Super withdrawals could wipe billions from economy

Super withdrawals could wipe billions from economy

Labor frontbencher Stephen Jones is warning the economy could face a major hit if workers are forced to withdraw funds from their superannuation savings to survive during the coronavirus crisis.

The government on Sunday announced out of work individuals could access up to $20,000 of their super tax-free to help ease the financial hardship.

But Mr Jones told Sky News the government needs to put a buffer in place to ensure billions are not wiped off the share markets due to a sell-off of super investments.

“If super funds have got to sell down their assets on the stock markets today to pay for the sort of the run on the funds that may well happen, then we all lose,” he said.

“(Super funds are) going to have to sell on the bottom of the market and an enormous amount of shares are going to have to be turned over to pay for these withdrawals.

“If the government is insisting on using this superannuation facility, then it should be putting in place some sort of buffer for the superannuation funds, so we do not lose billions of dollars as an economy.”

Image: Getty

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