Senator Jane Hume has defended the government’s controversial early super scheme, accusing funds of demanding policy certainty of making “a mountain out of a molehill”.
In the wake of the government’s early super release scheme, several funds have demanded greater policy certainty in order to maintain their long-term investment strategies and to ensure that superannuation doesn’t become a national piggy bank in the event of another recession.
But Senator Hume has said those fears don’t have substance.
“They’ve made a mountain out of a molehill here,” Ms Hume told media. “The amount that has been taken out for early release is less than 10 per cent of contributions that were made last year. There is no way that superannuation funds should have to dramatically adjust their investment strategies to account for such a small amount of money.”
Ms Hume said that early super was a “nice excuse” but that it hasn’t “changed the face” of the superannuation system.
“The funds have had no real problems paying out this money,” Ms Hume said. “APRA identified before we began that it shouldn’t impact the system overall at all.”
Ms Hume also hit back at research that indicated that early release super had been used for discretionary spending, saying that it wasn’t the government’s place to tell people how to spend their money.
“(The statistics) came from an organisation that provides a budgeting tool, so you’re dealing with a sample of people who are in poor financial mismanagement anyway,” Ms Hume said. “I think it was terribly misleading and unnecessarily – dare I say, political – use of information about a really important and effective scheme.”
The legislated increase in the superannuation guarantee to 12 per cent will also go ahead on 1 July 2021 despite potentially sweeping industrial relations reforms under the government’s JobMaker scheme.
“It has always been the government’s intention to increase the superannuation guarantee, and we haven’t deviated from that intention or that message,” Ms Hume said. “That said, I would not be surprised if we get a lot of pushback when that goes ahead next year – particularly from the business community, who [understands] that there is a limited amount of money out there to pay employees, and when you increase the superannuation guarantee something has to give.”
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