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During a keynote address in Sydney (Monday 20 February), Federal Treasurer Jim Chalmers said he would end the “super wars” by enshrining super’s objective into legislation.
Mr Chalmers has released a consultation paper on the objective for superannuation geared around “safeguarding retirement savings”.
He said that given there was no such agreement on the objective of superannuation, there had been “devastating impacts” on Australians’ savings when the former government allowed billions of Australians to withdraw funds from their super through the pandemic.
“The last decade has seen the former government raid the superannuation system for their own purposes,” he said, noting $36 billion was lost.
Mr Chalmers said these policy decisions came about because there wasn't an agreed objective for superannuation - highlighting the purpose for the current consultation.
“Legislating super will change that because for the first time, we’ll have a true north – if we fail to act in areas like affordable housing, climate, the care economy, and digital, we will face the prospect of an economy that won’t sustain the growth that we need,” he said.
The government’s proposed super objective definition is: “to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way.”
The Treasury reported Australia’s superannuation pool had grown from around $148 billion in 1992 to over $3.3 trillion, which included 78 per cent of the Australian population.
Given the growing pool of super being created, Mr Chalmers said that superannuation was an “increasingly important source of capital in our economy”.
As part of the government’s October Budget, Mr Chalmers previously signaled the importance of using super funds and other institutional investors towards housing investments.
“I have been working really closely and really hard with superannuation and other institutional investors, with the states and territories, with the building and construction industry as well and with the union movement to see what we can do to shift the needle on affordable housing,” he said.
Mr Chalmers thanked Australia’s super fund managers that had “endorsed” its Housing Accord - that recently passed through Parliament - and includes its $10 billion Housing Australia Future Fund.
Opposition slams Labor’s super overhaul
Opposition leader Peter Dutton has argued withdrawing superannuation funds for housing investment would benefit many Australians in need of housing today, such as first-home buyers or women escaping domestic violence.
Mr Dutton said the Liberal government went to the election with a policy that would allow women in that situation to access their superannuation.
“The policy required, though, that people, when they sold the house and there was an uplift in the value they contribute that money back into their super so they can benefit from the compounding of it by the time they retire.
But under Labor, he argued the proposal would mean the super funds can choose to invest your money rather than you.
“The Treasurer is proposing that you can’t use your own super money to help you get into a house as a first home buyer or as I say, a woman escaping domestic violence or wanting to restart her life after a messy separation.”
[Related: Liberals should continue super for housing push, say senator]
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