Finance Your Super Outrage at ‘really dumb’ resurrection of super-for-housing idea
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Outrage at ‘really dumb’ resurrection of super-for-housing idea

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Many fear higher house prices and lower retirement savings. Photo: Getty
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Reports that the government is again considering hacking into superannuation to solve the housing crisis have angered experts and regular Australians alike.

Anonymous sources within the Coalition have leaked to the ABC, The Australian and others that the plan is still in play, despite Treasurer Scott Morrison previously saying the government had no such proposal.

ABC political reporter Andrew Probyn reported Monday night that the proposal was being actively investigated for inclusion in the May budget.

Liberal backbench MP John Alexander, a vocal member of the advisory panel formulating the government’s housing affordability package for the May 9 budget, is known to be fighting for the idea. He is supported by fellow backbenchers Tony Abbott, Craig Kelly and Tony Pasin.

Assistant Treasurer Michael Sukkar wouldn’t rule it out in an interview with Sky News on Tuesday. He said the government is “pretty keen to examine measures that can bridge [the deposit] gap and allow first home buyers to get into the market as soon as possible otherwise the goal posts keep shifting”.

The super-for-housing idea, as commonly understood, would allow prospective first-time buyers to put their super savings toward a deposit. This would be in keeping with Mr Sukkar’s “keen” focus on removing the first hurdle to home ownership.

Treasurer Morrison told a conference on Monday it now takes eight years to save for a home deposit in Sydney and six years in Melbourne.

However, experts are horrified, as are many Australians, that super savings could be tapped in an attempt to solve this problem.

Economists, academics and even former PM Paul Keating, the godfather of compulsory superannuation, have all warned it would push up prices, expose the savings of Australians to a undiversified asset, erode their income stream in later life, and push up the cost to taxpayers of age pensions.

In fact, Malcolm Turnbull once dismissed it as a “thoroughly bad idea” and Finance Minister Matthias Cormann warned it “will not improve housing affordability” when it was floated during the Abbott years.

On Tuesday, Opposition Leader Bill Shorten described it as a “raid” on super. “Most young Australian’s don’t have much super at all,” he told a press conference.”

This is borne out by a recent report that estimated the average Australian aged 25-29 had only $16,000 in super in 2014.

Mr Shorten also noted, as many experts have done, that the “secret” of superannuation is compound interest. Theoretically, thousands of dollars could be lost in retirement if a worker’s capital is eroded early in their working life.

“If you raid that superannuation when it is in very small amounts at the start of people’s careers, you just won’t have enough super to retiree on,” he said.

“If the government wants to do something about housing affordability, rather than raid superannuation and starve people of income in retirement, you need to reform negative gearing in capital gains tax deduction.”

 

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