There's a reason why your super is locked up until your 60s

Yes. Adding money to housing by taking it from Super will just further drive up the cost of housing. As well as increasing the future taxpayer-funded cost of pensions.

Without major tax reset (eg universal land / monopoly tax) the only sensible course is public housing investment. Deletion of state transfer cost (stamp duty) would have a small impact - maybe. 
Ask yourself why we struggle to afford housing after centuries of productivity improvement not least dual income households and tell me it is not due to land / monopoly pricing.

I believe some early access to Super would be a good thing. There's no point struggling to live and pay the mortgage through your working life and then being wealthy during your twilight years especially if you become ill and can't enjoy it.
While the compounding of the lost Super is definitely a thing, it should not be ignored that the compounding value of the family home is equally comparable. A good retirement is so much better when a retiree owns their own home regardless of their Super balance.

The 15% tax on both the compulsory contributions and earnings thereon is massively detrimental to the compounding effect on invested funds over a thirty year or other long period of time. It would be much better if compulsory contributions and earnings were tax free with payments at the back end taxed at marginal rates. It would need to be grandfathered of course.

I think this was the way it was originally. But the government decided it could not wait that long to get its hands on some money

ANY proposal that just adds to demand without addressing supply is frankly beyond stupid. Every time a scheme is launched to "help" which gives people more money to bid in a supply constrained market the value evaporates via prices just jumping in proportion to the extra cash bring thrown around. Supply and demand. That's all it boils down to. Want to help people, come up with ideas to increase supply, not increase demand. Ares backwards thinking. Again.

One Nation is just rolling super back to the year 2013 when the SGC percentage was 9% instead of today's 12%. One Nation's policy allows workers to get their 9%, as they did back in 2013, and they get to pay just 15% tax on the other 3% rather than their marginal rate, so they get a tax saving as well. What is not to like about this policy? Every worker will be better off, and every worker will get a choice about what to do with that 3%.

If "the current 12% contribution exceeds what is needed for an adequate retirement income " why are we paying federal public servant a 15% super guarantee.

Make Saving Viable Again.

Tax only real interest. ATO to deduct imaginary (inflationary) savings gain from nominal savings gain.

Allow individuals to choose: Save or Super. Make them competitive.

That's a dud.

"That's a dud.":

Tax free would be better;
'United Arab Emirates & Qatar have zero personal income tax. Interest on multi-currency or local savings accounts is completely tax-free for individual residents.'
'The standard Value Added Tax (VAT) rate in the United Arab Emirates is 5%, which applies to most goods and services across all seven emirates.'

My savings are not part of a pot- they are mine.
12% is necessary not for a secure retirement but to get people of the age pension. It’s ok to have retirees support themselves.
The largest tax savings will always go to those fully utilising the structure- no matter what caps or restrictions are put in place.
The public need certainty if they are to trust the system. Certainty comes from stability.
Members and trustees should remind themselves of the sole purpose test. This is for retirement and not a pressure valve for failed govt planning.

In the 1980’s, my super was cashed out when I changed jobs. I invested that money in the family home. I therefore had a bigger deposit on a bigger house that didn’t need changing every few years as the family grew. Early access to super made a huge difference to the whole family at a crucial time.??

However, it meant starting again with zero super. It took real discipline and sacrifice but with kids off our hands and higher incomes, it was possible to rebuild our super savings for a comfortable retirement. Personal contributions made later in life, when there is cash to spare, is the only way to make up for lost time or lost income, especially for people with broken work patterns.

But since 2012, all governments have capped super contributions to stop people accumulating large, concessionally-taxed balances. As we now have a hefty tax on large super balances, why do we still need to restrict contributions??

I favour giving young people early access to super, to allow them to direct their savings as their needs change. But we must also relax contribution caps to allow them to rebuild their super as finances allow.

The purpose of compulsory super was to provide a long term investment vehicle for individuals and the purpose of those investments was to maximise outcomes for the savers. It was never publicly proposed to be a "pot" for investment in government projects unless they provided a superior return to the saver.

