Libs want home-ownership to be a part of superannuation

Home-ownership could become the cornerstone of retirement under proposal.

money bags put in a model home

Liberal Party MPs have been discussing the idea of home-ownership becoming a major part of your retirement income, as part of a raft of suggestions to fix our retirement income system.

Home ownership could become the cornerstone of retirement under their proposal.

The Liberals want to use superannuation to help first home buyers get into the property market.

It seems allowing members to dip into their superannuation to help them get a foothold in an increasingly challenging fiscal environment is becoming a theme.

That’s how tens of thousands of Australian have got through the pandemic – accessing up to $20,000 in super early.

And that’s how the Libs think young people could be able to buy their first home.

Liberal MP Tim Wilson told Jane Caro on the weekend that super should be used to help investors into the market.

This is despite more than $42 billion being drained from existing super accounts, with 600,000 Australians using all their retirement savings and the fact that more and more women are already without adequate retirement funds.

Some say the proposal will simply inflate property prices, but Mr Wilson is sticking to his guns, saying it might be the only way some people could buy a home.

“Not owning your home is one of the biggest determinants of poverty in retirement. And it disproportionately impacts women,” he tweeted.

“And because we prioritise super over home ownership, we fuel it. It is wrong.”

Liberal member Andrew Bragg also thinks super should be used to buy a home, but says the Prime Minister still needs to fix a system that consistently gouges Aussie workers with high fees.

“The system costs more than it saves. There should be more flexibility. Australians should be allowed to access super for a first home; a home is more important than super,” said Mr Bragg, who believes super should be treated like a self-managed super fund (SMSF) to give Australians greater flexibility with their money.

“I know a lot of people will be expecting me to say we should abolish super; I don’t think we should. I think the idea is very good, but I do think the execution has been poor,” said Mr Bragg.

The Australian Council of Trade Unions (ACTU) is not a fan of the plan, says a Nest Egg report, which states Australians should not have to choose between a dignified retirement and home-ownership.

“While the rest of us are working on how to get through this pandemic and protect workers, the Morrison government remains focused on their own pet political issues,” said ACTU president Michele O’Neil.

“People shouldn’t have to choose between owning a home and a dignified retirement, but that’s exactly what the Morrison government wants.

“This idea also makes no sense; it will simply increase house prices and decrease the amount that superannuation funds have to invest in housing and other infrastructure projects.

“Without a decent superannuation system, we’ll go back to a world where most people retire on a pension that barely puts food on the table.

“Under the cover of COVID-19, the government has already ripped $42 billion from Australian’s super accounts, and this will cost working families hundreds of thousands at retirement time.”

The ACTU said the government was seemingly bent on undermining the purpose of super for political ends instead of supporting workers through a difficult economic period.

“Superannuation must be protected to provide Australian workers with a dignified retirement. It must not be used as a Liberal Party piggy bank to be dipped into whenever the government decides,” said Ms O’Neil.

What do you think of this plan? Can people be trusted to have more access to their money? Or does it undermine the purpose of super?

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    COMMENTS

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    Baby Huey
    14th Sep 2020
    11:25am
    Not a bad idea amoung many for fixing the now broken Australian super system. The problem is like all grand government ideas, no matter which party is in power, it will be screwed up by incompetent public servants and their money grubbing consultants. When implemented it will financially hurt the people it is supposed to help.
    Tanker
    14th Sep 2020
    11:37am
    The Australian super system is not broken just distorted through the benefits afforded to the wealthy through Howard and Costello's largesse to them.
    If the Libs want to help young people get a home divert the tax for the wealthy into tax deductions on the mortgage payments low income earners as faced with or toward an effective reduction in the deposit needed.
    Typical Tim Wilson with his interest in financial matters that appear to have a personal leaning.
    Placido1
    14th Sep 2020
    11:28am
    Do not trust this idea, coming from Wilson and Bragg who are both opposed to the concept of general superannuation particularly the well performing industry funds, they want to destroy the system that Paul Keating set up and they also do not want the scheduled increases to happen.

