Darin Tyson-Chan, Editor of selfmanagedsuper
There has been much discussion about superannuation over the past few weeks as to the aims it can achieve for the Australian taxpayer. The current round of debate has been prompted by three elements, being Prime Minister Anthony Albanese’s message that the country’s retirement savings pool, now totalling $4.8 trillion, is a “national asset”, the cost-of-living crisis and the housing shortage.
It would seem the government’s labelling of the money accumulated in superannuation funds as a “national asset” is what sparked these new conversations about how the retirement savings should be used as it has prompted the natural reaction that this money belongs to individual Australians themselves and they should be the ones to decide what to do with it.
In particular, it has been argued Canberra should not be allowed to use this money for fiscal policy by channelling it into areas such as infrastructure projects.
The latest dialogue was kicked off by One Nation when it suggested individuals should be able to access 3 per cent of the 12 per cent of their superannuation guarantee to either pay their rent or mortgage over a three-year period.
And I have to say, there is some merit to the proposal. Firstly, 12 per cent is a large chunk of money to be siphoned out of a person’s take-home pay and, secondly, it does seem a little pointless to have savings accessible in the future when you might not make it to that point financially because you can meet your expense commitments right now.
Liberal Senator Andrew Bragg then weighed into the argument and put forward a proposal that people should be allowed to use the superannuation as an offset or collateral to allow them to secure their first home. To this end, Bragg suggested they could use these savings to pay off a mortgage or as assistance for a first home loan.
Now opponents to any of these ideas always bring up forecasts of how much people will lose in the future if they are allowed to access their retirement savings early, with the Super Members Council claiming One Nation’s policy will mean an individual will be $25,000 poorer when they retire.
Seldom, however, do we hear about how superannuants themselves feel about moves like this. Yes, The Australian Financial Review did report a Compass poll found 67 per cent of Liberal voters supported the One Nation policy as did 60 per cent of their Labor counterparts. But what about the subtler attitudes of individuals themselves when politics is pushed aside?
Well, in line with the revival of these debates, consumer research company Redbridge polled Australians as to their thoughts about early access to super and I have to say the results surprised me.
With regard to the use of super to alleviate cost-of-living pressures, Redbridge found individuals were not supportive as they viewed it as a “false choice”.
In an interview on News 24, Redbridge research and reputation director Simon Welsh noted time and time again people responded by saying: “So you’re asking me to cripple my future in order to do something about cost of living, no, when you, the political party or the government or whoever it is that is proposing it, are the ones that are supposed to be doing something about cost of living.”
Welsh indicated the responses reflected a feeling of the proposal being a “scam” as people are being asked to perform a task that is the responsibility of our elected officials.
When examining using retirement savings to help purchase a new home, focus group participants were more accepting of the idea, but still approval of it was not unanimous.
Welsh noted more people supported the policy than opposed it, but also revealed other concerns were raised.
“When you get people into a focus group, that support quickly erodes. So it’s what we call soft support,” he revealed.
“So you start scratching the surface on it and very quickly you get the argument that ‘if everyone has got an extra $50,000 to play with, won’t housing prices go up by $50,000’.”
He explained this sentiment transcends political boundaries and younger Australians have a grievance of a different kind about the topic.
To this end, they feel the proposition presents a situation asking them to choose between super and housing and they question why this should be the case. As an extension, the argument reverts back to the belief they are being tasked with adapting to a situation to achieve a better outcome when it is really the government’s responsibility to find an ultimate solution to the problem.
All of this reflects how multifaceted and how many subtleties are involved in any debate about how super should be used and suggests a deeper conversation on the issue is needed.
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