“This would be a much needed boost to a dissolving economy and just as importantly give a lift to consumer and business confidence.”
However, a spokesman for the Treasurer said this was not a policy that is being considered by the government. It has also been rejected by the superannuation industry as ineffective and short-sighted.
Dr Martin Fahy, the chief executive of the Association of Superannuation Funds of Australia, said safeguarding contributions to funds was necessary to ensure the $3 trillion sector could recapitalise the economy once the crisis passes, like it did after the global financial crisis.
“As we come across this bridge, funds will need to play an important role in the equity raising which will be an important part of [rebuilding the economy]. Obviously having a robust [superannuation guarantee] contribution coming into funds will be important,” he said.
Dr Fahy also pointed to the “huge” level of government stimulus that is “yet to hit individuals pockets”.
“We need to let the measures that have been announced have an impact. Let’s see what they achieve first,” he said.
Media Super chief executive Graeme Russell agreed the idea would be a short-sighted overreaction, and said we should “keep the economy going as best we can”.
“While there might be 15 to 20 per cent of people unemployed or underemployed, there are a whole lot of people still in work and a number of businesses still going.
“I can’t see why you would further disrupt economic processes,” Mr Russell said.
“When the recovery comes, it’s going to need capital investment. Where’s the source of capital investment in this country? The $3 trillion in superannuation funds is a good start.”
Sources with knowledge of the superannuation system, who asked to be kept anonymous as the topic is sensitive, have warned that the idea could lead to greater concerns about liquidity for the funds. This has been a major concern amid the recently announced early-access scheme that allows struggling workers to withdraw up to $20,000 of their superannuation.
Grattan Institute household finances program director Brendan Coates said moving to a period of voluntary payments was “not something we would support”.
“It would be imprudent to unwind compulsory superannuation during the COVID-19 crisis,” he said.
The think tank has argued against a legislated increase in the superannuation guarantee levy, saying the current level is appropriate, but said the early-release scheme now available to those facing hardship was adequate.
He said there was scope to allow people to withdraw more funds from their super early if the $20,000 was not enough.
“[The government] should consider this in about three to six months.”
However, Mr Coates said the coronavirus crisis would raise more doubts about a legislated increase in super payments at a time when people needed the income now rather than in the future, following the think tank’s research showing a trade-off between wages and super.
“If it is a prolonged downturn this does further weaken the case for an increase in the guarantee.”
Liberal Senator Andrew Bragg said the measures around the early access to superannuation, which kicks in on April 20, were “appropriate” in their current form.
Shadow Assistant Treasurer Stephen Jones said the suggestion was “unhelpful” and created further instability for the sector.
“If funds have to start hedging for dramatic policy shifts like this there will be far reaching impacts. We need superannuation to be part of the recovery.”
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Jennifer Duke is an economics correspondent for The Sydney Morning Herald and The Age, based at Parliament House in Canberra.
Charlotte is a reporter for The Age.