The early super scheme has been extended from 24 September to 31 December as government support evaporates, and not everybody is happy.
“This is a vote of no confidence from the [government] in their own ability to deal with soaring unemployment and the economic storm ahead,” said senator Stephen Jones. “Not only does Scott Morrison have no plan to create jobs and get Australians back to work, the [government has] told Australians doing it tough that their only option is to raid their retirement savings.”
Mr Jones also expressed concern over the fact that the government has not revealed how a number of fraudulent claims were made or how victims of those claims are being compensated, while flagging reports that super “may be boosting the profits of dodgy overseas gambling businesses” instead of “addressing real hardship”.
“No one deserves to be left behind in retirement, but too many Australians retire without enough,” Mr Jones said. “No one should be forced to work into their 70s, but Scott Morrison and the Liberals have already forced 2.5 million Australians to raid their retirement savings to get through the COVID crisis.”
Treasurer Josh Frydenberg said that while around 30 per cent of early super withdrawals had been put into savings, it was “the people’s money” and they should be able to do what they want with it.
“We’re living through a pandemic,” Treasurer Frydenberg told the National Press Club. “These are unusual times… if people want to make that choice of whether they want to put money into the bank and then use that money as they need it to then spend through this crisis, then that is a decision for them.”
But the Association of Super Funds of Australia believes that superannuation has done the “heavy lifting” in “difficult times” and that the government must proceed with the legislated increase in the super guarantee to shield retirement savings from the COVID-19 shock.
“These are anxious times and we face challenging economic headwinds,” said ASFA CEO Dr Martin Fahy. “As the Treasurer outlined today, Australia remains in a relatively manageable position in terms of debt, compared with our OECD peers.
“If [low-income] earners and young people’s superannuation continues to be eroded by the early release stimulus scheme, we risk losing sight of superannuation’s intended purpose, which is to provide adequate income for Australians in retirement.”
The most recent APRA figures put early super withdrawals at $28 billion, slightly above Treasury’s initial estimate of $27 billion. Investor Daily understands that ISA expects that the extension will take the scheme over its revised $40 billion forecast. The Treasurer’s office was also contacted for a revised estimate of withdrawals, but has not responded.
