Industry Super Australia (ISA) has warned that allowing Australians to access their superannuation to pay for a house will only put upward pressure on prices while imposing extra costs on taxpayers.
ISA warned that allowing access to superannuation for purchasing a house could see prices skyrocket 8-16 per cent and first home buyers rapidly locked out of the market as demand outpaces supply.
“This just confirms what experts have been saying for ages; that throwing super into the housing market would be like throwing petrol on a bonfire – it will jack up prices, inflate young people’s mortgages and add billions to the aged pension, which taxpayers will have to pay for,” said ISA chief executive Bernie Dean.
“Politicians who own multiple investment properties and pocket 15 per cent super might think price hikes are a ‘secondary’ consideration. They don’t care about locking young people into hugely inflated mortgages and a bleak future with hardly any savings to fall back on.”
ISA said that there is “widespread agreement” among housing experts that the resulting demand for housing will not be matched by an increase in supply, noting that both the Grattan Institute and the Retirement Income Review rejected the idea of “super for house” and warned that the debate was more political than economic.
“In addition, demand-side policies can have significant political appeal. Policies that increase house values, even if that is not their stated justification, may help to cultivate political support among important constituencies of older homeowners who experience increases in their wealth and a greater sense of financial wellbeing,” ISA said, adding that several generations of politicians – including Mathias Cormann and Peter Costello – had warned against using superannuation for a home.
The controversial idea has found a new champion in the form of Liberal MP Tim Wilson, who has launched a “Home First, Super Second” campaign to see superannuation savings opened up for housing.
“I always believe that home ownership is actually in Australians’ best interests. Some people may think having superannuation balances is more important than that. As a public policy principal, the greatest leading indicator of poverty in retirement is not owning your own home … I make absolutely no apology: I am for home ownership,” Mr Wilson told media.