Anthony Albanese's government proposes major changes to superannuation

Australians could have a harder time accessing their super before retirement age with Labor proposing new laws to possibly avoid a repeat of 2020 during the start of Covid.

Treasurer Jim Chalmers will use a speech on Monday to propose further restrictions on touching retirement savings – emphasising a key difference between Labor and the Coalition.

His Liberal predecessor Josh Frydenberg in 2020 allowed Australians to access up to $20,000 of their superannuation in two maximum $10,000 installments as Covid lockdowns saw many service-orientated staff lose their jobs.

Australians withdraw about $36 billion from their retirement funds, as lockdowns caused the first recession in 29 years.

The Liberal Party also went to the last election with a policy to allow Australians to withdraw $50,000 from their super to buy their first home. 

Australians will be barred from accessing their super during an emergency like they did during the start of the pandemic (pictured is a Centrelink queue at Southport on the Gold Coast in March 2020)

Dr Chalmers says that early withdrawal of billions was a ‘disastrous policy’ from the former Coalition government.

The government will now work towards enshrining the definition of superannuation in law to preserve retirement savings.

‘This made us vulnerable to wrong turns and wrong decisions,’ he will say.

‘It moved us further away from where we need to be – better living standards in retirement for as many Australians as possible.’

The proposed definition is: ‘The objective of super is to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way’.

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The Treasurer says legislating the definition will provide certainty and signal to the superannuation funds should all be aimed at prudent long-term investment, not short-term returns to satisfy early withdrawals.

The government will release a consultation paper to receive feedback on their proposed reform in the hopes of shoring up the $3.3 trillion super industry.

‘To my mind, defining super’s task as delivering income for retirement isn’t to narrow super’s role in our economy, it’s to elevate it, and broaden it,’ Dr Chalmers will say.

 Australia’s superannuation system is facing an overhaul, with Anthony Albanese’s government looking at ways to block the early release of retirement money.

‘A sharper focus on delivering for members requires that funds always invest in a way that secures the right risk-return profile.

‘As an industry, you’re in the game of long-term investing.’

Former prime minister Scott Morrison campaigned, ahead of the May 2022 election, to allow Australians to access $50,000 of their super to buy their first home.

Australians have to wait until they are aged 60 to access their super if they are born after July 1, 1964.