Superannuation policy needs to start focusing on the majority of Australians rather than the behaviour of "a handful of millionaires" or very low earners, the head of the Financial Services Council says.
As the head of one of Australia's largest super funds warned that allowing first home buyers to dip into retirement savings was a long-term risk, FSC chief executive Sally Loane said superannuation rules should focus on the needs of the middle 80 per cent of Australians rather than those at the furthest ends of the income scale.
"People at the bottom will always need to be helped out by the pension system and people at the top will always be able to look after themselves, so when you look at superannuation you really should be looking at that big bulk of middle Australia," Ms Loane said at the Australian Securities and Investments Commission's annual forum in Sydney on Tuesday.
"I think we get dragged around by people looking too much at the top - at the very small handful of millionaires - and the bottom as well, people who are always going to be supported by a good safety net in this country."
Ms Loane said the work needed to address imbalances at the top end of the system had been done.
She backed last year's move by the government to slash the annual limit on non-concessional super contributions from $180,000 to $100,000, and to limit after-tax contributions to individuals with a balance of under $1.6 million.
"Super never has been and never should be a vehicle for intergenerational wealth transfer," Ms Loane said.
Liberal MP John Alexander, who chaired a parliamentary committee into housing affordability, recently let slip the federal government was considering a proposal to allow first home buyers to tap their superannuation for a deposit.
Former Labor prime minister Paul Keating slammed the idea and Treasurer Scott Morrison denied it was being considered.
First State Super chief executive Michael Dwyer told the forum a healthy superannuation balance was more important than ever for young workers unable to buy a home.
Mr Dwyer said the number of first home buyers had declined from 20 per cent of all owners in 1992 to less than 10 per cent in 2017.
"My generation has access to prime land, inner city property, strong capital growth since 1992 and we have the choice of downsizing ... I will have a roof over my head in my old age, which will protect me financially and help me stay in familiar surroundings and contribute to my emotional wellbeing," Mr Dwyer said.
"Tomorrow's retirees will be in a different position: for them housing is increasingly out of reach, which means they'll need to rely on super or other investments as their primary income for a retirement that will include paying significant rent."