Allowing low-income earners to opt out of compulsory superannuation would be a “despicable attack” on people’s retirement savings, Labor says.
The Turnbull government is reportedly being urged to consider the “opt out” idea in pre-budget submissions.
But the move would strip up to $63 a week, according to reports, from the super savings of low-income earners, harming their ability to plan for retirement.
“This is a despicable attack on the very foundations of a decent retirement for working Australians,” Labor’s superannuation spokesman Jim Chalmers told reporters on Sunday.
“The Liberal Party has never believed in compulsory superannuation and … already they’ve frozen the superannuation guarantee, they’re abolishing the low-income super contribution and these revelations today show that they plan to go even further.”
He described the comments as a “desperate and unhinged scare campaign”, long on dishonesty and short on fact.
Mr Chalmers was joined by the ACTU in criticising the plan.
“Low-paid workers, the majority of who are women, already struggle in retirement. This policy idea would only make things worse,” said ACTU President Ged Kearney.
“How about we top up low-income earners super instead of what we currently do which is top up high-income earners super?” she said.
“Or, let’s push for a wage rise instead of cuts to penalty rates and make big corporations pay their taxes instead of giving them exemptions? There are many solutions that would boost wages and taking away people’s retirement savings is not one of them.”
Deputy Prime Minister Barnaby Joyce declined to acknowledge that the proposal was being considered, but said the government wanted workers to save for their retirement if they had the means to do so.
He wanted to encourage younger people to invest in the housing market, particularly in regional areas where houses were cheaper.
“By the time of retirement … they receive the pension and own the house they are in. They are in a better position than most,” he told Sky News.
Association of Superannuation Funds of Australia chief executive Pauline Vamos said while it could be a “tempting idea” as part of a short-term budget fix, it could leave low-income earners worse off in the long term.
“We need to think about what we need to give up today for tomorrow, and this is what people are not understanding,” she said.
“We have a system who’s strength is based on [superannuation] being universal.
“We do not have the looming problem that many countries have overseas of people not having enough money in their retirement, and the cost of delivering pensions breaking the Government purse.”
-AAP, with The New Daily