The Banking Royal Commission asked for submissions on a number of issues. Perhaps the most controversial is whether indigenous people should be allowed to access superannuation earlier due to their lower life expectancy.
The Australian Tribune believes this proposal turns a blind eye to the real issue. And that is addressing the persistent gap in life expectancy between First Australians and New Australians. A gap that exceeds 10 years for aboriginal men, according to Australian government figures.
There is plenty of blame to go around here. That certainly includes failings by federal and local authorities to provide the best possible services. It also includes shortcomings within indigenous communities and among individuals themselves to look after their own health practices.
At the end of the day, it’s up to each of us to decide whether we exercise, eat right, and if we smoke or drink too much alcohol.
Allowing early access for Indigenous could be detrimental
If it’s deemed permissible to adjust the preservations age based on life expectancy, then that adjustment should be decided on an individual basis.
There are plenty of Australians of all races and backgrounds whose genetics and lifestyle choices predispose them to an early death. Under the current system, it’s generally only those who are mortally ill who can get an exemption to access their super funds early.
This proposal opens up a Pandora’s Box that could see the current system gutted by people wanting early access to their super savings.
And that’s not to mention the decidedly sticky issue of determining just who can claim an Aboriginal or Torres Strait Islander identity.
The prime minister’s department has already sounded off against the proposal. It says allowing Aboriginal and Torres Strait Islander people to access superannuation early goes against the principles of the super system.
But the department also say super funds need to have a larger consideration for the Indigenous peoples of Australia when it comes to their needs and life expectancy.
Australian Indigenous people are disproportionately affected by a lack of flexibility in superannuation laws — which makes it hard for trustees to distribute funds differently based on an individual’s or group’s life expectancy.
Who is behind the policy change?
The Australian Securities and Investment Commission said there was a valid life expectancy argument, but if tampered with could result in a more detrimental outcome than the one which already stands.
‘Were the preservation age to be lowered for indigenous members, this would result in indigenous members not receiving the benefit of the largest growth phase of a superannuation account,’ it wrote.
According to AAP, Prime Minister Scott Morrison’s Departmental Submission recently said that a fundamental step toward improving superannuation services for Aboriginal and Torres Strait Islander people is increasing the sector’s awareness of culturally appropriate considerations regarding the administration and release of funds.
‘PM&C cautions against measures that would reduce the preservation age for a particular group in the Australian community as it runs counter to the universal aspect of the superannuation system.’
National Australia Bank has said to support further consideration of whether life expectancy should be considered in accessing super for indigenous people.
‘This issue goes to the very crux of the potential disadvantages faced by Aboriginal and Torres Strait Islander people in respect of their superannuation,’ NAB’s submission said.
ANZ has also jumped onto the bandwagon but says the current laws would need to be changed in order for that to happen.
PS: The global elites could be waging a stealth war on cash even as you read this. This free report reveals more. And three actions you can take today to help safeguard your financial privacy.