Put buying a home over increased superannuation, Liberal MP Tim Wilson tells government

Put buying a home over increased superannuation, Liberal MP Tim Wilson tells government

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“Most Australians don’t think it should be a choice between home ownership and super, but the reality is every dollar locked in super can’t be used to buy a home,” Mr Wilson, the chair of federal parliament’s economics committee, said.

“If Australians buy a home they can start saving for their future retirement, whereas they can’t start saving for a home from retirement”.

Several backbench MPs, including NSW senator Andrew Bragg, Jason Falinski and Dave Sharma have previously argued the government should consider an extension of its current First Home Super Saver scheme, which allows the withdrawal of voluntary super contributions up to $30,000.

Mr Wilson said it was “illogical” that a 40-year-old had $100,000 in superannuation savings but did not own their own home.

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“On the same trajectory they’ll get the pension, it’s just whether it will be gobbled up in rent, or used for a dignified retirement while owning a home,” he said.

Industry Super Australia chief executive Bernie Dean has warned any changes to the scheme would “just drive up prices and push ownership further away” as it gave people more money to bid on an asset.

He has also criticised some of the findings from a 600-page Retirement Income Review panel which suggested rather than lifting the super rate, retirees should instead sell the family home to fund their golden years.

The findings of the 10-month probe found home owners had better retirement outcomes than renters and more equity to draw down on in their old age.

“This report’s findings must be used to support sensible reforms that will grow members’ savings, not cherry-picked to support pre-conceived policy ideas that will leave people and the nation worse off,” he said.

Brendan Coates, the household finances program director at public policy think tank the Grattan Institute, said increasingly unaffordable housing was arguably the biggest threat to a comfortable retirement for many Australians.

But he said compulsory super was only a small driver of declining home ownership.

“There are plenty of ways that government could make housing more affordable, but few are likely to be popular,” he said.

“The most effective involve reforming planning rules to boost the supply of housing in our major cities where house prices have risen the fastest. Others involve reforming tax policies, like negative gearing and the capital gains tax discount, that inflate demand for housing, thereby raising house prices.”

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Mr Coates said the big risk in allowing Australians to access their super was that it will boost house prices further.

Opposition frontbencher Brendan O’Connor said on Sunday the Coalition could not be trusted with the superannuation system, which he said had increased the living standards of a generation of Australian retirees.

“They have never not found a reason to defer an increase to universal super,” Mr O’Connor told the ABC.

“They loathed Medicare originally, they loath universal super, and they find ways to get out of election commitments.”

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