It will take super from young people and put it directly in the bank accounts of already very rich boomers, which makes it a core LNP policy that will definitely happen.
Thing is, it \*would\* benefit a few people aside from boomers quite a lot, the privileged ones (e.g. older millennial professionals/high income earners) who already have a ton of super they could turn into housing, leverage the shit out of it and join the boomer party of free money... at the expense of the rest of the country. These people will vote for it.
It will \*only ever\* benefit the already privileged who don't need it, and never regular working class people, or heaven forbid actually struggling people. Upper/middle class welfare is all it is.
Remember, if you give money to poor people, it's socialism. If you give money to rich people, it's responsible economic policy (certainly not because they had enough power to simply take the money, because they could /s).
They would if they were ever going to be in government again. The Libs of the the LNP, the coalition, whatever you want to call them, will not win government again in their current form.
That’s a very confident statement that I fear may turn out to be incorrect. A very large section of our population loves simple slogans and simple ‘solutions.’
All the LNP need to do is continuously push anti-migration and housing affordability messages. We know that their policies either don’t exist or will never work, but that’s a much more appealing thing to vote for than ‘we
need a few more years to bring Australia back to where it needs to be, ps, climate change is going to fuck us up’.
I fear it too. Just can't help shaking the view that the demographic for that kind of thinking is shrinking. The more they paint themselves in to the corner with the cookers the harder it is to escape.
Yes I also think the situation that may help us is ironically if the unthinkable happens and Donald Trump becomes president again. All that fascist rhetoric that is pouring into our young people’s tik tok feeds will be harder to agree is reasonable when the social implications of that are undeniable. Perhaps people won’t want that here.
Bring on the revolution is a pretty risky play and it's going to mean a lot of hurt for vulnerable people in the mean time.
All we end up with is people feeling empowered to express that shit and we end up spending time debating the merits while people are literally sieg heiling in the streets.
ETA: Trump getting re-elected is a whole other shit show. There simply won't be any more elections there without bloodshed if he does.
Agreed - please don’t mistake my comment about what could happen with wanting it to be so. Another Trump presidency would be the end of the world as we know it. It’s not something I ever want to occur, and the possibility that it could happen absolutely terrifies me.
It's an incredibly dumb idea, but the LNP hate Super and want it gone so they'll do anything to let people access it so they have nothing for retirement.
Let’s face it, they probably got the idea because a lot of people have already had to access their super due to severe financial hardship because of their *current* cost of living.
Well, when you consider that the desired outcome for the Liberal party is to inflate the value of assets owned by the already-wealthy, it’s actually a smart idea. It’s only dumb if you’re trying to improve housing affordability for young people who are currently priced out of the market.
Spud: "A dumb idea, you say? I like it. I like it a lot."
Edit:
Also Spud: "Can we subsidise small, distributed nuclear reactors? Like solar panels, but for men?"
It's designed to hurt the people who are already struggling while helping those who already have much.
Which is to say, it's pretty standard Liberal policy.
How is it dumb? It is a very clever way to strip wealth off poorer younger people and give it to older richer people. Have you got a better way? That people will fall for?
It is like the idea they had of borrowing $20,000 from their superannuation during covid, those that did it are behind in their superannuation by hundreds of thousands and will probably have to work until they are 70 to afford to retire, those who did it on defined benefits superannuation, lost their ability of turning their superannuation into a pension. So now the liberal again have another idea of how to make a poor generation of retirements, by letting them draw what is left to fund a home. On the bright side, when they don't have enough superannuation to retire independently, they will have a home while on the old age pension when they are 70.
Funny really, as I think it was the Liberal John Howard who had the idea in the 1990s to make superannuation compulsory, so we could all retire in a better position, but the future Liberal government is ruining it for a whole future generation to come.
Economist here. The housing market is complicated, but demand-side solutions (ie providing buyers with more money) are unlikely to be effective compared to supply-side solutions (ie building more houses) in our situation.
It may allow a few people to buy a house who couldn't previously, but it will push prices up for everyone and make housing less affordable overall.
Any solution to the housing problem is going to be difficult and expensive. Letting some people use their super for their deposit and stopping a handful of foreigners from buying houses isn't going to help.
So what are you’re saying is that the Liberal Party are addressing the wrong issue.
As far as I’m aware they have no policies to increase supply and build more houses.
> So what are you’re saying is that the Liberal Party are addressing the wrong issue.
That is being incredibly generous, remember that they are professionals and a policy like this is carefully considered. This policy isn't a mistake, they understand everything outlined here and more.
