The Superannuation battle has now been ignited politically. 

Reaction to the “cost of living” crisis and housing unaffordability has led some to question whether Superannuation has been a successful policy. While we shouldn’t be surprised by the incomprehensible arguments being made to remove the compulsory nature of Superannuation (or allow early access) to spark a populist uprising, this is a highly concerning turn of events. 

Not only are these arguments devoid of evidence and dismissive of future financial risk, but they also highlight the decline in the calibre of public discourse coming from our elected representatives. The notion that Superannuation has failed as a policy, and that taxpayers are no better off, is factually incorrect — and it should not go unchallenged. 

Here are the facts: 

• Australia’s public pension spending is 2.3 per cent of GDP, down from 2.8 per cent in 1994–95, despite the population ageing over that period.

• The OECD average is around 9 per cent, and Italy and Greece spend roughly 16 per cent. 

• Treasury projects Age Pension spending will fall from 2.3 to 2.0 per cent of GDP over the next 40 years, even as the population aged 65 and over grows substantially.

• Average pension spending in other OECD countries, by contrast, is expected to increase. 

• The proportion of Australians aged 65 to 69 receiving the Age Pension has declined by 34 per cent since 2012. The proportion of the population aged 65 and over receiving the Age Pension has fallen by 12 per cent over the same period.

• Over that time, the retirement‑age population grew by almost 50 per cent. 

• Compulsory super has generated more than $1 trillion in household savings that would not otherwise exist, lifting national saving by around 3 per cent of GDP on Treasury’s estimate and reducing Australia’s reliance on foreign capital.

• Around half of the system’s $4.4 trillion is invested locally, including roughly $118 billion in Australian infrastructure. 

• Super has contributed to national productivity growth while Australians have reaped the benefits of owning a share of the economy through their investments.

• Super investment has lifted productivity by around 2 per cent, with the average full‑time worker now receiving a productivity dividend of around $2,500 in pre‑tax wages every year, alongside average super returns of over 9 per cent across the last four years. 

Housing prices and living expenses have nothing to do with Superannuation, so why has scrutiny been directed at Super when genuine ideas are needed to solve serious structural problems? 

The hope from desperate politicians is that people may be tempted by the idea of increasing their take‑home pay by 12 per cent instead of having it contributed to Superannuation. But this additional cash in the economy would fuel inflation almost immediately and be wiped out through higher consumption costs, higher interest rates, and higher mortgage repayments. We cannot produce more goods and services simply because more cash is circulating — we would only have more money chasing the same supply of goods and services. 

It is not only the current facts that matter, but the future ones that must be defended. 

• The Superannuation Guarantee only reached 12 per cent in July last year. Almost nobody retiring today has had a full working life at that rate. Judging the system on the balances of people who spent most of their careers at 9 per cent or less tells us very little about the system we have now. 

• Modelling shows a 30‑year‑old on the median wage with $30,000 in super today will retire with $610,000. The full extent of the budget savings that come from this much higher level of financial independence in retirement is still ahead of us. 

The argument against compulsory Superannuation is a smokescreen — a distraction from Australia’s declining productivity and its reliance on immigration to continually prop up GDP. This is the larger problem that needs to be addressed, but it has no simple solutions, hence the diversion. We must demand more from our elected officials, who are putting forward intellectually feeble arguments that are not only misguided but misleading and dangerous.

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