A Liberal Senator’s proposal to make superannuation voluntary has been described as “laughable” by the Opposition.
Senator Andrew Bragg suggested superannuation be made voluntary in his first speech to Parliament this week, arguing that the current super settings make it difficult for lower income earners to afford a home deposit.
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He said super should be voluntary for those earning less than $50,000, and that the current system is favouring banks and funds over Australia’s savers. The optional super system would mean savers could tick a box at tax time to get a superannuation refund.
"I do not believe the system is working for Australians," Bragg told Parliament on Wednesday.
"Super is making home ownership so much harder for lower-income Australians."
Based on research Bragg commissioned from consulting firm Rice Warner, the voluntary system would save the budget $1.8 billion in one year alone.
The Australian Taxpayers’ Alliance (ATA) has also thrown its weight behind Bragg’s suggestion, arguing that compulsory super means some workers miss out on other opportunities to grow their wealth.
“Senator Bragg is correct in questioning whether this system is working the way it was intended to,” said Satya Marar, Director of Policy at the ATA.
“The savings that this model will generate can also be used to fund our pension system so it remains sustainable for those who depend on it.”
However, shadow treasurer Jim Chalmers has today described the proposal as “laughable”.
"It is absolutely laughable that Andrew Bragg and others want to pretend that they're worried about the plight of people of modest means in this country," Chalmers said.
"That's just another excuse for them to continue their usual ideological attack on workers and super and their retirement incomes.
"The usual excuse to undermine and diminish super at every turn."
Bragg’s proposal comes as fellow Liberal politicians Tim Wilson and Craig Kelly consider whether the superannuation guarantee - or the percentage of employees’ pay-packets funnelled into super - should be raised to 12 per cent by 2025.
Instead, the MPs want to consider whether those funds would be better treated as a wage increase.
Researchers at thinktank, the Grattan Institute, have also echoed those calls, warning that Australian savers could end up $30,000 worse-off from the planned increase to super.
However, Finance Minister Mathias Cormann has vetoed any changes to the current superannuation guarantee timetable.
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