Published: 06/06/2023
Category: Member Benefits
Published: 06/06/2023
Category: Member Benefits

Industry Super Australia

The government delivered some great wins for workers’ retirement outcomes in this year’s budget.

Mandating that super gets paid with wages, and increasing unpaid super recoupment targets for the ATO, will both considerably diminish Australia’s unpaid super bill.

Right now, that bill sees 1-in-4 workers miss out on a combined $5 billion in super they are owed – costing them up to $60 K in retirement.  

In contrast, it was disappointing to see the Coalition use its budget reply to confirm that it will allow aspiring homeowners priced out of the market to prematurely rip up to $50K from their super to purchase a property.   

Previous ISA analysis shows that a policy which increases demand without increasing supply is like throwing petrol on a bonfire. Allowing couples to take just $40,000 from super would send prices skyrocketing in all state capitals by between 8% – 16%, but the impact would be most severe in Sydney where the median property price could lift by more than $100,000. 

The Coalition policy would also leave every worker tens of thousands worse off, even if they don’t access the scheme. This is because early access schemes force super funds to carry more cash – a lower performing asset.  We’ve already seen this happen across the Tasman, where The New Zealand Retirement Commission has confirmed part of the reason for KiwiSaver’s relatively poorer performance can ‘likely be linked to first home deposit withdrawals’.  

Forcing young Australians to choose between saving for retirement and owning a home is an unfair choice that previous generations were never expected to make. That’s a view held right across the age spectrum. Research conducted in March by the tri-partisan RedBridge group – featuring eight focus groups equally weighted between Millennials, Gen Xers, and Baby Boomers – revealed that Australians regard the proposal as inconsistent with the purpose of superannuation, and likely to artificially inflate house prices.  

Australians don’t need superficial quick-fixes. We need sensible, long-term solutions. Initiatives like the Government’s Housing Australia Future Fund address the root cause of the housing crisis by boosting supply. This brings prices down, and in doing so, will help young people get into a home today without compromising their tomorrow.

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Super for a House: Cementing price-hikes, demolishing retirement outcomes

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Super for a House: Cementing price-hikes, demolishing retirement outcomes