First home buyers saving in super “badly designed and ill-thought out”: Chris Bowen

Labor Shadow Treasurer Chris Bowen has called the plan to allow first home buyers to save a deposit using superannuation “highly objectionable” and counter-productive.

The Government proposed in the 2017 Budget that first home buyers be able to contribute up to $30,000 to superannuation, which could later be withdrawn for a deposit.

“I don’t think these people will be too excited about the prospect of putting $30,000 into their superannuation as the solution to their housing challenge,” said Mr Bowen, in his post-Budget address to the National Press Club.

“We know the Government dabbled with all sorts of hair brained plans to allow access to superannuation.”

“The eventual model they settled on, allowing voluntary contributions to be withdrawn by first home buyers will not make a jot of difference for the vast majority of first home buyers.”

He said the plan is “badly designed and ill-thought out,” and, without changes to negative gearing and supply-side reform, if it has any impact at all it will be to drive up prices.

Mr Bowen also raised administrative concerns and issues with the, as yet unlegislated, objective of superannuation.

“How voluntary contributions will be kept distinct from compulsory contributions in a downturn when balances can contract is beyond me.  They can’t be.”

“The Government supports a legislative objective for superannuation, as recommended by David Murray.  Their preferred objective is: “To provide income in retirement to substitute or supplement the age pension”.”

“The whole idea of an objective is to have a benchmark against which proposed changes to super can be judged. And yet the Government’s first proposed legislative change since announcing their preferred objective would undermine the goal of providing income in retirement.”

“Labor will oppose this ill thought out and counter-productive plan.”

Note that, as of 1 July 2017, the First Homer Super Saver Scheme has not been legislated, and there are questions over if it will pass the Parliament when it is introduced.

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