Super industry unites to oppose super for home loans

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.

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“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.

 




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Absolutely correct. Young people should not be able to access their measly super accumulated funds at an early age.
Instead, force them to borrow at interest rates that provide massive profits instead to the lenders.
And while the money sits in the super funds, it generates FUM and massive fees to support the huge staff and management regime. Yep, just keep screwing over the public instead of helping them.
Treat them like mushrooms and give no control or say over their own money. Not even education.
What hypocrites!

Sounds like we are kicking a problem down the track

Most of that said in the above is valid and and has merit. However bear in mind that the info therein comes from a biased point of view of self interest and revenue for the super providers etc

But its perfectly OK to allow super to be used for hardship provisions & fat band surgery. Give me a break. The vested interests here is stultifying. The best thing for super is to allow a minimal $10,000 refundable home deposit scheme - you will clean up "lost super" within a year. But that's too advanced for some to get their minds around. They would rather see billions swallowed up by Consolidated Revenue, than have a few hundred million be used for home deposits. lol

Very True

Oppose of course otherwise they lose their commission on super investment.
Some of the fund are charging more for fees & commission then actual return they generating.

.......not all funds are opposed to this. In fact one of the largest funds has been working closely with state and fed govt on a number of housing affordability initiatives. This is a significant policy issue, ensuring our essential service workers (ambos, teachers, police, nurses...) can live within a reasonable distance of their workplace. Further, owning a home in retirement is absolutely critical to ensure additional pressure is not placed upon the age pension. However the accessing of super for deposits is no silver bullet, a refresh on land development policy is also critical to get right because we cant ask a family to live in one of the thousands of 1BR apartments that are filling our cities!

The use of retirement savings pre-retirement works well in Singapore. Maybe the government could look at how that works. Essentially they borrow against their CPF (the equivalent of our super) to fund the purchase of their home. This is then repaid with interest to the fund if the property is sold.

EXTRACT FORM CPF SITE

''How much do I need to refund to my CPF upon the sale of my HDB flat?

If you have used your CPF savings to finance your HDB flat, you will have to refund to your CPF:

the principal CPF amount (P) which you have withdrawn for the HDB flat; and
the accrued interest (I) which you would have earned if the savings were not taken out from your CPF account.
If you are 55 years old and above, and have pledged your property to withdraw your Retirement Account (RA) savings in cash, you will need to refund the pledged amount on top of the P and I. The amount refunded to your CPF account will be used to meet your Full Retirement Sum in your RA. After this, any balance housing refunds will be paid to you in cash.

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