Shadow Treasurer Chris Bowen has backed the Financial Systems Inquiry's recommendation that a clear objective be agreed upon for the nation's superannuation system, suggesting that the focus should be helping Australians enjoy a "dignified" retirement without depending on the pension.
"I found this recommendation arresting in its simplicity," Mr Bowen said, adding that while many think that superannuation already has an agreed objective, in reality it does not. .
"One of the problems is that everybody has their own objectives for the superannuation system."
"I sometimes joke that in ten years in Parliament and six years as a minister I have never heard of one public policy problem that doesn’t have one of two solutions: teach it in the curriculum or force superannuation to invest in it."
Mr Bowen told the Centre for International Finance and Regulation that the multitude of purposes often assigned to an asset such as superannuation was unsurprising, given it is now worth more than Australia's annual GDP.
"It’s great if superannuation funds can invest in infrastructure for example, but it is not the purpose or overriding objective of superannuation," he said
"Likewise, having more funds under management through superannuation than our annual GDP has reduced the cost of capital in Australia and helped us with liquidity during the GFC."
While these are welcome development, Mr Bowen said none of these things can be the objective of superannuation.
"Having an agreed and simple objective would mean that progress could be measured against that objective. It would also mean that new policy ideas could be tested against the criteria of whether they meet that objective," he said
"I’m in favour of an agreed objective for the superannuation system and I am more than happy to invest the time and effort to see if we can make that objective bipartisan."
Mr Bowen concluded the overriding objective of Australia's superannuation system should be to "ensure that as many Australians as possible have access to the resources for a dignified retirement without recourse to the full age pension."
The Shadow Treasurer's comments come as debate rages over a government suggestion to allow people to tap their super to help buy a home.
Former treasurer Peter Costello and the head of the Abbott government's financial system inquiry, David Murray, have both delivered a strong rebuke to the government's suggestion.
"To divert money into housing at any stage during the build-up in superannuation savings is not consistent with having a good retirement income system," Mr Murray said.
Mr Bowen echoed that criticism, describing the "Treasurer’s thought bubble" as "disastrous".
"It would achieve the rare double of worsening housing affordability and undermining retirement incomes," he said
"It would allow first home buyers to bid against each other with their retirement incomes."
Mr Bowen said the only winners from the situation would be vendors, as housing prices increased even more, all the while eating away at retirement incomes.
This morning, new data from the Australian Bureau of Statistics showed first home buyers' share of the home loan market continues to shrink.