The majority (70 per cent) of Australians want the early release of superannuation scheme to end, according to a new poll reported by Industry Super, as it calls to cut the raid while the economy begins to recover.
The finding has come from a UMR survey, with Industry Super Australia commenting consumers will be forced to pay tens of billions more in taxes if the government extends the early super release scheme in the federal budget.
The body has said it will not support a third round of the existing early release scheme due to “poor targeting” and immense long-term costs for taxpayers.
The scheme was already extended from its initial September cut-off date to the end of the year.
Industry Super has warned the scheme will add tens of billions more to the age pension, with individuals expected to become more reliant on government support after draining away their savings.
According to analysis from the body, for each dollar taken out of super early, taxpayers are paying two and half times the amount through higher pension costs.
Around $2.58 billion has been taken from industry funds, the body has calculated.
A 30-year-old who takes out $20,000 could have between $40,000 to $80,000 less in retirement income, while still adding up to $50,000 to the overall cost of the age pension, Industry Super has forecast.
Almost 670,000 Australians are also expected to have to start saving for retirement again after wiping their entire super balances.
Industry Super Australia chief executive Bernie Dean said the scheme had provided funds to many at an uncertain time, but has now “fulfilled its purpose and must come to an end”, with the long-term cost being too great.
“Extending the raid on super will slug young Australians with a great big new tax to pay for bloated future pension cost, drag down investment returns for everyone and will shove more Australians towards poverty in retirement,” Mr Dean said.
“Workers should no longer be asked to sacrifice their future to prop up the economy now, there are other levers the government can pull to stimulate spending and get funds to people who need it.”
However, calculations from the body around early super have come under scrutiny.
ASIC expressed concerns around Industry Super’s modelling in May, saying it did not comply with the regulator’s trustee communication principles.
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].