What we have now at 12% is an excise on salary that should at least be questioned in terms of the money trail of associated parties, including political parties and trades unions, that currently benefit from the concept of a "pot". As for question 5 the only outcome that should be considered is the optimisation of a saver's investment. All of the other issues are the direct responsibility of government and require them to do their job properly, not rent-seek on savers.

Why not have a contributions scale less as younger and increasing as you get older when your more in the position to afford the extra contribution, and yes I understand you may loose the benefit of long term compounding but the higher scale at 40 years still gives 20-30 years compounding

It’s all so simple to fix (but politically hard), make it 9% (which is enough) with any extra voluntary…any amount any year. Then make the max in super a set amount allowed at June each year ( yes debate the level…$2, 3 …5m)) with excess forced out. Simple, less stupidity with accountants etc. done

Make no mistake, this government wants access to that money, that's the only reason they're even arguing the point. Any money extracted for a mortgage would more than likely help those people in retirement. The single largest use of super at retirement, is debt reduction on the primary residence.

"The single largest use of super at retirement, is debt reduction on the primary residence." Where do you get that fact from?

Agree, the comment about super being used to pay off the mortgage is total rubbish given that less than 20% of retirees even retire with a mortgage and less than 30% of people aged 50-64 have a mortgage.

Dear Kaye,
Your question #1 is moot - "overburdened bureaucracy" what a crock - they have been increased by 30% under the current government. Plus you forget/disregard the amazing abilities of AI which the current government is
investing heavily in - no uses for this have yet been posited !

Hi Geoff, thanks for joining the conversation. The staffing at Services Australia has been increased under the current government - but that is really to bring the numbers back to somewhere similar to what they were before major cuts under the previous government - so no major increase at all. There are more people retiring, more assessments required, and yes, digital helps, but only to a certain extent. Ask anyone who has worked at Centrelink or currently deals with those who do and there is a backlog of work - or reading the annual report which spells all this out can be illuminating, regards Kaye

Kaye, all of which begs the question if it is time to pay all at retirement age a national pension for it to be clawed back via income tax on all income from those in taxable position, which at least make enormous saving of Govt expenditure on C/Link staff working on pension matters. The savings could be used on Defence instead. With attrition & retirements amongst all C'lth Clerical employees, probably enough jobs in other departments for transfers of C/link staff. Has any Study of which (Govts love Studies) ever been done by any government?
It's ludicrous so many employed on a retirement issue. I have a small UK pension where all get a national pension, 1 form was completed by me and 1 reply letter stating the amount which is the ONLY letter or contact in 18 years.

The average Australian does not save enough and what they do save is typically generously complemented by an associated whack of money into a mortgage interest amount in the hundreds of thousands of dollars over the life of a home loan. Property is expensive to enter, maintain and exit. So it's not the best investment other than the leverage banks allow us.

Human behaviour shows that the average person won't consistently save 12% without some difficultly and contrasting priorities. So it just won't be there for future. They also won't stick to a long term investment strategy - again, on average.

1. Keep Super as is - make it far less complicated, more transparent on where the investments go and keep current contribution rates and tax treatment in retirement.
2. Make PPR mortgage interest tax deductible to a certain amount to offset the unavailability of that super cashflow. Everyone gets the same level of deductibility. Arbitrarily, let's say it is $3000 per month. That will help people service their mortgage and when they get their tax return, they will most likely spend it in the economy so the government will get some back in GST. But better than investment properties and higher rents.
3. Blow up Private Health. Cap the premiums. And make it tax deductible. And if you pay Private Health, you don't also pay Medicare. This system is more complex than Super. But people are just leaving by the thousands. And cap the number of providers. The tier system is gone too. You cannot compare easily and have to rely on the provider (how conflicted!)

