Rush for $10,000 crashes ATO site
Australians desperately trying to prise open their super as part of the government's stimulus response for the coronavirus crisis has caused the Australia Taxation Office's website to crash.
Within an hour into the new financial year which triggered the next round to grab another $10,000 from their own retirement as part of the early access scheme, the website froze due to high demand.
By 11am today, those seeking online services remained locked out after 2.4 million applied for the first instalment last financial year.
"We're currently experiencing a high volume of traffic," is currently displayed on the site.
"We understand significant numbers of people need to access our online services.
"We are proactively managing our online traffic so that systems continue to be available.
"We apologise for the inconvenience."
The Federal Government made retirement funds available to those who have had their income plunged into doubt as a result of the coronavirus-induced shutdown and ensuing economic crisis.
Under the controversial scheme, those impacted by the outbreak were able to grab $10,000 from their super last financial year and another $10,000 from today until September 24.
The initiative was rushed into existence to assist the hundreds of thousands of Australians who had their income plunged into doubt as the lockdown created economic chaos and mass job losses.
But data released over the last few months indicate this emergency dip into vital retirement savings has been spent on online gambling, alcohol and takeaway food, not the essential household items it was intended.
Comparison group RateCity joined a chorus of financial experts to implore Aussies to avoid dipping into their super.
"Superannuation is there to support Australians in retirement," research director Sally Tindall said. "Before you raid your nest egg again, think carefully about the long-term implications.
"If you're thinking about accessing this scheme, ask yourself, is there another way? Talking to a financial counsellor might help you think of alternatives to get you through."
Real-time banking activity from Alpha Beta and Illion shows many of those who took advantage of the access increased spending on lifestyle items.
A sample of 13,000 people revealed 64 per cent of the scheme was spent on discretionary items such as clothing, furniture, restaurant food, gambling and alcohol.
"That tells us that much of this money was used for lifestyle reasons rather than necessity reasons," Alpha Beta director and economist Andrew Charlton told the ABC last month.
"Superannuation is there for retirement, not for crises."
The Morrison Government received bipartisan vindication for the role its JobKeeker scheme played in softening the blow to unemployment as well as its swift action to push forward the JobSeeker package.
But the early release program is viewed as an ill-advised response, which has allowed Australians to access nearly $18 billion in total from retirement savings.
"We certainly wish the government had thought it through a little bit before they just opened up this can of worms," Financial Rights Legal Centre policy officer Julia Davis told news.com.au.
"We're glad that they thought about trying to relieve some of the extreme financial hardship that people are going to be in during this pandemic but accessing your superannuation should be a last resort.
"And unfortunately we're seeing a lot of examples of people accessing it as a first resort. This should not have been one of the first parts of the economic package."
The Financial Rights Legal Centre has been awash with complaints of real estate agents, businesses and even Centrelink staff using the access to super initiative as a means to bully and manipulate the community.
"We've seen numerous examples of landlords and real estate agents telling people to get their super to pay rent, which is a sad outcome," Ms Davis said.
"Suppliers who are angry they're not getting paid are pressuring small business owners to take out their super.
"We're even hearing over and over again that Centrelink itself are telling people who are trying to access JobSeeker payments who don't apply to access their super.
"It's a shame that people are out there pressuring people to do this without giving people that proper information and advice."
Investment experts have also been strong in their criticism of the package, warning of the significant cost of dipping into retirement funds.
A 25-year-old who withdraws $20,000 over the next two years stands to miss out on more than $200,000 by the time they're 65 based on a standard compound interest rate of 6 per cent, Burman chief investment officer Julia Lee says.
"Don't make long-term decisions based on short-term factors," she told news.com.au.
"The whole idea of superannuation is the beauty of compounding over time, which means you have time working in your favour for a long-term investment."
She strongly advised those struggling to make ends meet to exhaust other channels such as the government's massive $130 billion JobKeeper package or its Jobseeker initiative.
Originally published as Rush for $10,000 crashes ATO site