Super shouldn’t be a ‘cookie jar’ to dip into
Superannuation should not be a “cookie jar” for anything that comes up there needs to be a clear industry objective in place to prevent populist approaches misguiding that, according to Aware Super.
Senator Andrew Bragg had recently called it “mean and nasty” to deny early access to super, even beyond disaster support payments.
In addition to the COVID-19 pandemic early withdrawal system, there had always been hardship support and now there was also the first home super saver scheme (FHSSS).
Deanne Stewart, Aware Super chief executive, said the push for early withdrawals for other reasons was a populist approach that concerned her greatly.
“This is why the superannuation industry are calling for a clear objective to be there for superannuation which is about how to actually really help people save for their retirement,” Stewart said.
“It’s a retirement savings vehicle and I think we need to get really clear about that objective the purpose of superannuation and that was partly called for in the retirement income covenant as well.
“Without it, people will be using it as a cookie jar for anything that comes up versus actually facing into what is the right policy of the time.”
Stewart said she recognised the pandemic was (hopefully) a once in a generation event and their ability to access their super was an important opportunity.
“I wasn’t against that because it was a difficult moment, what I would say though is that it needs to be extraordinary because other than that there already is financial hardship access,” Stewart said.
“Ultimately the system is there to be a retirement savings vehicle and the reason that it would concern me greatly if it just suddenly got used left, right and centre for different things that popped up is that what will happen is that it will stop being a super system that should work for all working Australians.”
Stewart said if it stopped being a super system that worked for all Australians it would become a system that only worked for the affluent.
“That’s what will happen because it will enable the Government of the day not to put policies in place protect low income because they will just be told to raid their super,” Stewart said.
“Therefore, not only raiding their retirement savings but then not get the appropriate policy changes or appropriate support of the Government of the day.”
Stewart believed most Australians and the politicians that represented them recognised the benefits of the Australian super system.
“Globally, it is recognised as of the best systems but why it is recognised as one of the best systems is that its mandatory, preservation and there’s a tax advantage to that,” Stewart said.
“We need to make sure that superannuation and the ability to provide dignity for Australians in retirement continues to work for all working Australians and just not just be seen as something that can be played around with by any given politician of the day.”
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