Coronavirus: Super splurge as Australians siphon retirement savings

ANZ economist Cherelle Murphy says there is a link between the weakest economies and the number of people accessing their super early.

More Queenslanders than Vic­torians have accessed their superannuation early under one of the Morrison government’s key corona­virus support measures, and West Australians are withdrawing the largest amounts.

Australian Taxation Office data obtained by The Australian shows that 565,900 people in NSW withdrew $4.6bn of their super using the scheme between March 22 and May 31, compared with 478,200 Queenslanders, who accessed $4bn, and 422,000 Vic­torians, who took $3.4bn. In the Northern Territory, 10.9 per cent of the population used the early release of super scheme, designed to help people facing fin­ancial hardship from the pandemic, and 9.4 per cent of Queenslanders have withdrawn funds.

ANZ economist Cherelle Murphy said there was a link between the weakest economies and the number of people accessing their super early. “This suggests that the strongest economy, the ACT, is the one where people are accessing super least.

“At the other end of the scale, state final demand in the NT fell 1.2 per cent in the March quarter, where people have been accessing their superannuation the most

“Also in Queensland, where super has been accessed by a relatively high 9.4 per cent of the population, the economy contracted by 0.3 per cent.

“The correlation is not exact. For example, in NSW, where the economy contracted 1.5 per cent in the March quarter, 7 per cent of the population accessed their super, so there are other factors influencing the moves,” Ms Murphy said.

West Australians were requesting the largest amounts with average lump sums of $8487 while those in Victoria took out the smallest amounts at $8000. Under the scheme, people can ­access $10,000 of their super this financial year and $10,000 between July and September.

Close to 1.9 million Australians have withdrawn about $15.3bn from the nation’s near $3 trillion superannuation pool since the ­implementation of the program. The state-by-state snapshot came as the country’s top superannuation regulator said it would not pursue legal action against funds that were slow to pay out early release of super requests.

The Australian Prudential Regulation Authority told a house economic committee on Wednesday that it could not legally enforce the five-day payment period it recommended to funds.

The Australian understands no specific legal clause around funds needing to pay in a certain amount of business days was implemented in the design of the scheme.

APRA relies on funds to make payments as soon as practicable.

Many retail wealth funds have been condemned for not dishing out funds in the allocated time, including Qantas Superannuation and Future Super Fund.

As of May 24, Future Super Fund had paid only 46.3 per cent of requests within five business days.

APRA deputy chair John Lonsdale told the committee, headed by Liberal MP Tim Wilson, that the regulator did not have concerns about funds not making payment in time. “We are asking funds to release the appropriate funding as early as possible,” he said.

It is understood APRA is contacting funds that have a high percentage of delayed payments.

There have been 212,800 West Australians accessing $1.8bn of their super since late March and 98,200 South Australians taking $820m. In Tasmania, $290m was withdrawn by 35,300 people and $215m was accessed by 26,700 NT residents. Just 17,400 Canberrans used the scheme, taking $140m.

The uptake of the scheme comes with growing evidence Australians are accessing their super to fund spending on non-­essentials such as gambling, or putting it into their savings.