Former prime minister Paul Keating has slammed Treasurer Joe Hockey’s suggestion of opening super to first home buyers, labelling it a “horror story” that could destroy universal retirement savings.
Allowing early access to superannuation would amount to the “wilful destruction” of Australia’s retirement system, Mr Keating told Fairfax Media.
“The key to wealth accumulation in retirement savings is compound earnings. It is the earnings on the earnings plus new weekly capital commitments that allow superannuation accumulations to roughly double every seven to eight years,” he said.
“Such growth in the asset base could not happen if people were permitted to take funds for convenience, thereby diminishing the asset pool and its capacity to compound.
“This would especially be the case for younger home buyers who would typically have a relatively modest pool of superannuation savings from which to draw.”
As reported earlier this week, the superannuation industry has also hit back at Mr Hockey’s suggestions.
The SMSF Association’s Graeme Colley questioned whether first home buyers would have a substantial enough home deposit in the super fund, while the Association of Superannuation Funds of Australia’s chief executive Pauline Vamos said the move would largely benefit high-income earners.
“Pumping another source of funds into an already overheated property market only benefits those selling properties,” added Quantum Financial principal Tim Mackay.
“How on earth will [the] resulting increased house prices benefit younger people? Politicians sharing their thought bubbles in super does nothing for consumers’ confidence in the super system,” he told SMSF Adviser.
SUBSCRIBE TO THE SMSF ADVISER BULLETIN
- 21 Aug 2016Risks flagged with real estate appraisal valuesBy Miranda Brownlee
- 21 Aug 2016Lawyer challenges ATO view on two fund strategiesBy Miranda Brownlee
- 18 Aug 2017ATO locks in details, addresses panic on real-time reportingBy Katarina Taurian
- 18 Aug 2017Data feeds unreliable for new reporting, says mid-tierBy Miranda Brownlee
- 18 Aug 2017Tax component confusion spurs potential tax liabilitiesBy Miranda Brownlee
- 18 Aug 2017Contributions triple in June quarter, survey showsBy Staff Reporter
- view all
- ATO locks in details, addresses panic on real-time reporting
The tax office has addressed several points of confusion with the new events-based reporting regime, locked in key deadlines, and outlined w...read more
- Data feeds unreliable for new reporting, says mid-tier
With an estimated 20 per cent of SMSFs still encountering errors from data feeds, one mid-tier firm believes the ATO should allow SMSF pract...read more
- view all