Transcript: Sky News 20/4/20
12.10pm | April 20, 2020
SENATOR JENNY MCALLISTER
SHADOW CABINET SECRETARY
SHADOW ASSISTANT MINISTER TO THE LABOR LEADER IN THE SENATE
SENATOR FOR NEW SOUTH WALES
SKY NEWS AM AGENDA
MONDAY, 20 APRIL 2020
SUBJECTS: Early access superannuation scheme.
TOM CONNELL, HOST: Joining me live now is Labor Senator Jenny McAlister, for more on this. Thanks for your time. People can already access super during financial hardship and for many Australians what is happening right now will be the most financial hardship they have in their lives, so it doesn't make sense to link this scheme with the Coronavirus?
JENNY MCALLISTER, SHADOW CABINET SECRETARY: Tom, Labor's had its reservations about people using super for this purpose. We need to make sure that we come out the other side of this crisis with the resilience as a community to deal with all of the challenges that the next couple of decades will throw at us. And certainly people having a secure retirement is a priority in that context. But the government has set it up and we're pretty determined to make sure that it works. The key thing now I think, is to make sure that people are accessing good advice before they make some of these very big decisions that could impact on the financial future.
CONNELL: So when you say good advice, I mean, if we have a caveat and a warning, withdrawing super, and perhaps an estimate on how much you lose at the end, should that be enough? How many people can be out there? Right now, 1.7 million people getting extensive advice? Don't we need to leave it up to them, make them aware of what choice they're facing right now in terms of the true impact on their retirement? And then say on balance up to you.
MCALLISTER: Well, I think that is where the Government has landed. And people need to be alive to the fact that there are long term consequences for withdrawing perhaps $20,000 out of super today. So there are some models, which suggest that if you take 20 years old, you take $20,000 out today, the impact at the point of retirement might be as much as $120,000. So it's a big impact, right. It's a big change to what you might expect to happen in retirement. I'm not certain people are aware of that, and so I'm a little concerned that when people are under real pressure, really serious financial pressure, it can be difficult to get the information that you need. Now, if you're a hospo worker, a woman, you've lost your job, you're worried about the bills, I think it might be easy to reach for this as a really quick way to solve your problems. There might be some other mechanisms you can look to, to help in this, in this situation, before you take this quite serious step.
CONNELL: It is a serious step for people accessing this you know, they might be facing alternatives that don't like. This might be a choice between accessing this or pulling a child out of their chosen independent or private school. It might be accessing this or feeling as though they might lose their house for example, and you're talking about retirement, the best thing you can do is own your own house.
MCALLISTER: It's absolutely right that people are under enormous pressure. But some of the things that people might be worrying about are things where you can find relief. For example, the banks are obviously offering hardship provisions to their clients. Telecommunications providers are also offering hardship arrangements for clients who are struggling with their bills. It's the same with the energy providers. The best thing to do, if you are struggling with your bills is to actually try and get some advice. The national debt helpline is an option for people. It provides free, independent financial counselling. If you're really struggling, my sense is that you really do need to just try and get all the information you can before you take what is quite a serious step.
CONNELL: Yeah, that's fair enough. And we're certainly having people do that. On the other element though of a house. Yes, banks are offering a deferral for now of six months, we'll see if that extends because the financial impact could go longer. The other thing is, that money actually becomes capitalised. That is added onto the line during that time and could add three or four years on to someone's mortgage. So that's also a difficult option. Even though it sounds great, you get an amnesty. It's not without a penalty.
MCALLISTER: That's right. There are for many people, no good choices right now. I guess the message is that if you are worried and you are struggling, try and get some advice. The number of people who've applied to access the scheme is already approaching 900,000 people. That's before the schemes even officially opened. It sounds like a lot of people are really wanting to use this system. Let's see how it goes. But it's really important that people actually, just carefully weigh the options. The long term impacts can be pretty significant in a difficult time.
CONNELL: Alright, pretty measured advice. Jenny McAllister Labor Senator thanks for your time today.
MCALLISTER: It's a pleasure.
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