The FPA, AFA and SMSF Association have responded to measures in the federal budget that would allow first home buyers to access their superannuation, with some criticising the initiative.
The government announced the First Home Saver Scheme yesterday, which allows first home buyers to make contributions of $15,000 per annum and $30,000 in total within existing contribution caps to their superannuation funds to help them purchase their first homes.
AFA chief executive Philip Kewin welcomed the measure.
“Purchasing a home is an important step in wealth creation and the AFA congratulates the government on the establishment of the scheme and potentially making home ownership more achievable for more Australians,” Mr Kewin said.
“But this comes with quite a marked change in the required investment approach, with a ‘dual’ investment strategy of short-term funding for housing, and long-term funding for retirement.
“Understanding these principles and ensuring the right investment strategy is in place is critical and requires professional advice. These issues have again highlighted the need for professional financial advice to be tax deductible and the AFA will continue to call on the government to legislate this.”
SMSF Association chief executive John Maroney also welcomed the initiative, saying “it is important to note that only the extra voluntary contributions and associated earnings can be withdrawn, not a person’s compulsory super contributions made by their employer”.
“This scheme offers superannuation funds, including the SMSF sector, an excellent opportunity to engage younger fund members in their superannuation,” he said.
“The first home buyers’ proposal strikes the right balance between encouraging young people to save for a first home deposit in a concessional tax environment, but also protecting their retirement savings for the longer-term.”
FPA chief executive Dante De Gori said while the FPA supports initiatives to make housing more affordable, accessing super is not the solution to the affordability issue and is not in the national interest.
“Our members, who provide advice to millions of Australians, are concerned that changes that reduce retirement savings for future retirees, will only add extra pressure to the age pension,” he said.
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