One Nation has rejected warnings that its proposal to let millions of Australians access part of their superannuation early would fuel inflation, as the government criticised the plan and questioned whether it had been properly modelled.
The party wants workers who pay rent or a mortgage to divert a quarter of their compulsory superannuation contributions into their take-home pay for up to three years.
Employers would still pay the full 12 per cent superannuation contribution, with super funds then returning 3 per cent to participating workers. One Nation estimates that an employee earning about A$90,500 a year would receive an extra A$44 a week.
Up to seven million people could be eligible under the proposal, although One Nation MP Barnaby Joyce said it was unlikely that every eligible worker would take part.
Mr Joyce dismissed claims that the measure would increase demand and make the cost-of-living crisis worse, arguing that people could leave the money in their bank accounts rather than spend it.
“If there’s extra money in the economy and you put it into your bank account and don’t spend it, it has no inflationary aspect,” he told ABC Radio.
“Now we have to get economists to decide whether you get access to your own money? I mean, who are the people that have to give the imprimatur for you getting your own money?”
Mr Joyce was unable to say whether economic modelling had been completed before the policy was announced. He said One Nation should not have to model people accessing their own money, and rejected the suggestion that workers would sacrifice a strong long-term return for a weaker immediate one without needing the cash.
Assistant Treasurer Daniel Mulino said the proposal amounted to an unwinding of the superannuation system and warned it could leave people with significantly smaller retirement balances.
“What One Nation is actually asking people to do is to steal from their own future in order to boost their incomes now,” he told ABC Radio. “It’s a very irresponsible approach.”
Industry experts have also warned that allowing more money to flow into household budgets could add to inflationary pressure. The Association of Superannuation Funds of Australia described the plan as economically damaging, while economist Warren Hogan said increased spending could ultimately worsen the cost-of-living pressures it was intended to ease.
One Nation leader Pauline Hanson has defended the policy as a way to provide immediate help to people struggling with housing costs. The payments would remain taxed at the concessional superannuation rate of 15 per cent rather than at a worker’s usual marginal income-tax rate.
Mr Joyce said the party believed people were capable of deciding whether early access was worthwhile, while arguing that keeping a roof over someone’s head should take priority over maximising their retirement savings.
Coalition housing spokesman Andrew Bragg said the opposition was not currently pursuing the same proposal, although he indicated that policy discussions around housing and retirement savings remained under way.
He described One Nation’s plan as a possible short-term measure but said the broader challenge was preventing a rise in the number of Australians reaching retirement without owning a home.