    I am very disappointed that Your LifeChoices published this ideological piece of deceit.
    Sceptic
    14th Sep 2020
    2:46pm
    But you are quite happy that YLC publishes despicable get rich quick scheme adverts?
    Placido1
    14th Sep 2020
    4:04pm
    Sceptic: Actually I do not like their adverts, have not supported them, sounds like a red herring comment to me. Damn, you might have red herrings under the bed!
    Farside
    14th Sep 2020
    6:25pm
    Adverts are necessary to pay for publishing YLC. Take the ads with a grain of salt and ignore if they do not appeal though there must be enough leads generated for repeat advertisers to find some attraction. It's certainly hard to imagine any members would pay to access YLC.
    On the Ball
    14th Sep 2020
    11:41am
    Typical LNP idea to further increase the costs of housing. Why? It suits the real estate "industry". An inverted pyramid with the poor buyer at the pointy end supporting all the leeches - from agents, banks, various governments, councils etc.
    Its all about milking as much $$$ from the general public as possible. And the $$$ flow to their rich mates who then return the favour buy returning them to office.
    Superannuation is just the next cashcow to be milked. When that's gone, what next?
    All the while all these schemes increase the costs of housing.
    How about low-cost housing? Affordable housing?
    floss
    14th Sep 2020
    11:48am
    The Libs just can't keep their hands off our super.Blow your money on a big home than you can get a full pension,more short term policy.The big end of town is at it again.
    Horace Cope
    14th Sep 2020
    11:50am
    "What do you think of this plan? Can people be trusted to have more access to their money? Or does it undermine the purpose of super?"

    Is this a plan? If a couple of back benchers make a suggestion how does this become a Liberal plan? Rather than asking the government for a clarification, it seems a better idea is to go to the mortal enemy of the Liberals and ask them for a quote about what a couple of back benchers have said. Top marks for journalistic integrity.

    People should only have access to their super in emergency situations and this has already been covered in the legislation. Release of funds from super for any other reason should not be allowed as the original design was to put funds aside for retirement, not to be used as a savings scheme.
    Karl Marx
    14th Sep 2020
    11:58am
    Super is for your retirement years not to buy a home. You save a deposit then get a mortgage & save to pay that off, earlier the better just like we did & our parents & grandparents.
    This idea will put more people on the pension in the long term as their super will be less of an asset $ wise.
    So now I smell a Liberal rat. I have a suspicion that this is the start of making the family home included in the asset testing as the Libs will argue that the family home in a lot of cases has been paid for with super funds originally intended for retirement therefore the value of the house should be included in any asset testing to reduce pensions.
    Sundays
    14th Sep 2020
    12:27pm
    Agree, or they will insist people sell their homes or take out reverse mortgages to fund retirement. Easy said by people who already own homes amd have good super
    Mariner
    14th Sep 2020
    3:48pm
    Karl, I can see that rat as well quite clearly but I also realize that the home will become asset tested in future unless we adopt overseas practices like inheritance taxes on estates over a certain amount. It would be the fairest, so millionaires cannot make their sons/daughter millionaires as well without input from them.Family Trusts should certainly get a looking into.
    Yes Karl. I smell that rat too. Your reasons for that smell and those of Sundays are sound. Family trusts and other tax incentives need to be looked at too
    Life experience
    14th Sep 2020
    11:37pm
    I thought exactly the same. They will say say borrow from home for retirement. Just like younger ones will need to.
    And used in asset test too.
    4b2
    14th Sep 2020
    12:46pm
    One solution would be to combine all super into the Future Fund. Problem solved.
    Mariner
    14th Sep 2020
    2:02pm
    And then the Future Fund gets taken over by the Govt, included into general revenue and then everybody gets the universal pension. Now, have we not heard of that happening before, a few decades ago?
    4b2
    14th Sep 2020
    3:24pm
    It was set up by the Howard Costello Government to fund their super so I doubt they would jeopardize their gravy train. If they are so worried about the high fees regulate them. Maybe there was some actions to be taken from the Royal Commission into the financial and Banking sectors.
    ph
    14th Sep 2020
    12:54pm
    Every time the government produces a scheme to add money to peoples ability to by housing, the price of housing goes up. I have seen this happen again and again over the 40 years I have been in Australia.
    MJM
    14th Sep 2020
    1:28pm
    So young ones take out super to fund a home. Sounds plausible until you realise this demographic won’t get a pension. So how are they supposed to live then????
    Sceptic
    14th Sep 2020
    2:36pm
    At last, a suggestion that actually maked sense! Whilst I agree that retirement on the aged pension is very difficult, retirement on just the aged pension whilst having to pay rent is even more difficult. Any scheme which allows young families to acquire an appreciating asset, rather than keep paying escalating rents, must be worthy of consideration. If they retire owning their own home (and have little to nothing in superannuation) they at least have something that they can reverse mortgage if they wish!
    Mariner
    14th Sep 2020
    3:02pm
    That is what fathers told their sons in the 60s, Sceptic. They were right then and I believed in the endeavour but that was before means and asset testing started. Buying a house you anchor yourself in and when the Govt changes the rules, as it often does, your are on your own. Love to see some certainty back for our young.
    Arvo
    14th Sep 2020
    4:11pm
    In the capital cities, homes on the market are well over $700,000...how is $20,000 drawn from super going to secure a deposit, stamp duty, legal fees and furnishings on its own? It won't !
    Even, if such a plan was allowed, london to a brick, they will shift the goal post that will leave a lot of people in a financial plan lurch as has been the experience since the Libs came into power.
    Of course, it undermines the purpose of Superannuation future old age retirement.

