The financial commentator known as the Barefoot Investor, Scott Pape, has strongly criticized One Nation's proposal to allow Australians to access a portion of their superannuation funds early. Pape argues that such a policy would jeopardize long-term retirement security for individuals and could lead to broader economic instability.
One Nation's plan, unveiled on Monday, would permit renters and mortgage holders to withdraw up to three percent of their future superannuation as wages for a period of up to three years. For a couple earning a combined $168,000 annually, this could mean an additional $4,300 per year after tax, or $82 per week. An individual earning $90,500 would receive approximately $2,300 extra annually, or $44 per week.
Pape emphasized that this proposal differs significantly from existing provisions for early super access, which are typically reserved for limited, emergency circumstances. He shared an anecdote about a woman who regretted using her super for cosmetic surgery during the COVID-19 pandemic, highlighting how easily immediate spending desires can override long-term financial planning.
"Her retirement money was gone, and it was never going to compound again," Pape stated, illustrating the irreversible nature of such withdrawals on future retirement savings.
While Pape acknowledged agreement with One Nation on certain superannuation issues, such as high management fees and the need for government non-interference, he fundamentally opposed the early access component. He expressed concern that allowing voluntary reductions in super contributions could encourage prioritizing immediate financial needs over future stability. "This new policy is a different beast. It is not a last-resort rule for people on their knees," he wrote.
Pape also cautioned about potential macroeconomic effects. He suggested that increased consumer spending from early withdrawals could drive up prices, potentially leading the Reserve Bank to raise interest rates, thereby increasing mortgage costs for homeowners.
He further pointed to comments from One Nation MP Barnaby Joyce, who, when asked about the long-term retirement impacts of the proposal, responded, "I'm the Treasury spokesman, not Jesus Christ." Pape viewed this remark as an indicator that supporters of the policy had not fully considered its ramifications.
The policy has also faced strong opposition from the Albanese Government. Treasurer Jim Chalmers described the plan as "crazy" in a speech to the Super Members Council, citing modeling that suggests every dollar withdrawn by a 25-year-old could result in a loss of approximately $3 by retirement. He warned that such policies risk undermining the superannuation system and would ultimately leave millions of workers poorer.
Pape, however, did concur with certain One Nation sentiments regarding superannuation, particularly concerning the level of management fees and the principle of government non-interference. "I actually agree with One Nation on a couple of things when it comes to super. The fees we pay are way too high," he noted. He also asserted that individuals should retain control over their retirement savings and urged Prime Minister Anthony Albanese to avoid intervening with these funds. "Anthony Albanese needs to keep his mitts off our super. It is not the government's money. It's ours."
