By Rebecca Thistleton
The McKell Institute has called on the Commonwealth to protect superannuation’s integrity through legislation son Australian workers can have more faith in the system.
The call came in response to a Treasury consultation paper, Legislating the objective of superannuation, which explores potential frameworks for enshrining the objective of superannuation in legislation.
The McKell institute has submitted a suite of work highlighting the impact of early superannuation access and the long-term economic benefits of universal superannuation in response.
McKell’s research found that during the pandemic, when people had the option of withdrawing up to $20,000 of their super, Australia lost $4.7 billion in superannuation returns in just one year.
For those who withdrew the maximum amount, that represents a $3,644 loss in only 12 months. In many cases, putting $20,000 on a credit card would have been more responsible. If stimulus had been provided by Government debt the cost would have been around 2.5 per cent p.a.
Rebecca Thistleton, the McKell Insititute’s Executive Director, Victoria said Australia’s superannuation scheme was undermined when it wasn’t used as intended.
“Most people are building their superannuation for retirement without inheriting substantial wealth along the way, our superannuation system must operate on that basis,” she said.
“That’s why we support the Commonwealth’s move to legislate the objective of superannuation – to make sure it is an equitable system that benefits all workers.”
Australia has led the way in looking out for the long-term financial security of workers in retirement.