    State government need to invest in building low cost medium density public housing for low income tax paying Australian citizens.
    Deborah advocating for an Australian as head of state
    14th Sep 2020
    4:12pm
    Taking out of/diverting money from super is not a good idea. Super is saving for retirement and to alleviate pension costs later on. Saving in super is easy because I never see that money it is put into the account for me. Saving for a deposit on a home requires the person to make the deposit themselves. This is not always easy with other financial commitments. And not been easy for those on the lower end of the pay scale, especially as the rate of pay has not increased substantially, if at all for many, for a long time. And of course, there are many who can only access part time/casual work or even contract work making it even more difficult to save for a mortgage. And often these are not eligible for super guarantee. Super is predicated on ongoing and reliable work and therefore being able to contribute and save for a deposit on a house. Look at employment, taxes and other financial policies that keep cost of living high rather than reduce &/or stop payments into super.
    Hardworker
    14th Sep 2020
    4:28pm
    For the young to aspire to owning a roof over their heads you need to fix the workforce first with more full-time work and a less casualised workforce. You also need to show the young how to save and invest for the long term. This is not taught in school and not enough parents show their children how it can be done. The young just want to live for today and worry about retirement later except that 'later' catches up with them faster than they think. We need a variety of ways to save/invest for our future. It is not a one size fits all situation as life tends to interfere with sometimes well laid plans. The LNP are always thinking up ways to help the higher end of town. Unfortunately there are a lot of people at the lower end of town that would help themselves a lot more if the Govt made it possible for this to happen.
    Eddy
    14th Sep 2020
    4:46pm
    These are the sort if ideas promoted by the right wing of the Liberal party. It is to ensure the poor remain poor and the rich get richer.
    I would like to advance an alternative idea, how about the Federal Government embark on a program of residential construction as a way of stimulating the economy, similar to what both Labor and Liberal governments did in the 1950's and 60s.
    While the liberal ideals of the Menzies government may not appeal to the right-wing ideologues of todays Liberal Party, the old Commonwealth-State Housing Agreements did ensure our parents had access to 'affordable' (how I hate that word) housing without enriching any predatory private developers. The housing construction boom could ignite our economy and provide badly needed housing without making younger people dip into their superannuation.
    Mariner
    14th Sep 2020
    5:08pm
    "Affordable" is not a word to hate, Eddy. Our parents lived by it, we just up-ended the meaning to "low-cost, subsidized standards". It was not the case when Mum and Dad set out and for some reason they seem to have managed. Maybe the lack of credit cards had something to do with that.
    Menzies and his Labor equivalent had the worker in mind in their decision making, something sorely lacking in today's politicians.
    Eddy
    14th Sep 2020
    7:23pm
    My problem with 'affordable' Mariner is that what is easily affordable for one person is totally unaffordable for another person. When that word is used it usually means exactly the opposite of what the reality is.
    45er
    14th Sep 2020
    5:09pm
    The ACTU would not like any thing that prevent all that nice money going to Industry funds. It would deprive them of one of their main sources of income.
    Karl Marx
    14th Sep 2020
    5:50pm
    Rubbish
    No true. And if it were, why is it that industry funds have better returns and lower fees than the for-profit super funds run by banks and other financial companies like AMP.
    KeWi
    14th Sep 2020
    5:34pm
    It was not that long ago that a 'typical' family (whatever that was) could support a non-working spouse to be at home during at least the early years of a family and buy a house (with interest rates a lot higher than they are now).

