Liberal senator defends early access to super scheme

Not in the business of telling you how to spend your own money: senator.

liberal senator jane hume talking in parliament

Liberal Senator Jane Hume says it’s not up to the government to tell you how to spend your money, even if it’s funds from the early access to super scheme set up to help you through the COVID-19 crisis.

The scheme, which allows Australians facing financial hardship to access to a maximum $10,000 a year for two years from their super accounts, has come under fire after a report revealed some members had used the money for discretionary spending.  

AlphaBeta Australia analysis of debit and credit card data of 13,000 people who withdrew an average of $8000 under the scheme showed that more than 60 per cent of spending was on discretionary items such as clothes, furniture, restaurants, cars and alcohol.

More than one in 10 people used the money to gamble.

Around 40 per cent of those who accessed their super early had recorded no drop in income.

Andrew Charlton, director at AlphaBeta Australia, claims the government’s scheme was flawed and the data showed that people were abusing the scheme designed to provide a lifeline for those struggling to pay essential bills.

Instead, he said, opportunistic people were destroying their retirement savings without realising the long-term cost of their decisions.

He claimed the scheme was poorly designed and should have tighter eligibility checks and income tests.

Senator Hume, the Assistant Minister for Superannuation, Financial Services and Financial Technology, has defended the controversial scheme, explaining that members can use the money however they see fit.

“The government isn’t in the business of telling people how to spend their own money. We don’t do that,” she said.

“In the same way we still pay a JobSeeker to a person who might spend it on cigarettes and beer.

“If people choose to take their own money and spend it on something that isn’t particularly helpful, that’s their business.”

According to Nest Egg, the senator claims that research showing how much early superannuation was wasted on discretionary spending was misleading and potentially overblown.

“(The statistics) came from an organisation that provides a budgeting tool, so you’re dealing with a sample of people who are in poor financial mismanagement anyway,” she said.

“I think it was terribly misleading and unnecessarily – dare I say, political – use of information about a really important and effective scheme.”

Senator Hume also took aim at super funds claiming that early access to superannuation is creating problems for the industry or will change investment strategies.

“They’ve made a mountain out of a molehill here,” she said.

“The amount that has been taken out for early release is less than 10 per cent of contributions that were made last year.

“There is no way that superannuation funds should have to dramatically adjust their investment strategies to account for such a small amount of money.

“The funds have had no real problems paying out this money.

“APRA identified before we began that it shouldn’t impact the system overall at all.”

The senator also confirmed that legislation increasing the superannuation guarantee to 12 per cent from 1 July 2021 will still go ahead.

“It has always been the government’s intention to increase the superannuation guarantee, and we haven’t deviated from that intention or that message,” she said.

“That said, I would not be surprised if we get a lot of pushback when that goes ahead next year – particularly from the business community, who [understands] that there is a limited amount of money out there to pay employees, and when you increase the superannuation guarantee, something has to give.”

Do you think the government has a right to tell people how to spend the money derived from schemes aimed at helping them get through a crisis?

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    COMMENTS

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    TOR888
    15th Jun 2020
    10:23am
    If this person is running the Government’s super regulations we are in deep trouble..yes go ahead and spend your precious super $ on fags and booze..what a ridiculous comment..the whole purpose of superannuation is to be self funded os closer to it when you retire not to recklessly spend it on self indulgence..
    Rae
    15th Jun 2020
    1:18pm
    But you can spend and receive welfare. Save and live an entire life frugally.

    It doesn't make any sense but that is what this LNP mob have created since 2014.

    Making saving punishable by harsh deeming rules and hardly any yield anyway.
    fish head
    15th Jun 2020
    11:22am
    No, it is NOT the Government's business to tell you how to spend your money but why do you think that blocker of access to Super funds was put there in the first place?Right, to prevent people dipping into their Super accounts ad hoc.Super funds were never meant to be an extra bank account to be drawn on at will. It is specifically for use at the end of a working life to give a worker a small security once wages stop and reduce the outlay from Government coffers. Well, Covid-19 appears to have scuppered THAT idea.
    Janus
    15th Jun 2020
    11:57am
    Typical Liberal. Reduce control, reduce tax, but mainly reduce services. You pay no tax, but you pay for everything you need. If you can't earn enough, "get a better job". Have another cigar, anyone? What if you don't have the skills, the health, the cash, (etc) to afford to pay for your necessities? Die, because we don't want your sort anyway??

    And most of Australia voted them in. You get the government you deserve apparently, but I need to know what I did that was so bad that I deserved this lot.
    Eddy
    15th Jun 2020
    12:39pm
    Yea Minister, of course your government is not in the business of telling people how to spend their money. That's why you are making paying taxation (including GST and fuel and alcohol excises) optional and discontinuing the use of debit cards for social security recipients. As for the superannuation guarantee, that can be optional also if an employer decides the money is better on their balance sheet than in their employees superannuation accounts. Do we need to implement a basic intelligence test before one can nominate for parliament?
    Rae
    15th Jun 2020
    1:21pm
    I'm sure they have IQ tests in the bowels of IPA headquarters and only put up those of 100 or less for election. Failing any history or common sense seems important for pre selection as well.
    Rae
    15th Jun 2020
    1:16pm
    What did they think would happen.

    64% of people spend all their money and then some living the high life beyond their means.

    Usually spending on unnecessary lifestyles and stuff they really don't need.
    Circum
    15th Jun 2020
    9:26pm
    So 64% of people are idiots taking advantage of a poorly thought out policy.The system already had a superannuation access for hardship scheme which had reasonable access conditions.The bottom line is its the superannuants money so they can spend it on whatever they like.The govt policy seems to be to assist the 64% later in life by making a pension easier to get.
    Circum
    15th Jun 2020
    9:26pm
    So 64% of people are idiots taking advantage of a poorly thought out policy.The system already had a superannuation access for hardship scheme which had reasonable access conditions.The bottom line is its the superannuants money so they can spend it on whatever they like.The govt policy seems to be to assist the 64% later in life by making a pension easier to get.
    patti
    15th Jun 2020
    1:53pm
    Let's face it, if people are spending lots of dosh on Booze, Fags and gambling, the government is reaping the benefits from the tax on those items. Why else would bottle shops have been declared "essential services" during the lockdown??? Puhleeeese......
    Mariner
    15th Jun 2020
    3:27pm
    Commonwealth pays the pension and the States reap the benefits on pokies and other gambling taxes. At least tobacco and booze taxes go back to the Commonwealth. Covid-19 recovery by boozing, smoking and gambling. If it works . . .
    skinner
    15th Jun 2020
    8:06pm
    So it's fine to spend all your super on whatever but who'll the complaining the most when these same people claim the full pension as they have no remaining super. The bloody gov!
    skinner
    15th Jun 2020
    8:06pm
    So it's fine to spend all your super on whatever but who'll the complaining the most when these same people claim the full pension as they have no remaining super. The bloody gov!


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