exton
Aware Super, one of Australia's largest industry super funds, has announced a pivotal appointment to its executive team, underscoring the growing importance of technology, data, and artificial ...Read more
Superannuation
Rest appoints Marina Pasika as interim head of private markets
Rest, one of Australia's largest profit-to-member superannuation funds, has announced the appointment of Marina Pasika as the Interim Head of Private Markets. This decision comes as the fund embarks ...Read more
Superannuation
Payday Super bill introduces new challenges for SMBs, reveals Employment Hero CEO
The introduction of the Payday Super bill to the Australian Parliament has sparked a significant response from the business community, particularly among small and medium-sized businesses (SMBs)Read more
Superannuation
Rest urges Parliament to expedite payday super legislation
In a significant move towards enhancing retirement outcomes for Australian workers, Rest, one of the country's largest profit-to-member superannuation funds, has expressed strong support for the ...Read more
Superannuation
Recalibrated super performance test aims to enhance accountability and investment opportunities
In a move that signals a shift rather than a cessation, Australia's government has announced a targeted review of the superannuation performance test. This recalibration, prompted by the latest ...Read more
Superannuation
Super performance test faces a fork balancing member value productive investment and regulatory trust
APRA’s latest superannuation performance test results have reignited a high‑stakes debate: does the test optimise member value or unintentionally curb long‑term investment in housing, infrastructure ...Read more
Superannuation
Aware Super unveils innovative digital tool to boost retirees' financial confidence
Aware Super has unveiled a groundbreaking digital advice tool, Retirement Manager, designed to empower retirees by addressing their most pressing financial concerns. Developed in collaboration with ...Read more
Superannuation
APRA's super shake-up: Balancing accountability and innovation in the next round
Australia’s performance test has forced long-overdue transparency in super and accelerated consolidation. But as the regime broadens, its blunt edges are colliding with investment complexity, ESG ...Read more
Superannuation
Aware Super elevates tech leadership with strategic appointment of Richard Exton
Aware Super, one of Australia's largest industry super funds, has announced a pivotal appointment to its executive team, underscoring the growing importance of technology, data, and artificial ...Read more
Superannuation
Rest appoints Marina Pasika as interim head of private markets
Rest, one of Australia's largest profit-to-member superannuation funds, has announced the appointment of Marina Pasika as the Interim Head of Private Markets. This decision comes as the fund embarks ...Read more
Superannuation
Payday Super bill introduces new challenges for SMBs, reveals Employment Hero CEO
The introduction of the Payday Super bill to the Australian Parliament has sparked a significant response from the business community, particularly among small and medium-sized businesses (SMBs)Read more
Superannuation
Rest urges Parliament to expedite payday super legislation
In a significant move towards enhancing retirement outcomes for Australian workers, Rest, one of the country's largest profit-to-member superannuation funds, has expressed strong support for the ...Read more
Superannuation
Recalibrated super performance test aims to enhance accountability and investment opportunities
In a move that signals a shift rather than a cessation, Australia's government has announced a targeted review of the superannuation performance test. This recalibration, prompted by the latest ...Read more
Superannuation
Super performance test faces a fork balancing member value productive investment and regulatory trust
APRA’s latest superannuation performance test results have reignited a high‑stakes debate: does the test optimise member value or unintentionally curb long‑term investment in housing, infrastructure ...Read more
Superannuation
Aware Super unveils innovative digital tool to boost retirees' financial confidence
Aware Super has unveiled a groundbreaking digital advice tool, Retirement Manager, designed to empower retirees by addressing their most pressing financial concerns. Developed in collaboration with ...Read more
Superannuation
APRA's super shake-up: Balancing accountability and innovation in the next round
Australia’s performance test has forced long-overdue transparency in super and accelerated consolidation. But as the regime broadens, its blunt edges are colliding with investment complexity, ESG ...Read more
