Dad’s Army’s Robert Gottliebsen (“Gotti”) has once again backed former Treasurer Hockey’s proposal to allow young home buyers to raid their superannuation accounts to purchase their first home:
My greatest concern, longer term, is that vast numbers in the generation aged from 25 to as high as 40… have been robbed of their greatest retirement investment — a dwelling. They, understandably, have an inner frustration which is turned on the older generation. We need to bring them back into the system because in its current form they see superannuation as useless and a plaything of the wealthy. And they have a good argument.
The only way to do that is to allow first home buyers to use the first $50,000 of their superannuation to invest in a dwelling….
A sound argument against using superannuation as a housing deposit is that it would simply lift the price of housing and first home buyers would be no better off.
In isolation that argument is totally correct, so there has to be another adjustment to compensate. Houses are being pushed up by Asian buying and negatively geared Australians, many of whom are turning their backs on superannuation because they do not trust the rules. The compensating force must be an adjustment to the negative gearing rules to prevent a further escalation by the superannuation change…
Here’s a novel idea. Rather than applying a band aid solution allowing young people to further pump demand by using their superannuation as a housing deposit, how about we address the root causes of unaffordable housing, namely: tax lurks (including both negative gearing and the CGT discount); supply-side constraints; money laundering into, and foreign buying of, established dwellings; loose capital rules; and over-investment by super funds?
It’s not rocket science.
