When the amounts in question are so big, it is absolutely imperative we have a discussion about the fundamental structure of our superannuation sector from time to time, and now is a good time to do it.

To suggest otherwise is to argue that our superannuation system is perfect and cannot be improved. Worse still, in the face of changing demographics, it is important we ensure that our superannuation system can meet the challenges people will face in the future.

All this has come to a head after Treasurer Joe Hockey suggested that people should be allowed to draw down from their superannuation funds to pay the deposit on a house. With many young people struggling to make a deposit on a house, this doesn't seem entirely unreasonable.

Former Prime Minister Paul Keating, however, argued against that, saying that the principle behind superannuation is that it needs to compound, and that taking money out early severely depletes the value of that superannuation policy at retirement.

The truth is probably somewhere in between; it all depends on the rates of return that you get on your superannuation fund, and the rate at which you borrow money from the bank.

If the interest rate you pay the bank on your mortgage is more than the rate your superannuation fund returns to you, then you are probably losing money. And that's before any consideration of the capital appreciation of your house.

Last year APRA published analysis of the performance of our 200 largest super funds. The fund with the best 10 year return paid 10.5% average over that period. By the time you get to the equal 48th best fund, that average return sank to 6.3%.

In comparison, statistics from Australian Bankers Association shows that the standard variable mortgage rate during this period hovered around 7.3%.

I'll leave it to readers to decide how well they are doing.

Singapore is one country that allows people to draw down from their superannuation funds to purchase a house. Home ownership there is currently in excess of 87%, significantly higher than in Australia. Of course, Singapore has much higher rates of contribution, both from employers and employees.

So, here are some other ideas that senior people in the sector have raised as issues - not all of which I endorse - but which we could and should discuss.

First, would Australians be willing to have higher rates of employee contributions - and that means lower take home pay - to ensure more certainty in their retirement incomes? What is the right balance between spending now and providing for the future?

Or should we take the opposite stance and allow people to contribute without limit, but tax them on their withdrawals when they eventually start taking cash out? The argument put to me is that the existing system has operated to give the baby boomers enormous tax advantages that are probably not justified.

Secondly, are we willing to make temporary changes to the rate of contribution to superannuation as an additional means of controlling the economy? Currently, if the RBA is worried property prices are rising too fast, they increase interest rates. That might deter buyers from paying too much, but it squeezes businesses and puts people out of work. It also increases the money that people pay away to banks, and increases the amount they have to pay to own their home.

Temporarily increasing employee contribution rates could control house price increases without pushing up the cost of living, or squeezing people out of jobs.

Another suggestion is to free individuals from the regulatory stranglehold of the financial institutions, and give them more control over their superannuation decisions. Under this proposal, the government would build an electronic superannuation supermarket through which people could make contributions, and where they could invest in funds of their own choosing.

Currently their financial institutions profit handsomely by levying people for these services, when the necessary administration could be put online and provided for free.

There are no doubt many other suggestions which need to be debated as well.

These all form part of the superannuation reform debate we have to have.

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