A former prime minister believes younger Australians are going to be ‘very poor’ in their retirement, having drained their super accounts during the early access to super scheme.

As part of the government’s pandemic support, Australians under financial duress were enabled access to up to $20,000 in their super savings, in two tranches between 20 April 2020 and 31 December 2020.

According to APRA, a total of 3.5 million initial applications were approved across the full period of the scheme, including 1.4 million repeat applications by those financially strained by the pandemic, putting the average payment at $7,638.

However, the architect of Australia’s compulsory superannuation, Paul Keating, has condemned the government for putting the burden of the economic recovery on younger people.

Mr Keating argues that members who accessed the superannuation scheme and withdrew $10,000 to $20,000 from their superannuation could be down hundreds of thousands dollars come retirement.

“The government made young people, broadly, carry the burden of the pandemic themselves before JobKeeper and before JobSeeker, and this means that someone 25 say or 30 who just pulled $25,000 or $30,000 out of their account, have lost half a million 30 years down the track. Half a million, half a million for 30k now,” Mr Keating explained on ABC 7.30.

“I mean how could you do that to young people? So, as these people get into their 50s and 60s, they are going to find they have a very poor superannuation, and they can thank the government for this.”

The former PM pointed out that the same people who accessed their superannuation early will be forced to carry the burden of funding an ageing population.

“This is one of the critical points. When I started this 35 years ago, 6.7 people between 15 and 65 carried the retirement burden of everyone over 65,” Mr Keating said.

“Today, that’s 3.7, and by 2030 it will be three. So, you have got three people by 2030 looking after everyone over 65 where before there were 6.5 people.”

When questioned if the pension system will remain enough of a safety net, especially for older women who statistically have less than their male counterparts, Mr Keating said: “Yeah. Well, I think pension adequacy is a really big point but, again, as the dependency ratio rises, and you have got more people my age relying on three taxpayers only to look after them, can we guarantee that the pension will even remain as generous as it is today? That’s the big question.

“This is why nothing beats self-provision. Nothing beats self-provision,” Mr Keating concluded.

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