In the lead-up to the 2017 budget, the Association of Superannuation Funds of Australia has called on the government to consider ways in which superannuation capital can be used to address housing affordability.
ASFA chief executive Martin Fahy says given right settings there is the potential for Australian superannuation funds to provide high-quality, affordable supply with greater certainty of tenure for renters.
“Superannuation has a long-term investment horizon, so access to a diversified, visible and consistent rental income stream is appealing on the face of it,” Mr Fahy said.
However, he said the current return profile of the sector makes it largely unviable for funds, who seek the highest possible, risk-adjusted returns for their members.
“Capital gain expectations entice ‘mums and dads’. However, high prices and low yields have proven a poor recipe for attracting professional investors with fiduciary obligations.”
In order to unlock institutional capital and re-shape the market, Mr Fahy said policy changes that improve risk-adjusted returns for these investors are needed.
“Land tax exemptions, making public land available at a discount to market value and contributing to the development of public space and amenities are examples of steps that could be taken to encourage institutional investment and increase suitable market supply.”
The ASFA is also supportive of proposals to develop an affordable housing bond aggregator model and improve incentives for retirees to downsize their family home.
“To encourage Australians to live better in retirement, we need to think about how we monetise the family home in a considerate fashion,” Mr Fahey said.
“Innovative public policy settings that improve incentives to downsize should be applauded.”
The ASFA is also calling on the government to enable the ATO to reunite lost super accounts with a member’s active account to ensure consumers get the benefit of compounding and thousands of extra dollars in retirement.
It is also calling for $10 million per year extra for the ATO to undertake audits to improve SG payment compliance by employers and better resourcing for the Superannuation Complaints Tribunal.
SUBSCRIBE TO THE SMSF ADVISER BULLETIN
- 08:20Industry questions ATO’s capacity for new reportingBy Miranda Brownlee
- 08:00Qld 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