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More from Frydenberg:
A third set of observations is around homeownership, and the report points out how important homeownership is to people’s security in retirement.
It points out that around 76% of people over the age of65 own their own home and that as a consequence, this allows them to have more discretionary income and it also provides an opportunity for them to draw down on the equity in their home in retirement.
So the thing we are looking out for here is if the federal government will move to pause scheduled incremental increases to superannuation, and Frydenberg looks like he might be circling in on that point.
The report looks at this in detail and makes the comment, and I will quote it, ‘maintaining the superannuation guarantee rate at 9.5% would allow for higher lending standards in working life. Working life income, for most people, would be around 2% higher in the long run.’
So the report goes into some detail about the trade-off between a working life income and people’s wages, and that with an increase in the superannuation guarantee, and points out that the most effective way for people to secure themselves in retirement is not necessarily an increase in the superannuation guarantee, but by more efficiently using the savings that they do have.