Australia’s centre-left government said on Thursday it would push ahead with plans to change superannuation rules, including restricting early access to funds until retirement and limiting tax breaks for high-earners.

The Labor government earlier this week launched a consultation on reforming superannuation – or retirement fund – saying it wanted the A$3.3 trillion ($2.3 trillion) pension system to become sustainable and equitable in the face of mounting pressure on the federal budget.

“We are not trying to revolutionise the system, but there are questions to be asked,” Assistant Treasurer Stephen Jones said in a speech to the Self Managed Super Fund Association.

“With the budget under increased pressure to meet the costs of essential services like health age, aged care … we need to consider reforms that put all elements on a more sustainable basis.”

Jones said restricting early access to funds is “fundamental” as it supported retirement incomes.

Australia’s annual deficit is expected to widen to around A$50 billion ($34 billion) by 2025/26 and total debt to balloon to A$1.16 trillion, or 43 per cent of gross domestic product, according to government figures.

Federal Treasurer Jim Chalmers estimates tax breaks on superannuation will cost the budget more than pension by 2050.

Less than 1 per cent of personal superannuation accounts had a balance of more than A$3 million and the average among that group was A$5.8 million, who could still avail tax concessions, he said on Wednesday, hinting at some controls for rich members.

The main opposition Liberal party said it would oppose any move by the government to tweak superannuation rules. Shadow Treasurer Angus Taylor told Sky News the savings of Australians were “not a piggy bank for the government to tax and spend.”

The chief of Australia’s biggest pension fund, AustralianSuper, in November warned against government efforts to tap into retirement savings worldwide.

($1 = 1.4697 Australian dollars)

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