The federal government and opposition are at loggerheads over when Australians should be allowed to access their superannuation.
Following the government’s decision to raise the age at which retired Australians will be able to receive the age pension, Treasurer Joe Hockey said on Monday changes to the super preservation age is “on [his] mind and on Tony Abbott’s mind”.
However, Opposition Leader Bill Shorten has vowed to vote against any changes to the superannuation preservation age, reports Fairfax.
“Where does Joe Hockey get off saying to Australians, nine million Australians with superannuation, ‘I am going to make you wait until you get your money’,” said Shorten.
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“First of all he wants pensioners to pay more, secondly he wants people to work until 70. But on superannuation, it’s not even the government’s money,” he said.
Under current arrangements, Australians born before June 30, 1960 can dip into their super savings at the age of 55, while those born between July 1, 1960 and June 30, 1964 can gain access between the ages of 56 and 59. The preservation age for Australians born after July 1, 1964 is 60.
As previously reported by SmartCompany, the government wants to lift the pension age to 70 from 2035. The previous Labor government legislated to life the pension age from 65 to 67 by 2023.
While the government has said there will be “no adverse changes” to superannuation in its first term, Fairfax reports it will take any proposed changes to the next federal election, scheduled for 2016.
“I think it’s something that we need to have a proper process to discuss with all the affected stakeholders,” said Hockey.
“We’re thinking about how we’re going to make sure that the quality of life for Australians into the future is sustainable,” he said.
Martin Parkinson, the outgoing Treasury secretary, backed up the government in his post-budget speech on Tuesday, telling the audience at an Australian Business Economists event that a change in the preservation age is “inevitable”.
While Parkinson did not specify the age at which he thinks retirees should gain access to their savings, he called for a more “sensible” debate on superannuation.
Michael Davison, senior policy adviser at CPA Australia, told SmartCompany while CPA Australia sees “merit in ensuring that the preservation age remains aligned to the pension age”, it is important there are provisions for people to access their super sooner “if their personal circumstances make waiting impossible”.
“But before we start ruling options in or out, we also think it is vital to articulate a long-term vision for our retirement savings policy which clearly spells out its purpose and goals and ensure, as compulsory super matures, that the age pension shifts back from supplementing retirement savings to being a genuine safety net,” said Davison.
“That means developing a retirement income stream culture that encourages income streams and discourages lump sums. We do accumulation well, we don’t do decumulation well at all,” he said.
The Australian Institute for Superannuation Trustees has previously backed calls by the National Commission of Audit to tie the preservation age to the pension age, but warned the government against making “piecemeal changes” to retirement income policies.
“When it comes to fair and sustainable retirement policy, we need to think about all the policy levers that can be adjusted, not just one or two,” said chief executive Tom Garcia.
Garcia said many Australians are forced out of work early and do not get to choose when they retire.
“Policies are meant to improve people’s lives so any changes affecting access or eligibility to the age pension or superannuation shouldn’t be about punishing disadvantages and vulnerable Australians,” he said.