Jane Hume, Shadow Minister for Finance, stressed recently that the Australian retirement income system is a ‘three-pillar’ system, one that encompasses a means-tested age pension, compulsory superannuation savings, and voluntary private savings both inside and outside the super system.
In a statement made available to SMSF Adviser, Ms Hume argued against the underlying message behind the Labor government’s proposed objective of super, one which rests on the idea that superannuation is aimed to “preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way”.
According to Ms Hume, Labor’s suggested objective only focuses on one pillar of retirement and ignores the importance of the aged pension and homeownership.
She stressed that the recently published Intergenerational Report echoed the retirement income review in showing that higher rates of homeownership have been an important component of retirement outcomes for Australians.
“Those that own their own home, generally have lower housing costs in their retirement compared to renters, as well as a store of wealth that can be drawn down on in retirement.
“Everything points to the fact that owning your own home is the biggest indicator of economic security in retirement and that is why we are committed, the Coalition is committed to our policy to allow Australians to use their superannuation to buy their first home and a policy that will particularly support young people and also separated women.
“Our policy to be very clear, allows people to put money from their superannuation into the deposit on their first home, but it requires them to put it back into superannuation plus any growth of the value to ensure that they are no worse off in retirement, but they still get that first important rung on the property ladder”.
The Labor government has been a fierce opposer of allowing Aussies to tap into their superannuation savings ahead of time. Earlier this year, Treasurer Jim Chalmers argued that the Coalition’s policy which allowed Aussies to tap into their super during the pandemic was a “debacle”, and something a legislated objective of super would prevent.
“Without consultation and little consideration, Australians were forced to choose between better incomes in retirement or paying their bills. Funds were forced to liquidate assets. And $36 billion of Australian retirement savings were lost. Never again. Our government will take a different approach,” Mr Chalmers said in February.
The federal government’s proposal to legislate an objective of superannuation was previously well-received by industry groups, super funds, and financial services companies.
It is widely expected to underpin what has been perceived as much-needed policy stability and help anchor future policy debates.
Last month, Financial Services Minister Stephen Jones said draft legislation to enshrine the objective of super will be put to Parliament within months.
“In coming months, we will release draft legislation for consultation before introducing it to Parliament soon after,” he said.
The SMSF sector has argued that the government must first clarify the objective of super before it introduces any other legislation including the proposed $3 million super tax proposal, which is still under consultation.
