HESTA has welcomed measures in tonight's Federal Budget aimed at easing cost of living pressures, while urging the Government to go further on reforms that would make the superannuation and retirement system fairer, simpler and more flexible for the Australians who need it most.
With many HESTA members feeling cost of living pressures, measures such as personal income tax cuts and offsets, reductions to the cost of medicines and fuel, and ongoing efforts to boost the supply of housing could provide much needed assistance.
The health and community services sector, where HESTA members predominately work, benefited from further funding for hospitals, urgent care and aged care.
HESTA Chief Experience Officer Lisa Samuels said the Federal Budget had been handed down against a backdrop of global economic uncertainty, with many Australians continuing to do it tough.
"This Budget has been delivered in a difficult environment, with geopolitical instability and persistent cost-of-living pressures shaping everyday choices for our members and many working Australians," Ms Samuels said.
"The typical HESTA member is a 42-year-old woman earning $63,000 a year and any relief the Government can deliver is welcome."
Ms Samuels said HESTA particularly welcomed the boost to the Low Income Superannuation Tax Offset (LISTO)[1] being reflected in the Budget Papers, as well as the upcoming extension of Paid Parental Leave, building super contributions on Paid Parental Leave to 26 weeks.
"HESTA has long advocated for the lifting of the LISTO payment and permanently linking it to personal income tax thresholds as a meaningful step forward, particularly for those working in lower-paid caring professions. Combined with extended paid parental leave and super paid on every one of those 26 weeks, these changes will make a real difference to the retirement balances of Australia's lowest-paid workers," she said.
HESTA continues to call on Government to modernise the retirement phase of super so more Australians can benefit from tax-free retirement investment earnings when they are eligible, and so retirees aren't penalised for continuing to work and contributing to Australia's economy and communities.
HESTA modelling shows only 45% of eligible Australians voluntarily transition to a tax-free retirement account. By 2030, nearly 3 million Australians could collectively miss out on $5.44 billion in retirement savings each year by remaining in accumulation accounts.
That's why HESTA is calling for a default retirement transition mechanism – one that could automatically move eligible members into the retirement phase, unless they opt out. This has the potential to put billions of dollars into Australian retirees' pockets and help boost the Australian economy, while providing a strong safety net for those nearing and in retirement.
"Dignity in retirement should be for everyone. Our members have spent their working lives caring for other Australians – they deserve a super and retirement system that works just as hard for them," Ms Samuels said.
HESTA further outlined practical ways to make the super system fairer and more flexible in its 2026-27 Pre-Budget Submission.
[1]From 1 July 2027, the LISTO income threshold will rise from $37,000 to $45,000 and the maximum payment will increase from $500 to $810 to the benefit of around 1.3 million low-income workers.
About HESTA
HESTA is one of the largest superannuation funds dedicated to Australia's health and community services sector. An industry fund that's run only to benefit members, HESTA now has more than one million members (around 80% of whom are women) and currently manages approximately $102 billion* in assets invested around the world.
*Information is current as at the date of issue.
