The Government needs to immediately release the report of its Retirement Incomes Review panel in circumstances where the entire process must be used to strengthen and not undermine the policy foundations of the superannuation system, according to Industry Super Australia (ISA).
In doing so ISA has questioned the Government’s approach to the Retirement Income Review pointing out that there was little or no consultation with no draft being circulated for stakeholder comment and no data made available for examination by external experts.
“In the interests of transparency, it is critical this report is immediately released to the public so its findings can be tested and verified,” ISA said in a formal statement.
It said the report should not be used as a stalking horse to erode superannuation.
“The RIR panel must reject dangerous proposals that allow low-income earners to opt-out of super which would only leave them paying more tax now to then have nothing saved for their future,” ISA said. “As too should attempts to raid super to pay for house deposits or mortgages – which would only erode retirement savings and increase house prices – pushing the dream of home ownership further away.”
“More than 2.5 million Australians have accessed the government’s early release of super scheme and at least 560,000 Australian have emptied their super accounts forcing them to start saving for retirement again.”
ISA said the report represented an opportunity to build on the successful super system with sensible evidence-based reform that helps provide members with a dignified retirement, addresses entrenched inequalities and tackles under performance while strengthening the default system.
“If used as a stalking horse to erode the policies that underpin the system - compulsion, preservation, universality and a strong default system – workers’ retirement savings and the economy will suffer,” it said.
“The only way to deliver a dignified retirement is to stick to the legislated increase to the super rate to 12%. The increases are more important than ever after balances were hit through the government’s early release of super scheme and the coronavirus downturn,” the ISA statement “Cut the rate and ISA analysis shows more than eight million Australians could be worse off.”
“For an average 30-year-old couple working full time, cutting the super guarantee increase would deprive them of up to $200,000 in super by the time they retire. During retirement they would lose up to 20% of their income or between $7,000 to $10,000 a year.”
“Breaking the Government’s repeated promises to stick to the legislated increase will not only force workers to either retire with less or work longer - it will undermine super funds’ investment plans to help Australian businesses and build new job creating infrastructure and property projects,” ISA said.