Is Labor’s Plan to Revamp Superannuation Truly in the Best Interests of Its Workers?

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Too often, the great significance is lost in any superannuation discussion: all $3.3 trillion in these retirement funds belongs to every hardworking employee.

Australians have earned and diligently saved their hard-earned money for retirement, expecting it to manage with utmost care and responsibility.

Over the years, political ideology and business interests have shaped decisions about how people’s retirement savings are used; both sides of politics could be accused of this.

For years, exorbitant exit fees have been entrenched in the system. Certain governments made some attempts to address this problem.

 Australians still spend an unbelievable amount of money on superannuation fees – a staggering $30 billion every year (excluding insurance premiums), as the 2018 Productivity Commission report reported.

This figure has likely grown as superannuation balances have expanded. The Productivity Commission review showed that even a mere 0.5 percentage point in fees over an entire career could reduce retirement savings by 12 per cent.

The previous Coalition government had some alterations to address this issue.

The federal government aims to ensure that individuals can enjoy a dignified retirement with the help of both superannuation savings and government support in an equitable yet lasting manner.

To prevent Australians from taking advantage of their superannuation, the government implemented a policy allowing them to withdraw up to $20,000 over two years to cover living expenses. This plan proved incredibly successful and yielded almost $36 billion during its application period.

Labour vehemently denounces the policy as a “messy” and ideologically driven initiative that could deplete people’s retirement savings.

Without consultation, and little consideration, Australians were forced to choose between better incomes for retirement or paying their bills,” Jim Chalmers said.

When many of her HESTA superannuation fund members had their balances depleted to nothing, CEO Debby Blakey emphasised that super should be used for retirement rather than purchasing real estate.

I think there are other ways to deal with the housing crisis,” she said.

The Australian government is grappling with getting people – particularly the younger demographic facing growing living costs, difficulty entering the housing market, and understanding that their retirement savings should not be used to buy a property or repay HECS-HELP debts.

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