The de-identified data of 10,000 Australians suggests that early super is driving a discretionary spending boom, according to research house illion, with almost half of total money withdrawn spent on purchases including alcohol, clothing, and furniture in the first fortnight.
“This second tranche of super withdrawal and spending follows the same trend as the first round – but at greater levels of spending,” illion said. “These short-term decisions will have a major impact on the retirement incomes of those who withdrew their super.”
On average, Australians withdrew around $7,495 and spent an extra $3,618 in the first fortnight compared with what they spent in a normal fortnight before receiving their early super. illion also claims that 38 per cent of people who accessed their super saw no drop in their income during the COVID-19 crisis, while 21 per cent saw a 10 per cent increase in their income.
“For many, the real impacts of early super withdrawal will only be felt years down the road,” illion said. “A double withdrawal by mum and dad now potentially means that a chunk of their retirement saving has been spent. The financial impacts of COVID-19 will be with us for a very long time.”
But assistant minister for superannuation Ms Hume questioned the independence of illion partner AlphaBeta, which is run by a former member of Kevin Rudd’s staff.
“Who commissioned this searing analysis? Or did former Rudd staffer Andrew Charlton do it out of the kindness of his heart?” Ms Hume wrote on Twitter in response to comments from shadow finance minister Stephen Jones. “Unbelievable to suggest this ‘data’ is more reliable than the ABS and the ATO. I know who Australians trust – and it’s not you and your mates.”
Ms Hume said that data from the ABS showed 57 per cent of people used the money to pay their mortgage, while 30 per cent put it in their savings.
However, shadow finance minister Mr Jones noted that while Ms Hume was quick to question illion’s independence, the LNP’s might not have a leg to stand on.
“You guys have used these same consultants over the last few years,” Mr Jones said on Twitter. “If they are independent when they produce a report you like why aren’t they independent when they produce one which you find a bit awkward?”
