Early access undermines super's purpose: Mulino

Assistant treasurer Daniel Mulino took an aim at plans by the opposition to let Australians dip into their super early, stating weakening preservation would undermine intergenerational protections and hurt the most vulnerable.

Speaking at the Financial Services Council (FSC) Retirement Summit, Mulino said Australia's spending on the Age Pension as a share of gross domestic product (GDP) was projected to remain "roughly flat, or even in some scenario, slightly declining".

Mulino said there is the opposite effect happening around much of the advanced world, where pension spending was already high and "rising very rapidly", and in some countries unsustainably.

"If we undermine preservation, there is a risk that once you start going down that path, it risks fundamentally undermining the role that it plays in that intergenerational protection," he said.

"Moreover, my sense is that once you start weakening preservation, depending on how you do it, but often in practice, it tends to hurt the most vulnerable."

Mulino added he did not support having people access their super during the pandemic as it was disproportionately taken out by low-income and low-balance people, having a huge impact on their future balances.

He said cost-of-living and housing pressures faced by Australians needs a targeted response rather than falling back on super savings.

"The preservation debate, whether it be in different ways in housing, whether it be in different ways to support people with their daily spending, it's manifested itself in a range of policy ideas," Mulino said.

"This is something that we need to push back on and say we need to solve these other problems through targeted policies at addressing those problems and not try to use super to deal with things like people's cost-of-living pressures or housing issues."

In a world where people are facing very pronounced cost of living pressures, Mulino said, it is important to go back to the core purposes of super and remake that argument.

"I think people in the community are very sympathetic to that argument. They get the argument, and there's a lot of support for that. So I think the first stage for me is to remake the argument as to why super is there and why preservation is important," he said.