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Labor warns young people’s losses through early super could top $51bn

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Australians under the age of 35 have been forecast to lose out on $51 billion in retirement due to the early super scheme, according to new modelling from Labor, but the party has cautioned its calculations are likely to be underestimates.

Labor, which has openly opposed the early release measure, has released calculations using ATO data predicting consumers under the age of 35 will be collectively at least $51 billion worse off in retirement, and will lose out on at least $44 billion by 2052. 

According to the estimates, after factoring for inflation and the cost of living, a 25-year-old who withdraws $20,000 will be $80,000-$100,000 worse off in retirement. A 35-year-old who withdraws $20,000 will lose at least $65,000 at retirement. 

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Meanwhile, Australians under the age of 50 are predicted to lose at least $83 billion in retirement.

More than half a million Australians (606,000) were said to have emptied their super accounts, with 494,000 of them being under 35 years old.

Labor MP and shadow assistant treasurer Stephen Jones also noted the possibility of fraud under the scheme, saying the government is still yet to reveal how many fraudulent claims have been made or what it is being done to compensate victims after their accounts have been wrongly raided.

Further, he expressed concerns around individuals potentially withdrawing funds to use for online gambling, stating: “Poor communication and misleading promotion of the scheme – including by government senators – may mean that some have accessed the scheme incorrectly.” 

“This could leave well-intentioned individuals struggling with the costs of the coronavirus pandemic facing fines of up to $12,600,” he said.

“And in July, senior public servants conceded that the early release scheme may result in Australians losing access to JobSeeker and other income support if they were to use the scheme.”

Mr Jones also criticised the Morrison government for deciding to extend the early release measure for another three months, with no consultation, formal announcement or parliamentary review. 

Senator Jane Hume, the assistant minister for superannuation fired back to a tweet from Mr Jones calling the early release “as dumb as introducing cane toads” on Sunday.

“They [Labor] lost in 2019 by looking down on ordinary Australians,” Ms Hume tweeted. 

“Now they and their elite mates say you’re stupid if you choose to access your super during this crisis. ‘Dumb as the introduction of cane toads’ in fact. Unlike Labor we’re backing you – not fund managers.”

Last week, Mr Jones demanded the auditor-general launch an investigation into the scheme, which also drew scorn from Ms Hume.

 

Labor warns young people’s losses through early super could top $51bn
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Sarah Simpkins

Sarah Simpkins

Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth. 

Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio. 

You can contact her on [email protected].

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