Industry Super Australia has “slammed” the suggestion that first home buyers be able to access their superannuation early as ‘bad policy’.
It has been reported in the News Corp papers that the Government is considering allowing first home buyers to withdraw from their employer super contributions, possibly to the extent they’re made voluntary contributions, to put towards a home deposit. Apparently this would form part of a housing affordability strategy to be included in the 2017/18 Budget.
Industry Super Australia (ISA) Chief economist Stephen Anthony said this could reduce retirement savings while driving up house prices and doing nothing about supply.
“In the housing affordability debate, the focus should be on land release, regulation and tax subsidies that fuel investment in existing property rather than new buildings,” he said.
“Allowing first home buyers early access to their super will set back a retirement income system that is still struggling to fully deliver.”
“It’s simply bad policy.”
The policy would also be inconsistent with the Government’s proposed legislative objective for superannuation – to provide income in retirement to substitute or supplement the age pension – which is currently before the Parliament.
This is not the first time members of the Coalition have raised the option of putting superannuation towards housing. In 2015 then treasurer Joe Hockey suggested it, which seemed to find support amongst some Liberal party and Nationals members. Though, at the time, Malcolm Turnbull said it was a “thoroughly bad idea”. Coalition members also raised the option with Treasury officials as part of the House of Representatives inquiry into home ownership. The Treasury officials warned that increasing the amount of money available for deposits could further push up house prices.