Newly elected Liberal parlimentarian Andrew Bragg last week used his maiden speech to take a stance on superannunation.
The New South Wales senator believes that compulsory super contributions do not benefit low income Australians and instead suggested that workers should have the choice of being able to receive the cash when they lodge their tax returns or save for retirement.
Bragg suggested that super contributions make it harder for Australians to save for a home.
"I do not believe the system is working for Australians," he told Parliament.
"Super is making home ownership so much harder for lower-income Australians.
"I would change direction: superannuation should be made voluntary for Australians earning under $50,000," he said.
Bragg also said that the proposed plan would also benefit the Federal Government, as the cash would be taxed at a higher rate.
"I commissioned modelling from Rice Warner Actuaries which estimates a saving to government of $1.8 billion in the first year alone," he said.
However Industry Super Australia chief executive Bernie Dean has slammed the proposal by Bragg, calling the plan extreme.
"This extreme plan will see low income workers pay more tax only to end up with less money at retirement.
"Taking away compulsory super for low income earners would condemn some of our most vulnerable Australians to poverty in retirement.
"We are already seeing the transformative impact superannuation is having on people’s lives at retirements – the Government’s focus must be on improving the system and building workers’ nest eggs – not finding new ways to undermine it."
In a statement, Industry Super went further to say that voluntary contributions would leave workers worse off.
"Industry Super Australia (ISA) analysis shows that for a person on $50,000 a year, raiding their super guarantee contributions would increase their personal income tax bill by $1,710 a year - an increase of nearly $1,000 on the low tax they would otherwise pay in super.
"Any claim that this would “save” $1.8 billion conveniently ignores the fact that wages are taxed at a higher rate than superannuation - meaning this would actually cost low income workers more in the long run.
"We know that women already retire with around 40% less super than men. Making super voluntary for people who earn under $50,000 a year would have a devastating impact on low income workers, and increase the gender gap even further," the body said.