The Coalition has announced plans to allow first-home buyers to use superannuation to purchase a property, a move criticised by the industry.
Speaking in Brisbane, Prime Minister Scott Morrison announced the Super Home Buyer scheme would let first home buyers use up to $50,000 of their super towards buying a home.
The scheme would begin on 1 July, 2023, if Morrison was successful in the election, and buyers needed to have saved 5% of their deposit separately and live in the home for 12 months.
However, industry experts said it would undermine the whole purpose of using superannuation to save for retirement.
Blake Briggs, chief executive of the Financial Services Council, said: “The FSC is concerned the Government’s proposal weakens the sole purpose of superannuation, which is to provide higher standards of living in retirement.
“The FSC recognises there is a correlation between renting in retirement and poverty amongst older Australians, but Australians should not have to choose between a home and their retirement savings.
“The Government has an obligation to do more to boost supply, otherwise unleashing superannuation savings on the housing market risks driving prices higher still.”
Glen McCrea, deputy chief executive at the Association of Superannuation Funds Australia (ASFA), said: “The early release of superannuation for housing is not a panacea, is not in line with the objectives of the system and will have long-term consequences for retirement incomes”.
He said ASFA research from 2021 had found early release of super for housing was inconsistent with the central principles of super and would be ineffective in improving housing affordability and increasing home ownership and would lead to higher house prices.
The Australian Institute of Superannuation Trustees (AIST) said it was “very concerned” about the proposal.
“Accessing super early won't get first home buyers closer to their dream home or fix Australia's housing crisis. Using super as a deposit will drive up property prices, leaving Australians with higher debt and depleted retirement savings.
“First home buyers are being asked to choose between a home and saving for their retirement, they should be able to have both. The Australian Government must address this modern-day inequity by addressing supply issues rather than raiding super. A first home should not come at the expense of dignity in retirement.
“Superannuation was established to provide support for Australians in retirement and it is not a piggy-bank the Government can open at its convenience to avoid dealing with the real systemic issues facing first home buyers.”