The $25,000 retirement hit experts warn lies beneath One Nation's superannuation plan

One Nation has unveiled a proposal that would allow Australian workers to redirect a portion of their compulsory superannuation contributions directly into their bank accounts — but finance experts and industry bodies are warning the short-term cash boost could cost some people as much as $25,000 by the time they retire.

Under the plan, workers who are paying rent or a mortgage would be permitted to divert 3 per cent of their superannuation contributions — out of the current compulsory 12 per cent rate — straight to their wallets for up to three years. Employers would continue contributing 12 per cent, but only 9 per cent would be invested by the nominated super fund, with the remaining 3 per cent paid out to the worker at the concessional tax rate of 15 per cent rather than their personal income tax rate.

Party leader Pauline Hanson framed the policy as a lifeline for households under financial pressure. "For a full-time worker earning about $90,500, that means around $2,300 a year after tax, or $44 a week, extra in their pocket," she said, adding that a working couple earning $168,000 combined could expect roughly $4,300 a year — or $82 a week — back in the family budget. "That's a real boost to help you pay the rent or the mortgage," Hanson said.

What the numbers actually mean for your retirement

While the weekly figures sound appealing to cost-of-living-squeezed households, independent analysis paints a far less flattering picture of the policy's long-term consequences.

Mardy Chiah, associate professor of finance at the University of Newcastle's School of Business, calculated that a worker on a $90,000 salary who opts in would receive an extra $2,300 a year — or $6,900 over the three-year period. But the compounding cost to their retirement fund would be far greater.

"The loss can be quite substantial. You're taking money away from your future self," Chiah said. He estimated the total hit to invested income would be between $23,000 and $24,000 — and warned that reducing the investment rate to 9 per cent could compromise an individual's ability to "retire comfortably".

The Super Members Council's own modelling put the figure even higher. According to the Council's analysis, a 30-year-old full-time worker on a salary of $90,500 who opts into the scheme would retire with $25,000 less in their superannuation balance. That same worker would forgo more than $18,000 in compounding interest alone by the time they reach the retirement age of 67.

Super Members Council CEO Misha Schubert said the scheme would not only damage individuals' retirement savings but risked broader economic harm. "There are smarter and better ways to help Australians struggling with housing costs ... none of them involve telling Australians to raid their super and their futures," Schubert said, adding that the policy could also drive up inflation and interest rates, making cost-of-living pressures worse rather than better.

Critics warn of broader taxpayer burden

Beyond the individual retirement shortfall, Professor Chiah raised concerns about the downstream cost to Australian taxpayers. He warned that if more people retire with depleted super balances, a greater number would become reliant on the age pension — effectively shifting the financial burden of the policy onto future generations.

"More people would likely have to access the age pension for their retirement, which means future taxpayers would be funding this policy," he said. Chiah stressed that the "preservation of a retirement fund" is crucial for all Australians and that drawing down on superannuation early should only ever be a "last resort".

Social Services Minister Tanya Plibersek was sharply critical of the proposal, saying the government's priority was higher wages and stronger super — not encouraging workers to deplete their nest eggs. "We know that if you raid your super now, you'll be thousands of dollars worse off in retirement," she said, noting that minimum wages have risen by more than $12,000 since the Labor government took office.

One Nation defends the plan as a housing lifeline

One Nation MP Barnaby Joyce mounted a defence of the policy, arguing that for some Australians the more pressing risk is losing their home — not a reduced super balance decades down the track. "One of the worst things that could happen in regards to your future security is if you are without a house," Joyce said, adding that the financial devastation of losing a property would far outweigh any hit to superannuation contributions.

Joyce also noted that the policy would not touch existing super balances — it would only affect future contributions, and only for those who choose to opt in.

It is understood the proposal does not currently have the backing needed to pass the Senate, and the government has indicated it has no plans to support the measure. The debate nonetheless reflects growing political pressure over cost-of-living relief, with superannuation increasingly becoming a flashpoint as Australians weigh immediate financial survival against long-term retirement security.

For context, compulsory superannuation contributions are already locked away until retirement age under most circumstances — though limited early access provisions do exist, typically attracting a tax rate of between 17 and 22 per cent, comparable to standard income tax.