21 February 2023

Address to the Sydney Institute, Sydney


Preservation is superannuation


I would like to acknowledge the Gadigal people, the traditional custodians of this land, and pay my respects to the Elders past, present and emerging.

I reiterate the Albanese government’s commitment to the Uluru Statement from the Heart and a Voice to Parliament.

I acknowledge any First Nations Australians with us today and thank them for their contribution.

Many have gone before me in presenting at the Sydney Institute and I thank Gerard and the team for the opportunity to make my own contribution this evening.

Tonight, I want to lay out the government’s agenda for superannuation and outline what 2023 has in store.

Superannuation betters the lives of millions of Australians.

As such, many views have been and will continue to be expressed about the best way forward for this cornerstone public policy.

The Sydney Institute has long understood the importance of having these conversations.

In your own words, the Institute has a vision of encouraging debate and discussion and entertaining a wide and diverse range of views.

This is the Institute’s objective.

And it’s an objective that has guided you for over thirty years.

In comparison, I find it striking that superannuation has existed for over thirty years without a clear and shared understanding of its objective.

No other foundational public policy has existed for thirty years without a clear and shared understanding of its objective.

Medicare’s objective is to provide universal healthcare.

The HECS‑HELP system provides equal access to tertiary education.

ANZUS lays the foundation for our defence alliance.

For a system that requires certainty, the lack of a legislated objective for superannuation is more than an eyesore.

The government is going to address this.

Yesterday, the Treasurer launched the consultation on our proposed objective of superannuation.

This is not the start of a culture war in Canberra.

It is the start of a uniting conversation for all Australians.

There are big challenges and big opportunities.

And I believe in Australia.

We can meet these challenges and seize these opportunities for a more prosperous retirement for working families.

But even the best GPS can’t direct you if you don’t have a destination.


Allow me to set the context for superannuation.

Over thirty years, the superannuation system has grown to be the world’s third‑largest pension pool at over $3.3 trillion.

According to ASFA, investment returns have averaged 8.1 per cent per year over the last 10 years.

This is more than a success story.

Superannuation has been a life‑changer for millions of Australians.

Working families are retiring with larger balances than ever before as they share in the economic dividend of the nation’s prosperity.

And it is my vision that we can make a great system even better on the following three tenets.

A political consensus.

Strong performance.

Member satisfaction.

Political consensus

We are committed to legislating an objective of superannuation because there should be political consensus.

On average, superannuation is the second largest asset that Australians hold.

This is something that should be above politics.

But over the last decade, we’ve seen the superannuation sector with its back against the wall.

All roads may have led to Rome, but not all superannuation policy has led to improved member outcomes.

It became the cash cow for bad ideas and the last hope for problems that government was afraid to tackle.

The disastrous decision to allow billions to be withdrawn from super through the pandemic will be felt in the decades to come.

The proposals that have been rejected are just as consequential.

Using super to pay off HECs.


As members’ balances increase, it has become apparent that we need a strong framework in place to remind governments whose money it is.

It’s not ours, it’s yours.

It’s for your retirement.

And this should be something that Australians can rely on no matter who is in government.

Ironically, I have often thought that superannuation is a very liberal ideal.

Who would you expect to say the following things?

Individuals should be encouraged to be self‑reliant.

Government support should be targeted to those in need.

And an individual should enjoy the rewards of their own hard work in retirement.

In the words of John Locke, ‘the most precious of all possessions is power over ourselves’.

Superannuation gives Australians power over their own retirement in a way that they never had before.

And so I call on all parties across the political divide to join us in enshrining this objective.

We have suggested the following.

The objective of superannuation is to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way.

We think this captures it.

And we welcome the country’s views on ensuring that we have got it right.

But some might ask why we are doing this.

Simply, it’s about ensuring that superannuation policy is guided by a true north.

That the custodians of the system – the government, the regulators, the trustees – are held to account for their decisions.

So that there is certainty.

So that we have a defence against bad ideas.

And so we can focus on delivering in the best interests of members.


