The Senate’s inquiry into the retirement system has been extended for 12 months and will now run until June 2025.
The inquiry’s terms of reference have also been expanded, and it will consider how superannuation can be used to increase home ownership.
The inquiry is chaired by Liberal Senator Andrew Bragg, who contends that Australians should be able to use their super to buy a home while still working, rather than waiting until they reach the super preservation age to pay down a mortgage.
Bragg also suggested that people should be allowed to pay their super into a mortgage offset account.
“Because in the absence of the bank of mum and dad, a lot these people will never be able to get into the housing market”, Bragg said.
“I want Australians to own their own houses as soon as they can. And we know the key determinant for success in retirement is your home ownership status, not your super balance, so … if people have faster access to owning a house, that’s good”.
“A lot of Australians are getting to preservation age and using their super to pay down their mortgage”.
“Why are we forcing people to pay all this interest to banks, if their own money could have retired their mortgage in earlier years? It just seems like warped thinking – I’m trying to unwarp this world of vested interests”, he said.
Andrew Bragg suffers from what economists call the “fallacy of composition”.
That is, if you allow a single person to use their superannuation to purchase housing, it will boost their buying power and allow them to enter the market earlier.
However, if everyone is allowed to use their superannuation to buy housing or pay down their mortgages, home prices will increase, worsening affordability for everyone.
This is true of all demand-side housing measures, such as first-home-buyer grants. They drive up home prices and are largely self-defeating from an affordability perspective.
Meanwhile, Australians will end up sacrificing their retirement savings for no real benefit, making them even more reliant on the aged pension in their golden years.
If Andrew Bragg genuinely cared about housing affordability and home ownership, he should argue for lower levels of immigration, alongside an unwinding of tax breaks to property investors.
Because, Australia’s housing market is currently an immigration and taxpayer-fueled Ponzi scheme, which would only worsen if superannuation was thrown into the mix.
