The federal opposition has conceded that the government’s early release scheme has positively contributed to the economy, but flagged concerns about how struggling businesses and consumers will be supported once stimulus measures are removed.
Addressing the Stockbrokers and Financial Advisers Association Virtual Conference on Friday, Labor financial services spokesman Stephen Jones said the Coalition had managed to secure “a sugar hit to the economy” through its early release scheme, which is expected to see around $40 billion pulled out of the super system by the end of 2020.
“There’s no doubt in my mind that [the scheme] has played a huge part in adding to aggregate demand, you can see it in a whole bunch of indicators – it’s had a huge economic impact equivalent to the stimulus provided by JobKeeper,” Mr Jones said.
“But it’s not something that’s going to be available to do again, so all of this leads to questions about what is going to follow. There’s no third tranche of $10,000 cheques coming out of super accounts, the government is going to pull away some of the key support and there is a lot of uncertainty about what happens with JobSeeker beyond December this year.”
Mr Jones added that Labor expected the full economic brunt of the COVID-19 crisis to be felt by Christmas, with relief measures from all levels of government as well as the private sector expected to be gradually removed by the end of the year.
“Whether it’s mortgage deferrals and the approach the banks have taken to mortgage and debt necessarily, that can’t continue on forever, crunch time is coming,” he said.
“A lot of decisions taken by state and local governments, whether it’s relief on rates, rental relief, those things are coming to a crunch in the last quarter of this year, so to some extent the full impact in the real economy has been buffered but that has not gone away.”
Mr Jones said the opposition was committed to ensuring a “capable” financial services sector amid this backdrop, and criticised the “licensed revolt” of government backbenchers at this week’s parliamentary sessions when it came to increasing the super guarantee next year.
“What we need are clear policy settings in super for households attempting to plan their financial arrangements and fund managers seeking to manage wealth in the best [interests] of clients,” he said.
“We are resolved to see the SG move to 12 per cent proceed as legislated – 600,000 Australians have wiped out their life savings through the early release scheme, so more than ever we need [long-term] settings to ensure they can rebuild their savings while they still have time.”
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