Paul Keating has accused the Liberal Party of trying to destroy superannuation by breaking the preservation rule to allow super to be put towards housing, in an opinion piece published by Fairfax media.
It appears support is growing within the government for superannuation to form part of a housing affordability package to be announced in the Budget, or possibly earlier.
Keating said putting superannuation towards housing would “rob” the young of retirement savings through lost compounding returns while also increasing the price of housing.
“So were the government to proceed with this irresponsible idea, it would potentially destroy superannuation for those, in the main, under 40 years of age, while at the same time, driving up the cost of the housing they are seeking to purchase.”
Keating labels the idea both “scandalous” and “ideological”, accusing the Liberal Party of trying to destroy universal retirement coverage through superannuation. He says only a “reckless” government would put the super system at risk by breaching the preservation rule.
“More than that, once the preservation rule has been breached, the whole investment system would be compromised as superannuation trustees were required to make provision for short-term withdrawals from an otherwise, fully preserved system. This would be completely disruptive to professional funds management.”
At the same time consideration is reportedly being given to this policy idea there is a Bill before the Parliament to set in legislation objectives for superannuation.
“So, one minute, the government is putting superannuation as a savings vehicle on a pedestal, the next minute, it is seeking to pull the backside out of it,” said Mr Keating.
“But almost as bad as the proposed measure itself is the policy bankruptcy.”
“How could a country which would wilfully do this to itself have any prospect of rational policy frameworks?”
Treasurer Scott Morrison was asked in a press conference what he made of the criticisms by Mr Keating, answering: “I’ll leave his comments to your own analysis. What I’m focused on as we prepare the Budget is to deliver a package of measures that can reduce the pressures on Australian families who are looking to buy a house or looking to rent a house, who are looking to have more affordable access to housing in this country.”
The Treasurer was also asked in Question Time if concerns about such a policy had been raised with him. He answered: “For that to be an issue, the government would actually have to have a proposal along those lines. We have no such proposal along the lines that the shadow Treasurer has referred to. All matters relating to housing affordability will be addressed in the budget, which is a couple of months away.”
Paul Keating also accused the Liberal Party of trying to destroy superannuation when similar ideas were raised by then-Treasurer Joe Hockey in 2015.
Though it has been noted that it was ALP policy to allow superannuation to be withdrawn for a home deposit.
ALP’s 1993 Election Platform, launched by Paul Keating, promising access to super for housing deposits pic.twitter.com/WkRuRQG2xU
— Stephen Murray (@smurray38) March 19, 2017
The notion of super for housing was only killed off on 19 April 1994 – two years and 2 months after it had first been raised in Cabinet pic.twitter.com/hY4cuENvsl
— Stephen Murray (@smurray38) March 20, 2017