Australia’s superannuation industry has signaled it will fight hard against any move to permit first home buyers (FHBs) to access their superannuation to fund a housing deposit, as speculation mounts that the Turnbull Government will include such measures in the upcoming May Budget.
Late last month, Industry super funds chief economist, Stephen Anthony, claimed such a policy would reduce retirement savings, drive up housing prices and do nothing to address supply, and instead called on the government to focus “on land release, regulation and tax subsidies that fuel investment in existing property rather than new buildings”.
Today, Financial Services Council CEO, Sally Loane, has also slammed the policy. From The ABC:
“Withdrawing superannuation savings to buy a house — especially when house prices appear to be at the high end of the cycle in the major states — will not help first home buyers into the market,” she said in a statement.
“It will only further fuel the increase in house prices…
Labor is also strongly opposed to allowing FHBs to access their housing to purchase a home. Last month, shadow treasurer Chris Bowen labelled it a “stupid idea”. And today, he has repeated the medicine. From The AFR:
“Scott Morrison will stop at no stupid idea to avoid taking action on negative gearing and the capital gains tax discount,” shadow treasurer Chris Bowen said.
“Michael Sukkar couldn’t rule out adopting the silly early access to super for a housing deposit idea that Liberal Party backbenchers like to raise each and every year.
“It won’t help home buyers, it will just help make housing more unaffordable.”
It’s worth pointing out, yet again, that Malcolm Turnbull in 2015 also labelled the super-housing proposal “a thoroughly bad idea”.
Canada’s Garth Turner, who oversaw the introduction of a housing-super system in Canada in the 1990s, has also admitted that it was a massive mistake – placing further upward pressure on Canadian house prices and putting at risk retirement savings – and strongly cautioned Australian policy makers against such a move.
Australia needs genuine policies to tackle Australia’s affordability woes that seek to reduce demand via tax reforms, cutting immigration and restricting foreign buyers, as well as freeing-up land supply and planning.
What we definitely don’t need is more demand-side stimulus that would make the affordability situation even worse, cost the Budget a fortune, and place Australia’s retirement system at risk.