    Somehow this has changed to where even with both working it can be a struggle to get into a house.

    Was this deliberate, or did it just creep in unseen? And I can't believe it is the fault of compulsory superannuation.
    it is not the fault of compulsory super. Wage rises have been few and far between or even non-existent, tax perks, tax cuts that favour those already on a high income and ever increasing casualisation of work. All of these factors make it harder for most to save a deposit for a house.
    geordie
    17th Sep 2020
    8:10am
    Look around. Theres no shortage of money in the general populace. The problem is too much stuff to buy. When was the last time you saw a junker being driven down the road. Half the cars are German made executive brands or top end Japanese brands. I live on the GC. Look out over the water some time and see the boats and jet skis. Every weekend I see 20yr olds pulling up to boat ramps with their $60.000 utes and their $40.000 boats. Everyone that wants a motorbike has a Harley. I see $100.000 Mercs and Beemers parked in the street, when their owners are renting in low cost housing.
    Where else but the 'free world' can you find bums and wasters spending their money on Cigs, alcohol and dope, then asking for a handout for housing,food and clothing when their money is gone. (Please note that people who 'need' help shoud get it. Im sure you know the difference.)
    I know this article is about super but we need to stop wanting what 'Wealthy' others have and think we deserve the same. We are all responsible for ourselves first and foremost. My old mum used to say "your eyes are bigger than your belly". If everyone lived within their means there would be less debt and other problems in life and then we could actually look after the needy in our society.
    Old grey
    14th Sep 2020
    6:03pm
    Instead of just allowing people to access their super, how about making home ownership more affordable. Australian capital cities have some of the most expensive homes (with exorbitant land prices boosting state coffers), yet we have huge amounts of land out of the min residential corridors screaming out for development, with little to no infrastructure (transport, water etc). The current pandemic has shown that we don't all have to work in the city or central office BUT the current powers-seem to want us all to live in multi story high rises, where people are easier to control, and the government can make more money
    Jacka
    14th Sep 2020
    6:37pm
    Superannuation is one of the great inventions of the 20th century. It ensures that idiots who would normally piss their wages up against the wall, will have that money for their later life and a half decent retirement. Along the way they and their wife or husband should put their heads down, their arses up and buy outright a home for the then family and finally retirement. This is what this idiot and many other millions of idiots have been forced to do, Thank God. Superannuation should never be touched until retirement and the family home should never be included in the means test. Once again the parable of the Ant and The Grasshopper. Live your life as a hobo, died as a hobo, your choice. But don't bludge off other responsible Australians. Jacka.
    Nika
    14th Sep 2020
    8:36pm
    Dump stamp duty for first home buyers. son just paid $30,000 stamp duty on his next house. That $30,000 could be the difference in buying or not buying. So unfair.
    Chrissy L
    14th Sep 2020
    9:11pm
    If the Super scheme is going to be available for people to access to acquire a deposit for their own home, which was not was it was designed for. But assuming that is going to be the norm going forward, what is going to be there for people in retirement to not live in poverty on the single/married aged pension? We have many people now in retirement who had no access to super and are finding it very difficult to make ends meet, particularly single women aged pensioners who are below the poverty line. The whole scheme needs a full review if these changes take place and maybe a universal pension for all?
    Fedup
    14th Sep 2020
    9:34pm
    The Libs can’t help themselves. They keep coming up with ideas to wreck the superannuation system.
    jaycee1
    15th Sep 2020
    3:57pm
    So someone used their super for a deposit to buy a house [most young people won't have enough to buy outright], then can't keep up the repayments - bank repossesses the house leaving the owner with NO house and huge hole in their super.
    Only people winning here are the banks.
    Farside
    15th Sep 2020
    5:43pm
    "Only people winning here are the banks" ... and their shareholders
    skinner
    16th Sep 2020
    3:20pm
    The usual LNP nonsense! Hit the pensioners who are home owners, despite the fact that those same pensioners have worked very hard to pay their mortgages from after-tax salary! A better way is to stop ALL pensions to ALL pollies! That'll save heaps!


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