One Nation super policy estimated to cost Aussies whopping $190 billion in extra taxes, report claims

One Nation’s controversial plan to allow workers to access their superannuation funds early would cost Australians a combined $190 billion in the long term, according to new modelling.

The Super Members Council found 20-year-olds would have to pay an extra $3700 in tax over their lifetime if Pauline Hanson’s idea to allow all workers to access 3 per cent of their super for up to three years becomes law.

This is mostly due to paying higher age pension costs, estimated to cost at almost $4.5 billion a year over the long term, for those who withdrew their super early.

“Your super is not designed to be an ATM or to solve politicians’ policy problems,” Super Members Council chief executive Misha Schubert said.

“A policy like that won’t just make you much poorer in retirement, it will also hand you, your kids, and your grandkids a bigger tax bill to pay more in pensions if other people take their super out early.”

One Nation’s plan would allow workers to access 3 per cent of their super for up to three years, temporarily taking the compulsory 12 per cent rate to 9 per cent per annum, with no eligibility requirement.

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Hanson rejected the concern that potentially allowing millions of people to have an influx of money would drive up inflation and said it would help them pay for higher rent and mortgage payments.

The Coalition has also floated the idea of allowing super to be used as collateral and a portion to be diverted to pay off a mortgage or increase the size of a loan.

It went to the last two federal elections unsuccessfully proposing to allow workers to withdraw up to $50,000 of their super for a first home deposit.

Super has been growing as one of the main sources of income for retirees since it was introduced by the Keating government in 1992.

In the decade to the 2024-25 financial year, the proportion of retired people with super as their main source of income increased from 20 per cent to 28 per cent.

Australians can already access their super early under strict conditions in place for those who wish to withdraw their funds early for compassionate grounds like terminal illness, incapacity and severe financial hardship.

About 67,900 people were allowed to withdraw a combined $1.4 billion in their retirement savings in the 2024-25 financial year in what was the highest figures in a seven-year period, according to the latest data from the Australian Tax Office.

Australia is currently on track to have the lowest pension spending in the OECD as spending on the age pension is projected to fall from 2.3 per cent of GDP today to 1.8 per cent by 2066.

Schubert warned the trend could be reversed under the far-right party’s policy.

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“Many other countries are struggling under the weight of rising pension costs as their populations age. Australia’s super system is the reason we’ve avoided that fate,” she said.

Treasurer Jim Chalmers has declared the next federal election a “referendum” on super as the government prepares to defend the compulsory system Labor created.

“Any combination or coalition of Liberals, Nationals and One Nation would make Australian workers worse off,” he told reporters last week.

“We know that from their approach to wages. We know that from their approach to super. And so they will continue to be the main risk posed to our economy and to our workers.”