An opportunity was missed during the early stages after the initial introduction of the 3% SG. As the % was increased it should have increased more for people with less time left before retirement who were never going to build enough savings otherwise. The current approach whereby funds can be directed into a Home Saver account (which should be available for any owner occupier purchase, not just first home buyers) partially mirrors this idea. The current 12% SG which some think is excessive if applied throughout one's working life would be appropriate if applied from say 45-50 years of age to counter the earlier loss of accumulation.

The better outcome is to allow superannuation members to withdraw some of the fund to contribute to acquiring their home, but in a manner that a proportion of the Home valueremains an asset of the superannuation fund, and if the Home is sold the capital is returned into the fund.That way the superannuation balance is not reduced, compounding remains and the member has the security of their own home in retirement.

No one has any idea what their super will be worth in 30-40
years' time. They may have died; the market may have crashed, etc etc. At least withdrawals now have certainty and can be put to good use.

Public servants retirement is funded by the Future Fund. This was created by the sale of public assets - Telecom. Private workers retirement is funded by salary sacrifice into superannuation. At 12% across a lifetime very few people will rely on the aged pension. Pension payments are already dropping yet we aren’t seeing a reduction in taxes, quite the opposite. Why one system for the private sector and another for the public sector? Isn’t this corruption?

Not true, Ben. The Future Fund only covers old defined benefit schemes, not the defined contribution schemes that public servants have been in for years (choosing their own fund like everyone else).

As far as I am aware, at the time of writing not one $ of public service pensions has been paid out of Future Fund, it is all coming out of general tax revenue, ie, the Federal Budget. Doing so would surely relieve pressure on the budget?

Ben, Public servants retirement is funded by their own after tax contributions and an employer component. Not too many private sector employees pay after tax super contributions unless they are in the old Corporate schemes. Their super comes from the employer . As for salary sacrifice into super this provides workers with tax concessions because they generally pay 15% tax instead of their marginal rate. In the case of the aged pension, there would not be too many older scheme retired public servants getting much in the way of aged pensions as their pension is often fully taken into account for the aged pension income test. Their pensions are also taxable for income tax purposes, albeit with a tax offset . It is also my understanding that most of the old public servant pensions are funded in part by Government revenue and part from the Future Fund . It was done this way by Costello and subsequent Governments to allow the Fund to mature so it could fund future liabilities. Many current public servants are in defined contribution schemes which are subject to market fluctuations and which are not a liability of the Government or the Future Fund. In effect this is their own income which is deferred until retirement .The old schemes were closed off years ago . As these older scheme retirees and spouses die the Government gets their pension as they are non reversionary beyond the spouse. Not so for private pensions.

There is something that often gets overlooked in this debate. I think Kaye or another contributor may have raised this before, and that is the considerable disadvantages someone not owning a home in retirement have.
I believe this is one of the biggest sleeper issues in part because of the recent changes to aged care funding and fees which have substantially increased the costs for those on part pensions and even self-funded who are not "wealthy" but don't qualify for any age pension.
The changes were designed to help people stay in their home with appropriate assistance which would cost society less than residential care. The idea was that those who could afford it should pay more towards it. Unfortunately, the system we have designed has simply pushed up the cost and created a situation where people end up in residential care earlier than they should ... if they can afford it.
Being "low means" now makes accessing care more difficult with the increases in accommodation costs. At least if you have a home you can tap into the equity as well as having housing security etc.
This is a discussion that must be had. The super system should now be mature enough to have a sensible discussion. Are we though?

In other countries, like Canada, for example, superannuation is govt-controlled.
The Canada Pension Plan (CPP) is a social insurance plan that is funded by the contributions of employees, employers and self-employed people as well as the revenue earned on CPP investments. The CPP covers virtually all employed and self-employed people in Canada, excluding Quebec, which operates its own comprehensive plan, the Quebec Pension Plan. The CPP is the second pillar of Canada’s retirement income system, which also includes the Old Age Security and the Guaranteed Income Supplement (the first pillar) and private savings (the third pillar). The CPP provides income replacement to contributors and their families in the event of retirement, disability or death. The CPP is a statutory program that is governed by the federal government and the provinces. It is enabled by the CPP legislation. Eligibility criteria must be met in order to receive benefits. Superannuation money is NOT treated as YOUR Money and neither should ours. Its purpose is to fund retiremement and, in Australia, to reduce the public burden of the aged pension.
The power of compounding is a fundamental principle in growing wealth and ensuring retirees have a pension which affords a decent retirement not penury.

