Advertisement
A leading superannuation expert has called for an open debate on the use of retirement savings for housing and non-retirement purposes as the Coalition’s top brass splits on how to respond to One Nation’s plan to use super to top up wages.
Days after Labor declared the next election a referendum on superannuation, Dr Emily Millane – who is about to publish Super, a history of Australia’s multitrillion-dollar private pension scheme – said the debate on super had become “hysterical”.
One Nation announced a policy on Monday allowing people to cash out a quarter of their 12 per cent yearly superannuation contribution as an effective wage rise for three years to deal with high inflation.
The Coalition was considering a similar plan during Sussan Ley’s leadership and is now mulling more radical options, including using super as collateral to buy a home or as a mortgage offset.
Advertisement
Prime Minister Anthony Albanese and Treasurer Jim Chalmers said Pauline Hanson’s plan would undermine the purpose of compulsory retirement savings and showed Hanson was anti-worker.
While Millane did not offer specific support to Hanson’s idea, the former federal Labor adviser said, “super has also always had uses and roles beyond building retirement wealth”.
“Super has always been deeply political. It was an idea that rose up through the union movement and was given legislative expression by the ALP,” she said, noting a key objective for the policy at its inception in the 1980s was to counter stagflation by substituting short-term wage rises with contributions for retirement.
“Now that we have around $4.8 trillion sitting in the system, it is even more reasonable that we would have conversations about super’s role in the broader economy. The reasons we see people shut this conversation down are political, ideological and because of self-interest.
Advertisement
“There is something about super … that makes people hysterical. Super needs to be locked away and preserved. But this shouldn’t preclude a reasonable discussion about the role of super in the economy, including proposals to boost housing affordability on both the demand and supply sides.”
Millane is a senior fellow at Melbourne Law School and a former researcher at the Grattan Institute, an independent centre-left think-tank, and the ANU’s Tax and Transfer Policy Institute.
On Tuesday, former Grattan chief John Daley said he agreed with the core of One Nation’s proposal, though warned it may be inflationary.
“The core of [the One Nation] plan is right. The idea that people don’t need to save 12 per cent [of their wages for retirement] is true for the vast majority,” Daley told The Conversation. Daley said 9 per cent was the “break-even” point.
One Nation’s super scheme caught Opposition Leader Angus Taylor off guard as his party trailed Hanson and worked through slow internal processes to develop policies on superannuation and housing.
Advertisement
Some senior Liberal MPs want to counter Hanson by shaking up the superannuation system in an even bigger way than One Nation and to link the policies to housing rather than topping up wages.
Housing spokesman Andrew Bragg said this week that “mortgage offsets, collateral arrangements, cash-out measures” were all being looked at and included “pluses and minuses”.
However, some of Bragg’s senior shadow cabinet colleagues have expressed reservations about taking on a big fight with the influential super movement and its union links.
On Wednesday, Treasurer Jim Chalmers released forecasts from the upcoming intergenerational report showing the share of government spending on the age pension is expected to fall due to growth in superannuation assets. The report forecasts that the pension’s call on the budget will fall from 2.3 per cent of GDP now to 1.8 per cent by 2066.
Advertisement
Bill Kelty, an architect of the Hawke-Keating accords that led to superannuation, cautioned against Labor “jumping up and down saying [housing-for-super] is a terrible policy” because Keating himself took to the 1993 election a policy to use super savings to pay for deposits. Labor ultimately walked away from the policy because it could stoke house prices.
Kelty said Australia’s pension system was the international gold standard, as demonstrated when Albanese used the huge pool of funds as leverage when he met Donald Trump in Washington last year and said super funds could invest in US businesses.
The former ACTU head said Hanson and the Coalition might have good intentions in putting forward ideas for how to boost household incomes, but that Hanson’s plan is misguided.
“It’s like Santa Claus stealing from the kids’ money box to buy them their Christmas presents,” he said.
Cut through the noise of federal politics with news, views and expert analysis. Subscribers can sign up to our weekly Inside Politics newsletter.
You have reached your maximum number of saved items.
Remove items from your saved list to add more.
More:
Paul Sakkal is Chief Political Correspondent. He previously covered Victorian politics and won a Walkley award and the 2025 Press Gallery Journalist of the Year. Contact him securely on Signal @paulsakkal.14.Connect via X or email.AdvertisementAdvertisement