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‘Hugely disruptive’: Combet accuses Liberal MPs of undermining super system

“Any policy changes in superannuation that affect how much liquidity you need to hold … and how much revenue is coming in all affect how much you can allocate to long-term investments like infrastructure and property,” he said in an interview.

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“There’s all sorts of signals from some backbenchers in the Morrison government that they’re going to campaign to freeze the super guarantee yet again.”

About 10 Liberal MPs recently called for next year’s legislated rise to be delayed or scrapped and several support changes that would allow Australians to dip into their retirement savings to buy a home.

The Grattan Institute also opposes lifting the super guarantee, arguing workers will sacrifice wage growth to pay for it, but the rise is supported by Victorian Premier Daniel Andrews and the Australian Council of Trade Unions, who believe the current rate is inadequate for a comfortable retirement.

Backbenchers’ claims the economy had been too badly affected by the pandemic for employers and workers to afford the increase did not hold water, Mr Combet said, pointing out the Fair Work Commission recently awarded an increase in the minimum wage.

“The argument is always that it can never be afforded but the increase that’s already legislated is still 12 months away and I certainly hope we’re well on the way to economic recovery at that point,” he said, adding the increase was the equivalent of a $5-a-week extra contribution for someone earning $50,000 a year.

“Generally, the people who argue [the increase] be delayed or super should be opened up for something else … they don’t actually support a compulsory superannuation saving system. Unfortunately, that has been a fault line in Australian politics for many years.

“Basically what they’re campaigning for is to undermine the superannuation savings system. That’s a hugely disruptive thing.”

The findings of a review of the retirement system, to be handed to Treasury on July 24, are expected to spark fierce debate about the future of superannuation.

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This could include a push to keep the early access scheme introduced at the height of the coronavirus pandemic, letting struggling workers withdraw up to $20,000 from their super. An extension of this scheme was recently proposed by senator Andrew Bragg.

“There will be more people with nothing in their accounts [if this happens],” Mr Combet said. “It makes it so much harder and pushes the cost onto future generations to pay the pension.”

Half a million people had emptied their super accounts due to the early access scheme, he said. Australian Prudential Regulation Authority data released on Monday shows 2.4 million people have applied for the scheme.

If the super guarantee increase did not go ahead, the average 30-year-old man who withdrew $20,000 would have $180,000 less in retirement or face an extra 6½ years of work to make up the shortfall, Mr Combet said. For a woman of the same age this translated to $150,000 or eight more years of work.

“Every one of these policy changes puts more people in the future on the age pension and increases the tax burden to finance it, so I think we do need to have a very clear view in Australia that superannuation savings are for retirement.”

ISA, the industry superannuation lobby group, will launch a public campaign and advertising blitz to inform its 5 million members about the infrastructure plan.

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