Fake news on super’s early access spend
The attention-grabbing media headline ‘Revealed: Aussies spend early access super on gambling, beauty products’ and the ABC’s (inevitably anti-government) lead item ‘Superannuation withdrawals spent on gambling, alcohol and takeaway food’ are based on a political interpretation of a dodgy private survey that is backed by no official statistics and cannot be fact-checked.
It fits comfortably into a campaign by heavily involved vested interests to denigrate the government’s successful release to Australians of their own superannuation savings of $15 billion so far – and with billions more from next month – aimed at offsetting the economic pressures, particularly on lower-income earners, of the coronavirus pandemic. This ‘research’, in which former prime minister Rudd’s economic advisor Andrew Charlton is a key player, purports to show that this early release superannuation money was ‘wasted on discretionary spending – on lifestyle rather than the lifeline for which it was intended’.
In dismissing the claim that almost two-thirds of superannuation withdrawals ‘went on discretionary items such as clothing, furniture, restaurant food, gambling and alcohol’, Superannuation Minister Senator Jane Hume described it as misleading, overblown and political. And even if there were instances of non-essential spending, Hume went on to defend the right of those making the withdrawals to spend as they wished. ‘The government is not in the business of telling people how to spend what really is their own money just as people are free to spend their JobSeeker payments on beer and cigarettes.’
In any event, what makes up ‘discretionary spending’ is in the eye of the beholder; on the survey’s own questionable figures, what many would regard as essential payments (food, rent, services, fuel, clothing, paying debts) make up more than two-thirds of the listed spending.
But how kosher is this research anyway? It is claimed to emerge from a survey of 13,000 (or about 0.65 per cent) of the two million Australians who had accessed the scheme by early this month. And it details not how the average withdrawal of around $7,475 is being spent, but deals only on what it estimates to be the extra spending of $2,855 on average in the fortnight after receiving the withdrawals compared to previous fortnights. But this one-off, less-than-one-per cent sample survey of a fortnight’s spending pattern is presented as if representing the likely outcome of a scheme that is forecast to total up to $27 billion – less than one per cent of the $3,000 billion held in superannuation.
While Dr Charlton acknowledges that this spending ‘would certainly have helped the economy’ (the May record recovery in retail sales offset April’s worst-ever drop), he warned that a hefty price will be paid through lower retirement incomes. ‘Opportunistic people are destroying their retirement savings without realising the long-term costs of their decision.’ But with so much disagreement about the real present value of cash as against its value 40-or-so years in the future, there is increasing questioning of the mantra that compulsory superannuation is a social good. Instead of forcing young Australians into superannuation funds, wouldn’t that money be better directed in the national interest towards home ownership? In any event, a major brawl on super is brewing, with Coalition backbenchers currently defying the PM by demanding the cancellation of next year’s legislated move towards lifting this employer-paid levy from 9.5 per cent 12 per cent, claiming it would cost jobs and hold back wages as hard-pressed businesses struggled out of the CV-19 recession.
The perils of having anything to do with a super fund dominated by the CFMEU have been revived just six years after a scandal in which the names, addresses and phone numbers of Cbus fund members were leaked to the union, ostensibly in a dispute with an employer over unpaid superannuation. A few weeks ago, Cbus emailed fund members that from July 1, unless they ‘opt out’ it will provide their ‘limited’ personal information (name, superannuation details and employer’s name) to the union ‘to enable a union delegate or representative to check the status of your super contributions to assist in identifying and recovering unpaid super’. But more than 600,000 of the 759,000 members of the Cbus super fund do not belong to the CFMEU (many will not be members of any union) and unless they take prompt action to ‘opt out’, the union will soon know where these 600,000 work; a useful contact list for such a militant union – but a worrying one for Cbus super members.
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