Is Australia saving too much for retirement?

When Paul Keating addressed federal parliament the day after Australia’s compulsory superannuation system was born in June 1992, the message was simple.

“For the first time … ordinary Australians will be able to build a decent nest egg for their retirement,” said the then-Prime Minister.

“People now on average weekly earnings will be able to retire on an income twice the old-age pension ... with the passage of the legislation last night, a decent level of superannuation provision becomes the right and expectation of every Australian employee.”

Super has since become a financial behemoth . Australians’ collective tally of $4.8 trillion is the world’s fourth-biggest pool of private retirement savings, and it could rise to second place during the next decade.

But as voters grapple with a housing affordability crisis and the worst cost of living crunch in living memory, Keating’s vision for superannuation is increasingly contested.

The sheer scale of the super pile has made it an irresistible political target.

At the past two federal elections the Coalition has proposed using super to address the housing crisis ; it promised home buyers would be allowed to withdraw a portion of their superannuation and put it towards a home deposit.

Shadow housing minister Andrew Bragg, trenchant critic of compulsory superannuation, has indicated the Coalition is again considering policy options to allow early access to super , including using it as collateral for a mortgage.

Pauline Hanson wants to use super to ease cost of living pressures. Last month she announced a One Nation government would allow renters and home borrowers to withdraw up to one-quarter of their regular superannuation contributions for up to three years.

For Labor, Australia’s superannuation system has become an article of faith. It claims One Nation and Coalition will destroy the universal character of the scheme.

Treasurer Jim Chalmers has even framed the next election as, in part, “a referendum on super”.

So Labor, the Coalition and One Nation are now locked in three-way political combat over the future direction of retirement savings policy.

Dr Ben Spies-Butcher, chief executive of the Centre for Future Work, said current economic challenges, such as housing affordability and cost of living pressures, have focused public attention on super in the hope it might provide some solutions.

“Super has a long history of playing a bigger macroeconomic role. It makes sense to consider how it might now. But I think that is less about its size and more about ensuring it can be more easily put to public purposes to address new economic problems.”