Key facts
- One Nation proposed allowing individuals to redirect a portion of future pension contributions to their paychecks.
- The policy aims to provide immediate financial relief to workers facing higher living costs.
- A full-time worker earning A$90,500 could receive an additional A$2,300 annually after tax.
- The ruling Labor party criticized the proposal as detrimental to long-term retirement savings.
Australia's hard-right One Nation party has proposed a significant shake-up of the nation's pension system, allowing individuals to divert a portion of their compulsory superannuation contributions to their take-home pay. The proposal, championed by party leader Pauline Hanson, aims to provide immediate financial relief to Australians struggling with rising living costs. Under the plan, people who rent or own a home could choose to redirect one-quarter of their future compulsory pension contributions to their pay packets for up to three years. This additional income would be taxed at concessional rates rather than higher personal rates. Hanson stated that a full-time worker earning approximately A$90,500 annually could see an increase of around A$2,300 in their take-home pay after tax, while employers would continue their 12% compulsory contribution. The policy has drawn sharp criticism from the ruling Labor party. Treasurer Jim Chalmers described the proposal as a "full-frontal attack" on workers' retirement savings, warning that the long-term losses from compound interest would far outweigh any short-term financial benefits, potentially leaving workers tens of thousands of dollars worse off in retirement. The proposal emerges as One Nation's support has grown in recent polls, with voters prioritizing living expenses and immigration. The national election is anticipated in 2028, and Chalmers suggested it would become a referendum on Australia's A$4.5 trillion pension sector.