Coalition MPs push Peter Dutton on superannuation reform

Peter Dutton will face pressure from Coalition MPs to implement wide-ranging reforms to the nation’s retirement savings system if he becomes prime minister.

Nationals senator Matt Canavan says the Coalition should ‘look at giving people more control of their super, which is their money’. Picture: Dan Peled / NewsWire

Peter Dutton will face pressure from Coalition MPs to ­implement wide-ranging reforms to the nation’s retirement savings system if he becomes prime minister.

Backbenchers have voiced support for lowering the superannuation guarantee to 9 per cent, allowing workers to pocket retirement payments if they are going through financial distress, and providing more flexibility for Australians to raid their savings before they turn 65.

The Australian has spoken to backbenchers and shadow ministers who believe there should be a shake-up of the superannuation sector, with some arguing workers should be allowed to opt out of contributing 12 per cent of their income to their retirement.

While there is little support within the Coalition for the existing superannuation system, senior MPs argued it was unlikely radical reforms would be taken to the election beyond allowing first-home buyers and divorced women to access $50,000 of their savings to buy a property.

The debate within the Coalition comes as Labor goes cold on setting a pathway towards raising the superannuation guarantee to 15 per cent, while the ACTU is vowing to campaign against Mr Dutton’s policy of allowing first-home buyers to access retirement savings.

South Australian Liberal senator Alex Antic said he would “be open to any reform which allows Australian workers more scope to decide what to do with the money they have earned”.

“Regardless of how it is presented, compulsory superannuation contributions mean that Australian workers have no say in how that money is used until they reach 65 years of age,” Senator Antic said.

SA Liberal senator Alex Antic. NSW Picture: NewsWire / Monique Harmer

“That might be buying a first house or reducing debt, but the point remains, it’s their money.

“Large superannuation funds charge billions in fees and use members’ savings for political donations, directors’ fees, and supporting trade unions. This isn’t in the interests of the Australian worker.”

Nationals senator Matt Canavan said the Coalition should “look at giving people more control of their super, which is their money”.

With the superannuation guarantee to rise to 12 per cent in July, Senator Canavan said workers should be able to choose to limit retirement payments to 9 per cent of their salary and receive higher take-home pay.

“New Zealand allows people to opt out of superannuation payments and their system works well,” he said.

“I would have to look in detail at any proposal but perhaps people could opt out of payments above the 9 per cent allocation, which has been only recently increased in defiance of the recommendations from the Henry Review.”

Nationals MP Llew O’Brien agreed with Senator Canavan that workers should be allowed to receive higher take-home pay and limit super contributions to 9 per cent of their base salary.

Mr O’Brien said workers should be able to ask their employers to divert superannuation contributions to their take-home pay while they are going through periods of financial distress.

The Australian Taxation Office allows people to access superannuation early on compassionate grounds but there is not a provision to pause making contributions.

“People who are living on the poverty line should have the ability to pay less super now to get by,” Mr O’Brien said.

“People should be able to apply to not pay the full amount for a period of time.

“A good example is a person who is in a family violence situation … they would need to have more of their own money now in a genuine crisis instead of the government forcing them to put it into superannuation.”

Opposition Treasury spokesman Angus Taylor said the ­Coalition was “committed to the role of super in our retirement system”.

“Australians rightly view super as their money because it is,” Mr Taylor said.

“There are already well-established grounds of compassionate release for super and the Coalition is committed to upholding them.

“The growing size and role of super means it is even more important that we get the policy settings right.

“If superannuation is to keep its social licence, funds must have a relentless focus on the interests of members. The Coalition’s focus for policy reform in our super system will be on good governance, clear price signals, and transparency about the use of members’ funds.”

In an interview with The Australian last week, Anthony Albanese would not commit to setting a pathway for raising the superannuation guarantee to 15 per cent in the next term of government.

Government sources have told The Australian there are “no plans” to further raise the superannuation guarantee, despite a pathway to 15 per cent being in Labor’s platform with the strong support of unions.

ACTU assistant secretary Joseph Mitchell did not respond to questions over the government’s refusal to set a pathway to a 15 per cent super guarantee.

But Mr Mitchell said unions would spend 2025 “reminding workers of the risks to their superannuation from a Dutton government”.

“There is no doubt that the disastrous policy that proposes to allow workers to trade off their super for a house will not make housing more affordable. It’ll mean more expensive homes and poorer retirements,” Mr Mitchell said.

“For the Liberal and National parties have never hidden their disdain for Australia’s superannuation system despite its contribution to our economy and to working people.

“They hate seeing representatives of workers and employers sitting down together to benefit working people and the nation. Given the chance they’d once again undermine an Australian success story.”