Using super for housing would just transfer wealth, says Cormann

Allowing people to access their superannuation for housing would increase demand and risk simply transferring wealth from people saving for retirement to people selling properties, says Minister for Finance Mathias Cormann.

The Minister was asked on Sky News what he thought of the recently raised option of allowing first home buyers to access their super.

“Housing affordability is caused by the dynamic in the market where demand exceeds supply. You don’t improve the affordability, of anything for that matter including housing, by boosting demand,” answered Cormann.

“If you enable people to access their super in the circumstances you describe, you enable more people to enter the housing market more quickly, then you are boosting demand and to the extent that there is a housing affordability issue that would make the problem potentially worse, all other things being equal.”

“The risk is that if you boost demand and you increase prices by more, then you end up with a wealth transfer, effectively, from people who are saving for their retirement to people who are selling their properties. I have long been on the public record in relation to this issue. There is a lot of speculation, there is a lot of discussion but don’t make the wrong assumptions.”

The Treasurer, Scott Morrison, was also asked about such proposals, but said he wasn’t “speculating on the Budget”.

The Government is reportedly considering including some form of access to super for first home buyers in the housing affordability package which will be a key part of the upcoming Federal Budget. The PM was apparently “actively considering” a shared-equity model. Assistant Treasurer Michael Sukkar has said that allowing first home buyers to access super would need to be balanced by measures to increase supply.

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