You think superannuation is your 'nest egg' for the future? Anthony Albanese's government has a brutal message for you - as it pushes new rule

Workers are treating their superannuation like an investment or 'nest egg' for the future when it's meant to be used for a dignified retirement, the government says. 

Prime Minister Anthony Albanese wants a super 'objective' turned into law next year and a Treasury discussion paper has given a fresh insight into what that will mean for Australians.

Tightening access to superannuation could potentially stop workers from accessing their super to buy their first home - a policy favoured by the Liberal Party. 

'The government's proposed objective of superannuation makes it clear that the purpose of superannuation is to deliver Australians with income for a dignified retirement,' the Treasury document said.

'Australians, however, often perceive and characterise their superannuation balance as a 'nest egg' or an investment, rather than as savings to be drawn down to deliver retirement income.'

As part of Labor's legislated objective for super, Treasurer Jim Chalmers and his assistant minister Stephen Jones have flagged changing super so more Australians have access to annuities.

This is where someone receives regular payments each year from their retirement savings.

'The problem is most retirees do not have access to the appropriate products to help them maximise their super over their lifetime,' the ministers said on Monday.

The Treasury discussion paper noted only 3.5 per cent of retirement products offering annuities, or fixed sums paid out to retirees each year. 

Treasury noted that Australians are living longer and will need to rely on their superannuation for longer.  

A woman retiring at 65 has a 45 per cent chance of living to 90, compared with 33 per cent for a man.

'As a result of increased life expectancy, more retirees need to rely on retirement incomes that are sustainable into their late 80s and 90s,' Treasury said.

'In effect, the likelihood is even higher as improvements in health and medicine will further increase life expectancy during a person's retirement.'

Housing affordability crisis 

Labor has dedicated more of its energy to tightening access to superannuation, even as housing is becoming increasingly unaffordable for the young.

New lending data showed demand for home mortgages continued to rise in October, with high immigration boosting demand for houses.

First-home buyer loan commitments rose by 5.1 per cent in October. They were 6.8 per cent higher over the year, the Australian Bureau of Statistics revealed.

Average loan sizes for first home buyers grew by 0.3 per cent to a record $507,000. With a 20 per cent deposit, that would buy a $633,750 home.

This is less than half Sydney's median house price of $1.397million, which means a first home buyer would only be able to afford a unit in Australia's most expensive capital city.

First-home buyers made up just under a third of 32.6 per cent of borrowers, with many relying on financial help from their parents to get on the property ladder.

State of super 

Labor in October introduced draft legislation so the 0.5 per cent of Australians with $3million or more in super will see their concessional tax rate for contributions double to 30 per cent, up from 15 per cent, from July 2025.

The government said this would only affect 80,000 people but the Financial Services Council argued Labor's plan would hurt 500,000 people as part of a plan to save $2billion a year. 

Australians have $3.5trillion invested in super but 27.6 per cent, or $964.5billion, of that is in default MySuper products dominated by union-backed industry super funds, Australian Prudential Regulation Authority data showed.

Since compulsory employer super debuted in 1992, only Coalition governments have loosened the rules to allow early access.

Former Liberal prime minister Malcolm Turnbull's government in 2017 introduced the First Home Super Saver Scheme which allowed $15,000 a financial year to be withdrawn from super, but only from voluntary contributions.

A total of $50,000 can be taken out to fund a mortgage deposit on a first home.

During the pandemic in 2020, Scott Morrison's government allowed $20,000 to be withdrawn in two $10,000 instalments if Covid lockdowns had hurt them financially.