Superannuation is the “main game in town” and any claims that other financial assets can do the “heavy lifting” in retirement need to be rejected, says Association of Superannuation Funds of Australia CEO Dr Martin Fahy.
“ASFA strongly refutes any alternative facts about the significance of super,” he said, seemingly the latest volley in a disagreement with the Grattan Institute.
Dr Fahy said that for more than 90% of households superannuation combined with owner-occupied housing were the dominant form of saving to support retirement.
“Another key fact under attack by some commentators is that super already makes a substantive difference to the retirement incomes of low-income earners,” he said.
“Even low balances under the assets test threshold can lead to significant increases in income. The suggestion that super doesn’t assist low-income earners is a nonsense.”
“Super is working to provide more and more Australians with a dignified retirement as the system matures. We shouldn’t sell out future generations of retirees by swapping our aspirations for superannuation for short term fiscal imperatives.”
The Grattan Institute has been supportive of the Government’s proposed objective for superannuation, which has the age pension at its core. The Institute says that boosting retirement savings comes with a cost, and that “Age Pension and Rent Assistance are better tools than super to provide an adequate retirement for those on low incomes”.
In January Dr Fahy said that the Grattan Institute’s focus on the age pension over superannuation was “patronising and represented poor public policy”.
Yesterday Dr Fahy pointed to recent ABS statistics that show that, apart from a home, bank accounts and motor vehicles, superannuation is the most commonly held asset by households with a household head between the ages of 15 and 64.
“Other financial assets, apart from owner-occupied property, are held by only by a relatively small proportion of households,” he said.
“Only one in five households has an investment property and only one in 30 households has an interest in a public or private trust.”
“Analysis of wealth distribution using mean or average data instead of an approach based on the median or typical Australian is breathtaking in its lack of analytical rigour.”
“James Packer’s and Harry Triguboff’s wealth when averaged across the population does not assist others in achieving their retirement income goals,” Dr Fahy said.