Industry Super Australia has expressed “serious concern” over the proposal to allow first home buyers to use super to save for a deposit.
ISA chief executive David Whiteley said the proposal is “deeply flawed” and a threat to workers’ future retirement.
“The plan is contrary to the sole purpose test for superannuation by allowing withdrawals from super other than retirement,” he said.
“If implemented, the policy is likely to be expensive to administer and will impact the ability of fund trustees to invest contributions over the long term.”
“Funds will need to maintain more liquid asset allocations to deal with unpredictable withdrawals.”
“There is merit in assisting first home buyers, but this is not the way.”
Mr Whiteley also questioned the plan to allow some people who downsize their home to make extra contributions to super.
“Older Australians are unlikely to take this up in great measure as the proceeds will be counted in the pension assets test,” he said.
The merger of the Superannuation Complaints Tribunal with the Financial Ombudsman Service and the Credit and Investment Ombudsman was also a “concern”.
“Superannuation is highly complex, not just another financial product to be lumped in with credit cards and mortgages. This new body will be overseen by ASIC with significantly less funding than the current Tribunal which today struggles to properly service consumers,” Mr Whiteley said.
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.