Rumours that the Government may use the May Budget to allow people to access their superannuation to place a deposit on a new home has succeeded in uniting all sections of the superannuation industry in vehemently opposing such a step.
All sectors of the super industry from Industry Super Australia (ISA) to the Financial Services Council (FSC), the Association of Superannuation Funds of Australia (ASFA) and the SMSF Association have criticised the proposal.
FSC chief executive, Sally Loane said she was deeply concerned by the reports adding that withdrawing superannuation savings to buy a house – especially when house prices appear to be at the high end of the cycle in the major states – would not help first home buyers into the market.
“It will only further fuel the increase in house prices,” she said.
“We do not support diluting people’s retirement nest eggs to solve a housing affordability problem,” Loane said.
SMSF Association chief executive, Andrea Slattery said her organisation remained emphatic in its opposition to superannuation being used to assist first home buyers enter the property market.
“It’s been our long-held position that allowing people to tap into their superannuation to assist them acquire their first home is bad public policy,” she said. ““Although it is tempting to view superannuation savings as a tool for fixing policy problems, it is essential that superannuation is maintained to meet its sole policy purpose – to give people security and dignity in retirement.”
Industry Super Australia chief economist, Stephen Anthony was also strongly critical of the rumours, claiming it was ‘bad policy’ to suggest that young people access their superannuation to buy their first home.
“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. “This proposal could reduce retirement savings and drive up housing prices while doing nothing to address supply”.
“The proposal is also inconsistent with the Government’s objective of super announced in 2016, which is “to provide income in retirement to substitute or supplement the Age Pension,” Anthony said.