After weeks of speculation and throw-away comments, the federal treasurer has officially discussed superannuation in the context of housing affordability, sparking fresh concerns that he will be using superannuation to help first home buyers get into the market in the upcoming budget.
In the lead-up to the release of the federal budget in May, Treasurer Scott Morrison has made it clear that housing affordability will be a headline item on the government’s agenda.
Allowing first home buyers to access their super to fund a property purchase has been rumoured to be on the government’s agenda, although the treasurer has yet to come forward with anything concrete on the matter.
However, in an address to the Australian Housing and Urban Research Institute earlier this week, Mr Morrison made note of some links between superannuation and housing in retirement.
“It is concerning that the decline in home ownership and increase in mortgage costs has been most pronounced in family-forming households and that Australians are increasingly carrying into their retirement larger mortgage debts or are renting,” he said.
“The proportion of home owners aged over 45 with a mortgage has increased and, according to the Productivity Commission in 2015, the most frequent use of superannuation lump sums was to fund housing, including paying down mortgages.”
He also noted Saul Eslake's recent report, which said it is likely that an increasing proportion of new retirees will use some or all of their superannuation to pay off their mortgages.
“These are the facts and they represent a problem that needs to be addressed in the broader national interest,” Mr Morrison said.
Mr Morrison’s latest comments have been, again, met with backlash from the superannuation industry.
Industry Super Australia director of public affairs Matt Linden said diverting super for housing deposits would increase prices and cripple super returns.
“The super system relies heavily on compound interest over a member’s lifetime to drive adequate retirement outcomes, dipping into super when balances are still relatively low will have negative effects on member’s ability to grow their balance and also lead to lack of diversification in their savings.
“The housing affordability crisis will not be resolved by damaging the superannuation system.
“It doesn’t matter how the policy is dressed up to make it seem more acceptable, it’s simply a bad policy.”
SUBSCRIBE TO THE SMSF ADVISER BULLETIN
- 17 Aug 2017Industry questions ATO’s capacity for new reportingBy Miranda Brownlee
- 17 Aug 2017Qld succession law changes tipped to impact SMSFsBy Miranda Brownlee
- 16 Aug 2017Contribution limits restricting future balances, warns mid-tierBy Staff Reporter
- 16 Aug 2017SMSF firms underprepared for events-based reportingBy Miranda Brownlee
- 15 Aug 2017SMSF auditor disqualified for misconductBy Staff Reporter
- 15 Aug 2017Class gains market share in financial year resultsBy Staff Reporter
- view all
- Industry questions ATO’s capacity for new reporting
With events-based reporting set to generate huge amounts of data, concerns have been raised about whether the ATO’s systems will be able t...read more
- Contribution limits restricting future balances, warns mid-tier
Clients hoping to accumulate a superannuation balance of $1.6 million by age 65 will need to start taking full advantage of concessional con...read more
- SMSF firms underprepared for events-based reporting
A straw poll has revealed that the majority of SMSF firms currently feel their firm is not equipped to deal with the proposed events-based r...read more
- view all