Jan, in 2nd sentence it says contributions by employees and self-employed, so how can those not be treated as "your money" as you say at the end? The system sounds similar to Australia but it's controlled by Govt rather than an independent super fund. Over the years there have been comments that Australians wouldn't be keen on control of it given to Govt!

Time to broaden the superannuation discussion.
Current facts-super is mandatory, contribution rate is 12%, life expectancy of a 20-25 year-old is around a further 60-65 years, and pension age for super is 60-65.

We can argue about super being mandatory, but first real argument would be about our system, with an upfront 15% contribution tax, and unfair salary-sacrificed contributions. So those two elements, together with the questions of whether the pension should be un-taxed, and whether superannuation balances should be limited to around $2m per person are legitimate and important questions for a full review of super as an election policy.

In the meantime, since there is no justification for a 12% rate, there is no justification for a rate above 9% being mandatory. It should be optionable, recognising it is currently salary-sacrificed, but young people may prefer to save outside super for a house, family, travel or education etc. With a life expectancy of around 75-85 for 20-35 year-olds, there is a lot of time from around age 40 for people to build their superannuation after they have bought a house, raised a family and started to get higher salaries with experience in their jobs.

Labor has blinkered ideology towards super rather than the current reality of lived experience. Realty is that saving for a house with rental, HECS, 12% super, and low salaries is very difficult. Something has to give and housing securement is a much stronger retirement base than a larger super fund, with multiple options for access to super to allow purchase of first residence.

20-25 year-olds are not obsessed about their super in retirement. They are obsessed about the cost-of-living, rental costs and how to get their first house while raising a family, and whether they can afford a family.

I have the real-life lived experience of being able to cash super when changing jobs at age 40. The absolute foundation of our family future security, being then able to go up the property ladder.

Australia’s system has major flaws. I’ve yet to find anyone doing a calculation of the value one would have today from contribution tax paid and compounded if invested until today. Step back to fundamentals and take a hard look at the system-particularly the generosity to highly paid and the need for more than about $2m for retirement. And what it does to deny the aged-pension. It’s ok, it’s worked, but it ain’t great.

John, very well put, expresses thoughts as witness my 31yr old with same thoughts/struggles you outlined. Support $50,000 release of Super to match personal savings $40,000 so even singles can get on the rung lower end of market eg. if a capital city & below threshold for no stamp duty first home buyers, thus $75,000 all to deposit no matter if above 10% and 15,000 for legals, insurance, paint & carpet job. Won't be palace but a good start, mine was cute, old, wonky Queenslander. By time reach both figures in these times will have good credit record paying high rent, proving same time can afford loan repayment (in most cases re salary).
But also support $50,000 recontribution as & when with15% Contr tax. Don't see this as 'double tax' as had use of the money, perhaps on sliding scale depending on speed of repayment.
Many excellent suggestions in this column, perhaps the best could be taken to come up with excellent alternative.

Lyn, two additional thoughts. Firstly, the Keating approach was that people were too stupid to manage their own lives and needed to be herded. To the extent that may have been true, it is almost certainly less true today given the extent of young people getting further educated, so that even if still stupid, they have stronger opinions and question mandatory contributions. The second important feature is that a much higher percentage of couples today are finding as they approach their mid-forties and later that they are unable to afford their first residence from their savings outside super. There is a strong argument to allow either access to super or to allow investment in a first residence within super. Owning a residence and saving rent is a stronger basis for security than larger super.

John, agree. L