Govt's super for housing policy not off the table
Following the criticism it received over the idea of accessing superannuation for housing, the government may fine-tune the scheme in an attempt to make it “palatable”, says the Institute of Public Accountants.
The IPA’s Tony Greco says the government often floats ideas in the lead-up to the federal budget, and it is likely it was serious about allowing first home buyers to access super.
“[However] because of all the criticism, there haven’t been too many supporters so it’s probably had to go back and rethink how it could address all the concerns,” Mr Greco said.
“Due to all the criticism, they might have to fine-tune it or dispel the whole proposal. It’s not unusual for them to float some ideas, test the reaction and then regroup and have another think. So that’s what’s happened. They’ve floated their ideas and there hasn’t been any shortage of commentary on the proposal.”
Some of this fine-tuning could involve placing limits on the extent to which superannuation could be accessed.
“There’s probably a lot of fine-tuning that they could do to the proposal to make it palatable – ways that reduce its use for housing as opposed to retirement,” Mr Greco said.
“It’s like negative gearing, there are so many levers you can pull. You can quarantine the losses, you can limit it to one rental property, these are the proposals, but then there are many levers within the proposals that can be tweaked, so there’s different ways to skin a cat.”
If the government plans to dismiss the idea completely, it may look at potentially limiting the number of properties people can negatively gear, something Treasurer Scott Morrison is considering, Mr Greco said.
“Another one is the capital gains concessions, [looking at] the amount of discount that applies to the capital gain that is taxed at someone’s marginal tax rate.”
Mr Greco stressed the importance of the government implementing a holistic and broad approach to housing affordability.
Meanwhile, IPA chief executive Andrew Conway said while all variables and options should be explored, any discussion of accessing superannuation for the purpose of entering the housing market needs to be approached with caution to ensure the true objective of super – “to provide income in retirement to substitute or supplement the age pension” – is not lost.
Mr Conway said the government needs to consider “land supply problems in Sydney, giving time for APRA’s macroprudential levers to take effect, dealing with the over-reliance of state governments on stamp duty revenue, responsible lending by banks, responsible borrowing by consumers, a greater focus on financial literacy, getting over the ‘fear of missing out’ and dealing with the impact of foreign investors”.