The Association of Superannuation Funds of Australia (ASFA) has directly confronted the Grattan Institute over claims that the Age Pension and rent assistance are more efficient than superannuation in providing for an adequate retirement.
Responding to a report in Money Management, ASFA chief executive, Dr Martin Fahy said the Grattan Institute’s claims, especially those surrounding ASFA’s comfortable retirement standard, suggested it was out of touch with the reality of living costs in Australia.
He said the Grattan Institute’s willingness to condemn hard working Australians to a life of near poverty in retirement was patronising and represented poor public policy.
“The submission from Grattan, to the Senate Standing Economics Committee Inquiry into the Superannuation (Objective) Bill 2016, is attacking a super system internationally acknowledged as first class and one that is delivering a higher standard of living for retirees,” Fahy said.
He said Grattan’s claim that annual expenditure of $43,372 for a single person and $59,619 for a couple at age 65 would deliver a luxurious lifestyle suggests the think tank is out of touch with the reality of living costs in Australia.
“The ASFA comfortable standard is based on a detailed analysis of the level of spending needed to meet the realities of retirement, including: health and aged care with the associated out-of-pocket medical expenses; running a modest car; basic home maintenance; and being able to run air conditioning in summer and heating in winter,” Fahy said.
He said ASFA believed Australians were justifiably worried about longevity and aged and heath care costs in retirement and superannuation represented a big part of the solution.
Fahy said Australians did not aspire to retire on the Age Pension and the Grattan Institute’s aspirations flew in the face of a long tradition of a progressive improvement in living standards for successive generations.
The Grattan Institute’s submission to the Senate Economics committee inquiry into the Government’s legislation around the objective of superannuation urged Parliamentarians to reject the view that superannuation’s objective is to provide an adequate, or ‘comfortable’ retirement income for all Australians, claiming the Age Pension and rent assistance represented better tools than superannuation to provide an adequate retirement for those on low incomes.
