Senator Andrew Bragg has called the superannuation system “a failure” and said that the Morrison government’s opt-in super plan was now being “seriously considered”.
Speaking to media, Mr Bragg praised the “sound judgement” of Australians who had withdrawn their super under the early release scheme to pay off their mortgages and said that getting “more people into houses” meant letting them withdraw more.
“There was an early access scheme where people could take up to 10 grand of their super in one hit and the majority of people and most of the money that was taken out of super was put into people’s mortgages to pay them down. So people wanted to improve their personal balance sheets. And that shows that people are smarter than the super funds think. I mean, the super funds, they think everyone’s stupid,” Mr Bragg told media.
Mr Bragg believes that superannuation has made home ownership “more difficult to attain” due to the trade-off between a super increase and wage rises.
“It’s okay for the cigar chompers to say that, you know everyone should have both. But for many people, it’s a real trade off, so the more flexibility that we can give people, I think is the way to go,” Mr Bragg said.
The comments come amid revelations that the Morrison government is considering making some or all of the legislated increase to 12 per cent optional, with workers given the choice to pocket more of their pay instead of contributing to their super.
Mr Bragg called for a form of opt-in super in his maiden speech to Parliament in 2019, where he suggested middle-income earners “could simply tick a box to get a refund when filing an annual tax return”. Mr Bragg told media that the plan for opt-in was now being “seriously considered”.
“The Prime Minister has done a lot to try and help people get into their first homes. We’ve had a number of first home saver schemes. And one thing we haven’t done yet as far as we could do is to open up to super for first time deposits and that’s something that I think we should do, especially for low-income earners,” Mr Bragg said.
But a number of industry bodies, including the Australian Institute of Superannuation Trustees (AIST), have slammed the plan.
“There is a broad understanding that unless we are compelled to save a portion of our wages, very few of us will have enough money for a financially secure retirement,” said AIST chief executive Eva Scheerlinck.
“There are lots of ways to deal with low wage growth but forcing people to use their retirement savings to fund their own pay rise shouldn’t be one of them.”
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