Voluntary Superannuation

People First will advocate that contributions to superannuation is voluntary, and instead allow workers to take their superannuation as wages. This would put money back into the hands of hard-working Australians and allow them to decide how best to secure their future.

Superannuation is not working. After 34 years of compulsory superannuation, over half of retirees are still on a full pension which is the same as it was in 1992 when superannuation was made compulsory. As per ASFA, the median superannuation balance for women aged 60-64 is approximately $162,000, and $212,000 for men which is well short of the required circa $321,500 for single pensioners to even get off the full pension, and nowhere near the circa $720,000 to get off the part pension.  

The cost of the pension is approximately $55 billion, yet superannuation tax concessions cost almost $50 billion and most of these concessions go to the highest 20% of income earners. It is clear that superannuation is not reducing the cost of the pension at all. Superannuation is estimated by the productivity commission to cost 1% of fees under management or around $40 billion a year. to just shuffle paper assets. Australia needs to fund real engineers not financial engineers to build real infrastructure not paper castles. 

People First, through its Public Bank will offer a capital guaranteed government bond free from tax and fees. The interest rate will be pegged to the RBA cash rate depending on maturity so that Australians can feel secure knowing their superannuation money will not be lost through malpractice in the financial sector. 

By allowing people to keep their superannuation as wages it will help people save for a house and pay off their home loan faster. 40% of people today retire with a mortgage which is up from 10% in 1992. As a result, many people have to cash in their superannuation when they retire to pay off their mortgage and go on the pension making the superannuation fees they paid an unnecessary cost burden. 

People should be able to control the way in which they manage their finances. They should be able to save for a home, pay off their mortgage or HECS with their savings rather than be forced to put it into superannuation.  For people on a median wage of circa $80,000, the 12% of superannuation they pay is all of the money they would be able save after they pay for cost of living expenses and tax. It is unfair to deny hard working Australians the right to save money for their immediate needs especially housing.