The Retirement Income Review must consider how rising food, energy, health and aged care prices will hit retirees’ hip pockets, the Association of Superannuation Funds of Australia (ASFA) believes.
In a submission to the review, ASFA said the review needed to take the lived experience of retirement into consideration to achieve a credible and conclusive fact base.
ASFA chief executive, Dr Martin Fahy, said: “The review must consider the facts about how rising food and energy prices hit retirees hip pockets, the facts of provisioning for burgeoning health and aged care expenses and the facts about how much it costs to live a financially secure, decent life in retirement.
“That’s the real retirement fact base and that’s what Australians need the panel to assess. Anything less risks ongoing policy instability and uncertainty.”
ASFA noted the review needed to look beyond fiscal and budgetary implications and tackle the issue of retirement income adequacy.
“We know that the fiscal cost of the system compared to international counterparts is very low and sustainable over the long term – the data is clear on that,” Fahy said.
The focus should be on what the system delivers and how we bridge the gaps, particularly for low income earners, so that all Australians can live a decent retirement. That is the end game here and it makes sense that it should be a core focus area for the review.”
Fahy noted that increasing the superannuation guarantee (SG) to 12% did not represent an extravagant standard of living for retirees.
ASFA said the industry needed removed the $450 per month earnings threshold, add SG to paid parental leave and maintaining the low-income super tax offset.
“It’s about getting 50% of Australians to around 70% of average weekly earnings by 2050,” he said.
“Australians know what their superannuation is for – it is there to deliver a dignified standard of living that respects the contribution retirees have made to the nation across their working lives and affords them the respect they deserve in a country like ours.
“This should be embedded at the heart of the system to end the constant change and tinkering to meet annual Budget imperatives.”