We only need to consider the concept of preservation to understand the practical effect of legislating an objective.

In the superannuation context, preservation is the idea that savings are inaccessible until retirement.

It’s a core principle of the system.

Preservation is superannuation.

One of the strengths of the superannuation system is that workers receive the benefits of significant compounding returns on a fairly low risk investment asset.

Without preservation, it is like forgetting to apply sunscreen for a day at the beach.

It may seem like nothing more than a short‑term oversight, but it comes back to hurt in the long run.

It is a costly decision as members retire with less.

And it increases the likelihood of them needing additional government support.

This is why it is only ever a short‑term solution for governments to look to super to be the answer to everything.

I’ve already mentioned how, sadly, Australians will feel the pain of the early release of superannuation program for decades to come.

Over 3 million Australians withdrew almost $38 billion, many of these young.

And almost 40 per cent of applicants were earning less than $37,000.

How tragic that our young and our low income were encouraged by government to do this.

How irresponsible that this was painted to be a sensible choice.

Or worse, their only choice.

The attacks on preservation are still current.

Some would say that housing affordability can be addressed by letting people raid their super.

But this policy is the new clothes of an emperor who doesn’t believe in superannuation.

We know that the answer to housing affordability is building new homes.

We need a legislated objective of superannuation to stop governments trying to use super for anything but retirement incomes.

I also want to go further and call out unconscionable behaviour in the private sector.

There are surgeons and medical practitioners who view super as their personal river of gold.

They are encouraging, and even pressuring, patients to tap into their super for what might be termed life‑enhancing procedures like cosmetic surgery.

There are business models set up to game the system.

This is deeply troubling and I am calling this out.

It is greedy. It does not pass the pub test. It is wrong.

This is the practical impact of a policy space that lacks objective.

And it’s why the objective of superannuation needs to be simple and solely focussed on bettering and ensuring retirement incomes.


Retirement incomes are maximised by lifting the performance of superannuation funds.

In the spirit of elevating superannuation policy above partisan politics, I want to acknowledge that my predecessors made an important contribution to performance.

Each MySuper product has been subject to an annual performance test for a few years now.

It has been a blunt instrument to increase performance and drive down fees.

As you may know, this performance test has been a key part of the review that I tasked the Treasury to complete last year to uncover any unintended consequences.

Stakeholders have expressed a range of views.

And we will have more to say on next steps shortly.

But let me be clear.

The performance test is here to stay.

It would not be consistent with the objective of superannuation to remove the performance test.

Just as governments will be held to account when the objective of superannuation is legislated

So trustees will continue to be held to account for their performance with members’ funds.

The added benefits

The objective of superannuation should not be confused for the benefits of superannuation.

Superannuation is a huge pool of capital which, if marshalled strategically, can be a gamechanger for the nation.

Funds must act in their members’ best financial interest.

And where these interests align with the national interests, super funds can be a force multiplier in creating wealth for the nation.

By investing in Australia, and for Australia.

Nor should the objective in any way restrict superannuation funds from serving their members.

I have made it very clear to the sector that I expect them to do more for their members.

Service levels are not up to standard, and they need to improve.

With an ageing population, more members are retiring with more income than ever before.

A focus on accumulating large balances – while important – is only half the story.

Funds need to do more to understand and know their members and serve their diverse needs.

That will help deliver a dignified retirement.


And a dignified retirement is what superannuation is for.

I’m proud of what superannuation means to this country.

What it means to working families.

And it will be strengthened under an Albanese government.

It starts with establishing a political consensus.

Which must make it clear that superannuation is for retirement incomes.

Not for cosmetic surgery.

Not for estate planning.

Not for housing.

And so we are inviting the country to join the conversation that will set the terms for superannuation policy for the decades to come.

Because with an objective that is codified, Australians will have certainty about the direction.

A direction that guarantees preservation.

That maximises performance.

And that puts the member’s needs at the centre.

This is the vision for better retirement incomes for all Australians.

That’s the objective of superannuation.