Plaudits and brickbats for the Retirement Income Review: Who said what

Nov 20, 2020
Reactions varied for the long-awaited Retirement Income Review. Source: Getty,

The Treasury’s Retirement Income Review, released on Friday, attracted its fair share of plaudits and brickbats from early commentators, with many stakeholders highlighting the government’s comments in support of once again freezing the legislated lifting of the Super Guarantee (SG). Here are some reactions from those important voices representing older Australians and the retirement income sector.

National Seniors


National Seniors was pleased the review found older Australians weren’t an ‘economic time bomb’ of potential cost on taxpayers or the economy, as some have asserted.


The 600-page document didn’t contain clear recommendations and fell short of giving a full understanding of the problems, the advocacy organisation said. National Seniors also pointed out that the suggestion retirees access home equity to finance retirement wasn’t feasible with the current 4.5 per cent interest rate payable on loans from the Pension Loans Scheme. It urged the government to cut the interest rate on the loans so more pensioners could access their home equity without having repay the loan at such a high rate.

Additionally, the organisation found that the report did not adequately acknowledge the actual reasons why older Australians do not make better use of their savings.

National Seniors chief advocate Ian Henschke said: “Seniors tell us time and again they are petrified of running out of money. They fear the pension, health and aged care systems, which are essential components of the retirement income system, won’t meet their needs. Acknowledging these fears is an important first step in reforming the retirement income system. If you look at aged care, for example, we are currently in the middle of the Royal Commission because, to use the Prime Minister’s own words, people have lost ‘faith’ in the aged care system”.

Council on the Ageing Australia (COTA)


COTA appreciated that the Treasury responded to COTA’s repeated calls to release the final report before formulating its policy response, so that the community could objectively analyse the findings and actively participate in the next step.

The council argued that the report rightly provided more evidence-based discussion regarding lifting the SG rate, which should help to put the highly politicised debate to rest and allow policymakers to go about their job of ensuring older Australians had a sustainable, just and accessible retirement income system for the future.


COTA said the report was missing those who had slipped through the cracks in the retirement sector, including many women and those in the private rental market, who are among those worst off in retirement.

COTA Australia CEO Ian Yates said: “It is vital to emphasise that this review was not just about compulsory superannuation, which is only one, albeit very important, part of a total retirement income system, in which the adequacy of the Age Pension and other public policy supports, such as health and housing, for all vulnerable retirees is also of paramount importance”.

Industry Super Australia (ISA)


The peak body for industry super funds said the Retirement Income Review confirmed that Australia’s compulsory super system had lifted living standards for millions, while easing the burden on the Age Pension. It also welcomed findings that Australia’s sustainable and compulsory super system had allowed millions to save for their retirement.


ISA argued that some of the findings on the legislated SG increase that the government “selectively released” overnight to some media organisations appeared ill-founded. Most prominently, the representative body was referring to the government’s claim that working life income would be 2 per cent higher if the super rate wasn’t lifted.

The body also mentioned that it was unclear if the report had considered the millions of young Australians who had taken out more than $35 billion from their super, dramatically changing their retirement savings trajectory. ISA was also concerned by the panel’s suggestion that rather than lift the SG rate, retirees should instead sell the family home, or reverse mortgage it to the hilt, to fund their golden years.

Industry Super Australia CEO Bernie Dean said: “The two-thirds of Australians who support the legislated and long-promised super increase would not take too kindly to politicians, who pocket 15 per cent super on top of their generous salary, using this review to snatch away their retirement savings. This report’s findings must be used to support sensible reforms that will grow members’ savings, not cherry-picked to support preconceived policy ideas that will leave people and the nation worse off”.

Association of Superannuation Funds of Australia (ASFA)


ASFA found that the review highlighted the role superannuation has played in keeping the burden of the Age Pension below 2.5 per cent of gross domestic product (half the cost borne by our nearest OECD counterparts) and furthermore allowed the pension to be kept for those who needed it most. The report also echoed ASFA’s concerns that unnecessary tinkering by successive governments had led to unwarranted and costly complexity in the system settings.


The one point that ASFA strongly disagreed with in the review was the lack of importance placed on increasing the SG to 12 per cent as is legislated.

ASFA CEO Dr Martin Fahy said: “ASFA research found that 75 per cent of Australians support the legislated increase to 12 per cent SG, which is a cost to business of less than $1 a day for the average worker. For many Australians the increase to 12 per cent SG is essential to offset the financial loss from super withdrawn under the Covid-19 early release scheme”.

Royal Melbourne Institute of Technology – Associate Professor Stuart Thomas


Thomas agreed that despite Australia’s high rate of home ownership, for many, superannuation and the Age Pension would not be enough to support them comfortably, especially in late retirement.


Thomas said that if the government was genuine about making home equity release a more prominent method of retirement funding, and addressing this gap, it needed to first address low financial literacy in this area.

Associate Professor Stuart Thomas said: “Australia also lacks a deep and diverse equity release market, with disjointed regulation between states and the federal government among several barriers to entry for innovative new products. This needs to change if equity release is to play a more prominent role in funding retirement in Australia”.

Household Capital


Reverse mortgage provider Household Capital welcomed the Retirement Income Review’s support of home equity access for Baby Boomers as a retirement income solution and that it identified the lack of awareness around home equity as a source of retirement funding.

Household Capital supported the report’s statement that said: “Housing is an important component of voluntary savings for most people and a major determinant of their retirement outcomes … The home is also an asset that can be drawn on in retirement”.

Household Capital CEO Dr Joshua Funder said: “This report highlights the importance of home ownership in achieving security in retirement, such as removing the need for income to pay for rental accommodation and providing an asset that can be drawn on to supplement retirement income. Australian retirees are worried about their lives. Providing adequate, secure long term funding, including access to home equity, can give our senior citizens confidence in the future”.



QSuper, one of Australia’s largest super funds, applauded the focus the review put on the sustainability of the retirement income system, and the opportunity the review provided for the government to look at how it regulated and taxed the super sector – ideally leading to policy stability over the long term.

QSuper CEO Michael Pennisi said: “Our members tell us that one of their great concerns about superannuation is the prospect of the rules changing. They want stability in a system they believe operates for the long term. We would encourage the government to recognise this and support taking a considered approach to any reforms”.

Homesafe Solutions


Homesafe Solutions, a debt-free equity release provider, welcomes the recognition the review made of equity release as a retirement income solution, and the fact it highlighted the availability of products for retirees in that areas. It said the government now had an unprecedented opportunity to ensure the equity release market was more efficient.

Homesafe Solutions COO Dianne Shepherd said: “Accessing the equity built up in the home, to enable older Australians to fund a comfortable and independent retirement, makes sound financial sense for many senior Australians, and many already use this strategy”.

IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.

Do you agree with the review? What do you think it was missing?

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