The political campaign to use more of our superannuation savings for housing deposits has continued over the Christmas period, culminating in an unofficial complaint to the Australian Taxation Office.
The latest fight erupted on Monday morning after Liberal MP Tim Wilson took to Twitter to encourage people struggling to save a deposit to withdraw cash via the early super access scheme, which was designed to help people suffering from financial hardship as a result of COVID-19.
Mr Wilson said, until December 31, people had the chance to access their superannuation savings to bring forward their housing purchase.
But Labor MP and shadow assistant treasurer Andrew Leigh responded on Twitter by asking the ATO, which administers the scheme, if Mr Wilson was “encouraging people to break the law by accessing super to buy a home”.
This is because the ATO says the scheme, which has allowed eligible members to withdraw up to $20,000 from their superannuation in two tranches of up to $10,000, is reserved for people who “have been adversely financially affected by COVID-19”.
“[The tweet] was a suggestion that people use the money in order to break into the housing market,” Dr Leigh told The New Daily, while noting it contained no reference to the scheme’s eligibility criteria.
“That’s not the reason why early release super was designed.”
Dr Leigh said it was “a bit rich” for Mr Wilson to lobby for relaxed superannuation access for first-home buyers, given for many years he had “campaigned against tax changes which would improve housing affordability, such as reforming negative gearing and capital gains tax”.
“If you had a mass super for housing scheme, then all it would do is inflate prices. It’s not a systematic fix,” Dr Leigh said.
“It’s simply asking people to impoverish themselves in retirement in order to break into an overheating housing market.”
Meanwhile, Labor MP and shadow health minister Chris Bowen also questioned on Twitter whether Mr Wilson had breached regulations over the provision of unlicensed financial advice.
“Mr Wilson is giving financial advice here. Unless he is a trained and licensed financial adviser he has some explaining to do,” he said.
“The rules state early access is for hardship, not a house deposit. He has advised people to act in breach of the rules.”
At the moment, the early super access scheme is only available to citizens or permanent residents of Australia or New Zealand who meet one of the following criteria:
- Are unemployed
- Are receiving JobSeeker, Youth Allowance, Parenting payment, Special Benefit or Farm Household Allowance
- Were made redundant, had their working hours reduced by at least 20 per cent, or saw their turnover as a sole trader fall by at least 20 per cent on or after January 1, 2020.
The second phase of the scheme started on July 1 and is due to expire on December 31, with data from the Australian Prudential Regulation Authority revealing that members had withdrawn $35.8 billion from their superannuation as of December 13.
That is much more than the $29.5 billion Treasury initially forecast, but less than the $42 billion it had anticipated in July.
This means that information provided to the ATO is initially accepted as being true, and misuse of the scheme is only discovered after the fact through auditing.
The ATO has threatened members who misuse the system with fines of up to $12,600. But it has yet to issue any financial penalties related to the scheme.
Mr Wilson’s tweet comes roughly a month after he launched a campaign calling for home ownership to be prioritised above superannuation, promoting the campaign on social media under the banner #HomeFirstSuperSecond.
His ideas were backed by former Reserve Bank governor Bernie Fraser but criticised by many economists, who said using super for housing would inflate prices by boosting demand without increasing supply.
The New Daily approached the Australian Taxation Office and Mr Wilson’s office for comment.
The New Daily is owned by Industry Super Holdings