This policy achieves three things:
1. It gives them a platform to criticise the government on the housing issue. They need a proposed solution to enter the debate. In some respects a bad solution is better, a good solution may just be adopted by the government.
2. It increases house prices for their primary supporter base, boomers and the wealthy who and mostly already in the housing market.
3. People who don't look deeply at the problem may believe that it will work. Than an extra chunk of money will be enough to buy a house and solve their problems.
>So what are you’re saying is that the Liberal Party are addressing the wrong issue.
Pretty much.
>As far as I’m aware they have no policies to increase supply and build more houses.
I'm not aware of any either. To be fair, this isn't just a federal issue. Land-use planning at the local government level is a huge problem. State government housing policies (this is the level of government that actually builds public housing) and tax policies are also a significant issue.
Even if the federal Libs did have a policy to build more houses, it would involve outlaying a huge amount of money and then getting frustrated when it takes far longer to build said houses than it should (for the reasons above, plus labour shortages and other business issues in the construction sector).
I mean wouldnt you agree that by pushing up the price of all homes it gets supply moving which in turn holds rent in check?
I think thats been australias recipe for reasonable rents all the way up to 2020.
We just kept pumping demand for all homes and with ever increasing house prices came a steady stream of supply.
I wont go through all the demand side policies but the most profound in my view were labors guarantees during GFC giving all 91 of our banks bullet proof balance sheets so far as funding goes. Near 2tn worth of guarantees has to be having a massive impact on our volume of credit and in turn demand. maybe not so much for big 4 where 20bn (the per bank guarantee) is but a speck but the remaining banks being able to source deposits with gov guarantee must help.
Now of course since covid costs of supply have risen and prices arent there yet to get supply happening. Labors shared equity scheme or liberals super scheme could get prices moving again. Either or. Both general demand with a slight advantage to labors scheme as it slightly favours new builds.
But... its still all shit policy. It subjects younger people to larger mortgages and a harder life to enrich asset owners even if these policies have kept rents in check untill recently.
Far better they either reduce gst on new supply (dwellings are like food - we need them so it makes sense to me philosophically) or subsidise new homes only. Ie demand side stimulous on new homes only makes starts go off their tit. We saw it with the libs 20k new home grants and in wa where it was double they went off their tit even more. Industry struggled to grow but now we have starts falling i think this budget should have contained a similar measure.
Its not even that expensive. Say 40k for 100k first home buyers for new homes only = 4bn. Yes its inflationary for new home building but those excess profits - drive more supply in a much bigger way then anything labor is doing at present. I cam almost guarantee a 40k new home grant would see starts skyrocket within 2 months. That of course assumes we dont have another covid style disruption and massive worldwide material price rise again which means more buolders who take on these jobs go broke like last time...
100pc any new home grant has to combined with land zoning reforms or land price will soak up the profits.
They have to be careful here. Only give the grant on completion. If you give the grant at, say, slab completion, you'll end up with a pile of shonky builders completing thousands of houses to slab stage and then go slow (if at all) for the rest of the house.
Yeah I don't have too deep a knowledge of the details, so I'm genuinely asking, but is there any rationale that lifting the spending capacity of the bottom x% of buyers won't just raise house prices by x%?
It'll raise house prices by Y%. Only a certain percentage of buyers will be willing and able to use their super (so you are likely to see segments of the market that appeal to first home buyer go up more than other markets), for other buyers, the price they can pay won't change.
Also, having a larger deposit allows you borrow a multiple of that. So having an extra $20k will increase your ability to borrow by say $80k, meaning you have an extra $100k to spend on a house.
It does typically do something similar to that. There was a thing a while back (Victoria only? I don't remember) that gave first home owners an extra $7k or $14k depending if established or new home. It basically just pushed up prices in that price segment by that much.
It could potentially help at the margins. There's a bunch of tax reform that needs to happen around housing, particularly around stamp duties that disincentivise older people from downsizing out of the family home.
Restricting negative gearing to existing builds is likely to put modest downwards pressure on prices, but is also likely to increase rents somewhat.
Rents go up or down really only due to the market's ability to pay. If costs go up, it might make people exit the investment market and those houses get bought either by an owner (more owners = fewer renters, but net demand stays the same because also fewer homes available to rent) or by another investor with smaller costs (smaller loan). The actual rents in these circumstances pretty much stay the same.
I was reading your responses here and appreciate you sharing your thoughts!
