One Nation has outlined its latest idea to tweak the nation’s compulsory superannuation system. In a bid to give workers more flexibility, it wants to allow people to cleave off part of future employer contributions to use on essential payments now.
In what One Nation leader Pauline Hanson described as a potential “pay boost”, it would allow workers to access a quarter of the compulsory 12 per cent super contribution from their employer in the near term. Importantly, it would retain its tax treatment but would need to be spent on rent or mortgage payments, with access limited to a maximum period of three years.
“One Nation will give Australians paying rent or a mortgage the choice to take one quarter of their future super contributions as a tax-advantaged 3 per cent pay boost for up to three years,” she said.
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“Super is currently 12 per cent of your wages. Your employer will still pay the full 12 per cent,” Hanson said in a statement on Monday.
“But if you take the boost, one quarter of this contribution will be paid directly to you by your super fund. And you won’t be slugged with your normal income-tax rate on it either.
“Your money will keep the the same low tax treatment it would have received in super.”
If a worker was to take advantage of such a policy, they would still have 9 per cent contributions heading into their super fund, which was the level of the full compulsory employer contribution in 2013.
The rate was increased to 10 per cent in 2021 and rose to 12 per cent in July last year. Labor has vowed not to increase it further.
Both One Nation and the Coalition have taken aim at parts of the compulsory superannuation system in its current form, pointing to high overall fees enjoyed by funds who manage the trillions in assets in the sector and arguing that Australians should have more say over their money when facing financial pressures in the immediate term.
“This gives them the choice to have more of their own money now, when they need it, not decades from now,” Hanson said.
Australians can access super early under hardship provisions and to use for emergency medical procedures, but they lose the tax advantage when pulling it out.
For a full-time worker on a salary of $90,500, the policy would provide them about an extra $2,300 a year after tax, or about $44 a week towards their expenses.