Liberal MP Tim Wilson has previously urged for early super access to allow young people to enter the housing market, but JanecHume, Minister for Financial Services, Superannuation and the Digital Economy, shut down the idea when asked about it.
“At this stage there is no plan to allow Australians to access a deposit for their home through superannuation,” Ms Hume commented during a Sky News interview.
“Superannuation is to save for your retirement, we want to make sure Australians have the best retirement outcomes possible.”
“That’s a no then, that’s a no then, minister,” presenter Peter Stefanovic retorted.
“Your words, that’s right,” she answered.
Industry Super Australia has warned allowing superannuation savings to be funnelled towards the housing market would supercharge house prices and leave young people with smaller balances to retire on.
Bernie Dean, chief executive of Industry Super Australia, commented that Treasurer Josh Frydenberg and Prime Minister Scott Morrison should back up the minister in pouring cold water on Mr Wilson’s proposal.
“This proposal would jack-up house prices, inflate young people’s mortgages and add billions to the aged pension, which taxpayers have to pay for,” Mr Dean said.
“But the MP pushing this proposal says the house hike is secondary. It might be secondary for politicians who have multiple investment properties and are pocketing 15 per cent super, but it sure isn’t for these young Australians who, under his scheme, will be staring down the barrel of hugely inflated mortgages without any super savings to fall back on.
“We need sensible solutions – like boosting the supply of affordable housing which will bring prices down and get young people into a home in a way that doesn’t lumber workers with higher taxes in the future.”
What they’re really saying is they don’t want to miss out on their 15% tax from super. God forbid they actually allow people to use their own money for their own choices/purposes like some other countries allow. A primary residence – especially a first home – can be one’s biggest investment. Given the fact many downsize ahead of or in retirement, and then have the option to funnel some of the surplus back into Super should be sufficient to allow its use for such purposes. But again, given there’s no tax on one’s primary residence vs a 15% tax on earnings from one’s Super shows the true concern the government has.
There is currently an arrangement in place that allows young people to access money from their super to put towards a home deposit. It is called the First Home Super Savers scheme. This seems to have been forgotten in all the noise. If people plan ahead, the First Home Super Savers scheme can be a useful tool to help with saving for a home deposit.
Though given the cost of housing, the amount you’re able to save using this method doesn’t help a lot in many situations. Not to mention the fact that it still relies on additional surplus savings abilities.