(Transcript from World News Radio)
Treasurer Joe Hockey says Australia needs to make the super system more flexible.
He suggests it could be used to help first-home buyers or to add to income as people age and work longer.
Labor's treasury spokesman Chris Bowen dismisses the idea, saying the system needs reform but superannuation should be used to help older people and protect the aged pension.
Amanda Cavill reports.
Chris Bowen says allowing young people to dip into their superannuation to buy their first home would only push up house prices and undermine retirement savings.
Mr Bowen says Australians need superannuation more than ever before because they are living longer.
He says the system does need reform to benefit low- and middle-income earners but the money should not be used until retirement.
"Superannuation reform, letting people save for their own retirement with a fair taxation treatment of superannuation which treats low-income earners and high-income earners both fairly, is the key, is the key for dealing with demographic change. This Government has backward policies in relation to superannuation -- slowing down the rate of increase in the superannuation guarantee, removing the tax concessions for low-income earners and refusing to deal with equity in the superannuation system."
Treasurer Joe Hockey says the Government is willing to have a debate about changing the super system to help people across their longer working lives.
Mr Hockey says tax, superannuation and workplace changes are more important than immigration when it comes to
turning the budget and the economy around.
The Treasurer says there needs to be a conversation about laws, including superannuation, to help keep older people in work.
"(If) a young Australian is going to live to 100, they're going to have many careers. Naturally enough, they're not going to be retiring at 65. So, with many careers and a longer time in the workforce, which is their choice, then we may need to look at how we can make superannuation more flexible to cope with the ins and outs from a working life. We are prepared to look at a diverse range of proposals to help young Australians buy their first home."
Industry groups have also spoken out against the idea, saying it would erode retirement savings.
Australian Institute of Superannuation Trustees chief Tom Garcia has told the ABC that how the superannuation works needs to be discussed.
But he says opening it up for home loans or anything else is not the way to start.
"It's a matter of principle. The idea of the superannuation system is to provide someone for an income later in life when they finish working. If you start pulling money out at the beginning, you lose all the effect of compounding. What else does it get opened up to? I don't think we should be fiddling with it at all. This is beginning to look like tinkering again."
Mr Garcia also says giving Australians more flexibility to use their retirement savings could impede the ability of funds to invest in large, nation-building infrastructure projects.
The Government says it is standing by its promise not to make any changes to superannuation until after a new policy is developed and after the 2016 election.
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