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Intergenerational Report shows every taxpayer will foot the bill from policies to turn super into an ATM

Super Members Council

The Super Members Council says today's Intergenerational Report confirms super is helping more Australians fund their retirement and reducing the burden on taxpayers to support an ageing population – highlighting why policies that treat super like an ATM would make Australians poorer.

The report projects spending on the Age Pension will fall from 2.3 per cent of GDP today to 1.8 per cent by 2066, while the proportion of people above pension age relying on government income support is projected to fall from 66 per cent to 52 per cent.

Compellingly, these projections come even as the number of Australians above Age Pension age is expected to double to around nine million.

By comparison, the GDP pension burden in other OECD economies is estimated to be 10 per cent in the United Kingdom, 8 per cent in Canada, 7 per cent in New Zealand, and 6 per cent in the United States.

"Australia is getting older, but thanks to super, our Age Pension costs are projected to fall rather than rise. That's an extraordinary achievement and something very few countries can match,” says the Council’s CEO Misha Schubert.

Since the last Intergenerational Report in 2023, the Super Guarantee has risen from 11% to 12%. The Council’s modelling shows the 0.5 percentage point increase last year alone could see a typical 30‑year-old retire with $22,000 more in super. Taken together with the full increase from 9% to 12% over the past decade, it could add up to $132,000 in extra superannuation savings by retirement.

The report should also serve as a warning against any policy proposals that weaken super by allowing Australians to withdraw their retirement savings early and lose decades of compound returns.

The Council’s modelling shows One Nation's proposal to allow workers to divert one quarter of their employer's compulsory super contributions into current spending would leave a median full-time worker around $25,000 worse off in retirement after just three years, while forcing taxpayers to fund an additional $14,000 in Age Pension costs over the lifetime of a median worker who used the proposal.

“Any policies that allow Australians to raid their super will make Australians poorer and fuel inflation, quickly wiping out the value of any super you withdraw. It will also leave taxpayers on the hook for up to double the amount of super that’s taken out,” add Ms. Schubert.

“It’s a double whammy - stoking inflation with early super withdrawals would make cost-of-living pressures even worse for battling Australians – and the bigger bill to taxpayers would mean less money to fund services battling households rely on – hospitals, medicines, schools, roads, and drought and flood relief.” 

Costs of One Nation policy

Scenario	Example	Cash taken	Impact on super balance at retirement	Extra age pension cost to taxpayers	For each dollar of super taken now taxpayers must fund an extra…
		(after 15% tax)
3-year opt-out	Minimum wage worker, $52,255	$3,998	-$14,000	$10,000	$2.50 pension
	Median full-time worker, $90,500	$6,923	-$25,000	$14,000	$2.02 pension
	Individual, $120,000	$9,180	-$33,000	$13,000	$1.42 pension
	Family, $104,510 combined	$7,995	-$29,000	$21,000	$2.63 pension
	Family, $168,000 combined	$12,852	-$46,000	$22,000	$1.71 pension
	Family, $240,000 combined	$18,360	-$66,000	$19,000	$1.03 pension

Source: SMC Cameo Model. Note all dollars are deflated to 2026 by 3.7% p.a wages growth consistent with the 2023 Intergenerational Report (IGR). High income households are less affected by the age pension means test which give rise to extra pension costs. Cameo of a 25 year old today.

 

ENDS

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