Experts divided: Should Australia’s super system be scrapped? 

Australia’s superannuation system: a world-class safety net or a millstone around our necks? That question has ignited a fiery debate among financial experts, politicians, and everyday Australians alike. 

With more than $3.5 trillion tucked away in super funds, it’s no wonder the topic stirs up strong opinions, especially when someone suggests scrapping the whole thing. 

The latest spark came from a heated exchange on SBS’s Insight, where two financial heavyweights went head-to-head over whether Australia would be better off without compulsory super. 

The result? A conversation that’s as complex as your annual super statement, and just as crucial to your future.

Dr Cameron Murray, chief economist at Fresh Economic Thinking, didn’t mince words. He argued that superannuation is ‘heavily skewed’ towards the top 20 per cent of earners—those who would be just fine without it. 

According to Dr Murray, the system does little for low-income people, who often rely on the age pension anyway due to interrupted work histories or family responsibilities. And the rich? Well, they’re already set for a comfortable retirement.

‘It only increases the retirement income of the middle by making them poorer when they are young and poor with a family to support, so they can be richer when they are old and rich with no one to support,’ Dr Murray said. 

He also pointed out a sobering statistic: one in seven men dies before they can even access their super. That’s a lot of hard-earned savings never enjoyed.

Dr Murray’s criticisms don’t stop there. He claims the super industry soaks up enormous economic resources, drawing in some of the country’s top talent to manage what he calls an ‘unnecessary industry’. 

And the rules? If you want to access your super at 60, you must stop working, which he says encourages early retirement and reduces workforce participation.

His radical solution? Let Australians access their super whenever they want, for whatever they want. 

He suggests a transition period during which people could withdraw up to $15,000 annually. After that, super funds would be converted into regular investment funds, losing their tax advantages. 

Income tax rates could be adjusted to account for the shift, and, in his view, there’d be no need to replace super with another system—people would save on their own, and the age pension would continue to keep retirees out of poverty.

On the other side of the ring is Andy Darroch, independent financial adviser and director at Independent Wealth Advice. 

For Darroch, scrapping the super is nothing short of ‘insane’. He calls Australia’s system the ‘envy of the world’, pointing out that it allows ordinary workers—nurses, tradies, and diesel fitters—to retire with substantial nest eggs, sometimes close to a million dollars.

‘Scrapping super would be the single most destructive thing you could do to middle-class Australians,’ Darroch warned. 

He believes it would condemn a significant portion of the population to poverty in retirement, shifting the burden onto taxpayers and the government. 

In his view, super isn’t the cause of Australia’s financial woes, and getting rid of it wouldn’t solve issues like housing affordability or the rising cost of living.

He’s also quick to point out that while super and housing are both major financial concerns, they serve different purposes. 

He argues that using super to solve the housing crisis would only worsen things, potentially driving up prices and leaving retirees with less security later in life.

Are we missing the point?

It’s easy to see why some Australians might look at their super balances and wonder if that money could be better used as a house deposit or to cover rising grocery bills. 

But both experts agree: super isn’t a magic bullet for the cost-of-living crisis. While there are provisions for early access in cases of severe hardship, the system is designed to provide long-term security, not short-term relief.

Dr Murray believes in giving people more control over their money. He argues that most Australians would continue to save for retirement even without compulsory super, and that the age pension already provides a safety net for those who need it most.

If Dr Murray’s vision became reality, your employer’s super contributions would go straight into your bank account, boosting your take-home pay. 

Over a five-year transition, you could withdraw up to $15,000 per year from your existing super, after which the remaining funds would be converted into regular investments. 

Income tax rates would be adjusted to reflect the change, and the age pension would remain the primary safety net for retirees.

But would Australians save enough for retirement on their own? Would the age pension be enough to keep everyone out of poverty? And what about the stability and growth of super funds to the national economy?

A system in need of tweaks, not a demolition?

Even Darroch admits the super system isn’t perfect. There are calls for reform to make it fairer, more transparent, and better suited to the needs of all Australians, not just the wealthy. 

Issues like high fees, lack of engagement, and the gender gap in retirement savings are real concerns that need addressing.

But is scrapping the whole system the answer? Or would targeted reforms—like improving the age pension, reducing fees, and making super more flexible—deliver better outcomes for everyone?

Superannuation is your money, future, and choice—at least, it should be. The debate is over, and we want to hear from you.

Do you think Australia’s superannuation system is working? Have you benefited from compulsory super, or is it holding you back? Would you trust yourself to save for retirement without it, or do you prefer the security of a structured system?

Share your thoughts in the comments below. Let’s keep the conversation going—because every voice counts when it comes to your retirement.

Also read: Terrifying dive ahead? What this superannuation warning means for you