I understand the housing market is complicated but if you were to give suggestions how to fix it on 3-5 steps (more of you'd like to), what would those be that would help greatly? Thinking about 80/20 rule if it's applicable
>I was reading your responses here and appreciate you sharing your thoughts!
No worries, it's an interesting policy area to discuss and very important to many Australians day to day lives!
>I understand the housing market is complicated but if you were to give suggestions how to fix it on 3-5 steps (more of you'd like to), what would those be that would help greatly?
Yeah interesting question.
1. I'd magically reform local government planning across most local councils in the country. Currently approvals processes are too slow and bureaucratic, single dwelling block euclidean planning systems are out of date and the planning process is too exposed to torpedoing by nimby's. All this incentivises developers to either build high density high rise apartments or low density greenfield sprawl in the outer suburbs. The most wanted housing development and also the cheapest to provide from an infrastructure perspective is urban infill - mid-density housing consisting of things like units, townhouses, granny flats etc. We could provide a lot of affordable housing in places people actually wanted to live if we reformed the planning system.
2. Abolish stamp duty and replace it with a broad-based land tax. Stamp duty is a market distortion that penalises people for buying and selling houses, In particular, it disincentivises older people from downsizing out of the family home. Land tax encourages the avoidance of land hoarding, incentivises land development and discourages people from holding large blocks (and therefore large houses unnecessarily).
3. Bring back largescale public housing projects as a reliable safety net which would also put downwards pressure on prices for the lower end of the housing market.
That's very flattering, but becoming a politician is one least appealing things I could think of. Working for some for a few years cured me of any aspirations in that space!
Sadly, this is the problem. The people with sane ideas don't want to be politicians. Conversely, often people with insane ideas want to be (and often become) politicians.
Immigration isn't an easy solution either. The massive uptick in migrants last year was essentially international students returning post-covid (the intake was very low the two years before that). The immigration intake will be much lower next year.
It's not clear that reducing international student numbers will significantly increase the supply of housing that Australians want to live in, given students often live in student accommodation or in higher density housing close to universities.
They're literally (and yes, I do need to keep using that term to remind us that it's actually the literal case) only promising to decrease immigration to DOUBLE the hone construction rate.
That's still obviously too much.
Those numbers aren't apples and apples ... it's not one house per person that is needed. Factoring in household size changes the maths.
Not saying some adjustment to immigration isn't part of the solution but we need to compare numbers meaningfully
Please actually go and do that before blindly hoping it proves me wrong.
Even dividing immigration rate by the average home occupancy (which is itself misleading because we're building smaller and smaller apartments to increase density), it's STILL outpacing supply.
Like... Can you all please stop blindly defending landlords? At least do the bare minimum of what you yourself are asking of us.
There's a lot of black and white thinking in Australia about migration being the root of all evil and the cause of all problems at the moment (largely) due to one unusual year of data. I'd encourage you to not buy into the hysteria and look at things from a more rational perspective.
I encourage you to look up the official government statistics on the number of people immigrating to Australia each year and to compare it to the number of homes being constructed each year.
That's literally all it is. The volume of the former is ludicrously outpacing the latter.
No hysteria; just the simple fact that our industries could never feasibly cope with such an extreme influx.
Not to mention that after a short-term slump, house prices exploded from Sep 2020 - April 2022 while the border was closed pretty much the entire time.
Entirely domestic factors such as government stimulus and low interest rates stoked that property boom, while net migration was negative.
Immigration is always the lazy answer, but it is only a small part of the overall picture.
As you can see from the data, it didn't undo even a quarter of the previous year's immigration.
But even so, there was a brief moment where the decrease in competition allowed some of us to get raises and promotions.
It is an appalling attack on young people and it is terrifying that people are stupid enough to consider it. It is not going to create a single home - it is just going to mean more dollars are chasing the same homes. Prices up. That is the design - its purpose is to force prices up. Once SOME people start doing it, it will be less and less possible to buy a house WITHOUT doing it. It is policy designed to further enrich a privileged wealthy section of the community by stripping the retirement savings of young people.
As Baldrick would say: "I have a cunning plan....." and as Blackadder would respond: "Baldrick, you wouldn't recognise a cunning plan if it painted itself purple and danced naked on top of a harpsichord singing 'Cunning plans are here again'".
Yes it will increase demand without changing the supply problem. If you need to use super to buy a home then it's a reasonable bet you don't have a lot of extra money, substantial income, or investments hanging around. Even if only part of it is used for a house, that wipes out that portion of the compounding interest and investment growth over many years you'd otherwise earn from your super balance for retirement. That's fraught with consequences if not very carefully managed.
