The SMSF Association (SMSFA) has rejected suggestions first homebuyers be allowed access to their superannuation benefits to help finance the purchase of a dwelling.
The recommendation was part of a Committee for Economic Development of Australia (CEDA) report, “The Super Challenge of Retirement Income Policy”.
SMSFA chief executive Andrea Slattery welcomed the debate about the issues, but said she had strong concerns over some of the suggestions.
“Allowing first homebuyers to access their super to fund their first home purchase, while well meaning, fundamentally undermines the core objective of the super system – to provide income in retirement,” Slattery said.
“We recognise the importance of secure housing in retirement, but the association strongly believes that super savings should be retained for the sole purpose of providing retirement income, and housing policy challenges should not be solved through the use of retirement savings.
“It is critically important to ensure that super balances early in a person’s life cycle are protected so they can benefit from compounding investment returns over time.”
The SMSFA also disagreed with the report’s proposal that all super contributions be made from post-tax earnings to improve tax equity and align the tax settings with the owner-occupied housing sector.
“There are two key policy rationales for the concessional treatment of super contributions: to compensate people for having their income locked away in super for a long-term period and to encourage extra voluntary savings,” Slattery said.
“The CEDA recommendation undermines both these important superannuation policy rationales.
“It should also be noted that earnings in super are taxed, unlike those from owner-occupied housing, which are generally tax-free.”
The SMSFA 2016 National Conference will be held in Adelaide from 17 to 19 February, which will include a number of practical hands-on workshops.
Slattery said this was an innovative idea as it allowed specialist members to work together to learn how to solve problems clients brought through their doors every day.
“The aim is to make the workshops real ‘work life’ experiences by limiting the numbers and making them interactive to ensure our specialist members take back practical experiences to their businesses,” she said.
