Australians overwhelmingly believe that the purpose of superannuation is for financial security and wellbeing in retirement, according to research.
In a survey of over 1,100 Australians, 80 per cent believed in the financial safety net offered by the super system.
Additionally, two-thirds agreed super should only be accessed before retirement age in cases of extreme hardship.
According to Industry Super Australia (ISA), the Government had “wisely mirrored the community’s definition of super by putting preservation at the core of its proposed wording for the legislated Objective of Super”, which closed consultations on 31 March.
“Australians know the whole purpose of super is to generate money that’s preserved for their life in retirement, so it’s good to see the government moving to embed this in the law,” said Bernie Dean, ISA chief executive.
“Having super’s purpose in our law will safeguard members’ money for generations to come and stop governments repeating disasters like the early release of super scheme — which is proving to be a type of economic long COVID-19, causing super balances to dwindle and heaping further pressure on the Age Pension.”
Per the research, even Australians with financial troubles felt super should only be accessed in extreme circumstances. Over half (57 per cent) of those who reported they were currently in serious difficulty said this should be the case.
By enshrining equity, sustainability, and preservation in the government’s proposed objective, future policy changes would focus on delivering the best possible outcomes for all workers, ISA argued.
Additionally, the industry super fund added that writing super’s purpose into law would avoid mistakes like the COVID-19-era early release of super scheme, where some $38 billion had been withdrawn from over 2.6 million Australians’ retirement savings.
Dean added: “Politicians that want to bust open super for political purposes should know that community opinion is against them and won’t take too kindly to their savings being undermined”.
ISA modelling suggested that a 30-year-old who took out $20,000 during COVID-19 could be up to $80,000 worse off at retirement. Additionally, every $1 taken out of super could result in an up to extra $2.50 added to future pension costs.