The SMSF Association has categorically opposed a proposal to allow first home buyers to access their superannuation to fund a housing deposit.
Debate over the measure re-emerged this week after finding traction within government ranks in the lead-up to the federal budget in May as a way to address Australia’s housing affordability issue.
“It’s been our long-held position that allowing people to tap into their superannuation to assist them to acquire their first home is bad public policy,” SMSFA chief executive Andrea Slattery said.
“Although it is tempting to view superannuation savings as a tool for fixing policy problems, it is essential that super is maintained to meet its sole policy purpose – to give people security and dignity in retirement.
“Making super available to housing would be akin to opening a Pandora’s box; super would be seen as a cure-all for every social issue.”
Slattery said it was important to remember that having retirement income as the primary objective of super was accepted by the government in 2016, after it was proposed by the Murray review in 2014.
“Using super to solve housing policy problems jeopardises the success of the super system, which is ranked as the third best in the world by the Melbourne Mercer Global Pension Index.
“The association recognises the importance and sensitivity of housing affordability, but does not believe the access to super to fund home deposits is the answer to this problem.”
She noted the proposal to allow people to access super to fund housing purchases would only prompt greater demand for housing stock, drive prices higher and achieve the exact opposite of what proponents of the proposal were seeking to achieve.
“Instead, the housing affordability debate needs to primarily focus on other factors driving the housing market instead of seeking funding through people’s retirement savings,” she said.
She acknowledged that super had an important role in providing capital for investments that increased living standards through infrastructure and social investments, but not for a proposal that would simply distort housing markets.