One Nation policy to turn super into an ATM would make battling Australians $25,000 poorer and make cost of living pressures worse
One Nation’s bid to turn super into an ATM would make battling Australians $25,000 poorer by retirement, slash investment returns, hit taxpayers with a whopping Age Pension bill, and drive up inflation and interest rates.
And by stoking inflation and interest rates, it would actually make cost-of-living pressures worse.
Modelling by the Super Members Council shows a median full-time worker withdrawing 3% of contributions for 3 years would be $25,000 poorer by retirement. For a couple it would be more than $50,000 worse off.
“Turning super into an ATM is a reckless idea that would make battling Australians poorer,” said Super Members Council CEO Misha Schubert.
“This would belt battlers – not help them – by damaging their super and their retirements and driving up both inflation and interest rates which would make the cost-of-living pressures even worse, not better. We urge One Nation to ditch the idea.”
“There are smarter and better ways to help Australians struggling with housing costs – such as talking to your bank about relief options – and none of them involve telling Australians to raid their super and their futures.”
One Nation says the policy would last for three years. Australians know that when a politician pushes something as a short-term measure, they’ll always be tempted to make it permanent.
Australians love their super because they can already see it working in the lives of today’s retirees. They know it’s got one job – to be their paycheque for decades in retirement.
If it became permanent, the policy would wind back the rise in the Super Guarantee rate from 9% to 12% over the past decade – slashing people’s super by up to $132,000 for an average worker by retirement.
Australians would also pay more tax if politicians weaken super’s safeguards. The hit to retirement savings would push up Age Pension costs which will need to be funded through higher taxes on everyone.
Busting open people’s super would also force their super funds to invest differently as their money would need to be invested in short-term liquid options.
That would damage the long-term returns for all Australians with super, which would mean even those Australians who keep their super intact could have up to $246,200 less super at retirement.
The Early Release of Super scheme during COVID is a case in point. At the start of the pandemic, the safeguards on super being saved for retirement were briefly suspended.
Australians were encouraged to withdraw super to support themselves – before they knew that JobKeeper was on the way.
And now we know what those early withdrawals have cost. Almost $38 billion was withdrawn, mostly by younger Australians and research has shown a spike in spending on alcohol, gambling, furniture and takeaway food.