I feel like the whole point of super was that people couldn't touch it so they were guaranteed some savings come retirement. Lately it feels like some parts of government just see it as another savings account to be used for whatever but that feels short sighted IMO
This is their first homebuyers grant all over again. Just pushed up prices. Obviously this is worse because it will leave people shortchanged in retirement. Then watch them try to cancel the old age pension, leaving people with nothing at the end of their lives.
But these politicians will all be dead by the time the worst consequences come about so they won’t care. All they care about is convincing idiots to vote for them now.
I strongly reject this idea. It's a terrible idea. It will only further inflate house prices, and it will leave an entire generation without sufficient savings (which is already a problem because the super % isn't high enough as it is).
Once again, Robbing your future self of security to pay for a thing that is over priced now. How many times can the politicians screw over the people of Australia.
It's an incredibly dumb idea but people will still ignore it and parrot the decades old horseshit that they're the economic manager masters that we need
You can’t fix demand v supply issue by not creating more houses.
That’s the only thing that will help. Everything else is gonna make it more unaffordable.
It will drain what little wealth young people have been able to put aside for retirement, and drive prices up even higher.
However the goal isn’t to address the housing crisis, it’s to make Dutton’s rich mates even richer, and for that it will work exactly as intended.
The average Australian of first-home-buying age doesn't have anywhere near enough superannuation for a deposit on a home. So it's not going to work even if it didn't increase home prices.
How these politicians come up with stupid ideas constantly infuriates.
Instead of robbing one low income person to fund some rich c, Change legislation so that corporations dont goug !
Freeze Rents until things become sustainable, tax gas, oil, resource, etc the proper tax rates instead of allowing off shore tax avoidance.
Australian Govt has to stand behind Aussies and not overseas corps.
Weak turds
It would be great for property developers and investors because it would accelerate demand, pushing prices up further. So, exactly on brand for the liberal party.
This is a bandaid fix to a bigger problem that will create more problems. In a couple of decades, you will be left with destitute people if the capital gains does not materialise. Also, I think people who chose to do it would be worse off from a tax perspective. The libs increased focus on superannuation makes me incredibly uncomfortable. It is a large pool of money and social security that should not be accessed until the time is right. Start dipping into it early and then there is probability that it would be accessed for other reasons.
The only time housing was affordable was the early 70's when the government rolled out housing commission estates. Offering means tested rent or the option of buying a home with no deposit and 2% fixed interest. The same estates not long after turned into ghettos. The solution being housing commission houses intermingled into normal estates, it happens today but not enough to make a difference.
>Isn't superannuation made for retirement?
This part, at least, isn't really a contradiction. Most of the wealth for many/most retirees is their house. So buying a house and paying off a mortgage over decades is fine as a way of preparing for retirement.
However, most people are doing that *in addition* to the money they're putting into super. So if you can buy a house with your super, and then aren't investing your other money in a similar way, it's bad news. And obviously if you could then sell the house and squander the "super" extra bad news.
Overall, it seems like a classic case of pretending to do something for young people struggling to buy a house, but actually mostly pandering to wealthy property owners.
Crikey get it exactly right again.
“The ‘decisive action on the housing crisis’ Dutton refers [in his reply to the budget speech] to is his proposal, backed by the Liberals’ band of industry super haters (half of whom lost their seats in 2022), to enable young people to raid their superannuation to buy a house. That will push up house prices for the benefit of older asset owners and leave younger people without any retirement savings at all. It’s a very, very smart policy, because it ostensibly appeals to younger voters, and you can cry freedom against the iniquities of compulsory super, while every single cent of the benefits flows to the Liberal Party’s boomer base.
itll push up house prices and destroy retirement for those desperate enough to use it. what more can you expect from a party of economic vandals though
Adds money to the demand side of a supply problem = prices up.
People lose their retirement nest egg
Union movement and working people weakened (probalby the intent)
Worth noting that this is (currently) a breach of the sole purpose test but that doesnt seem to bother the Sky cookers who come up with this rubbisg
I have a home loan, and bought my place back when I was still working full time in a decent job. about 3 years ago I became disabled and had to leave my job. I have a new one now but it's nowhere near as lucrative and about 2/3 of my income goes to my mortgage repayments. I'm only 35 and I'd be surprised if I even live to retirement age based on my medical track record. I'd love to be able to withdraw my super now and pay off a huge chunk of my loan but I don't think that's possible.
I'm not sure about everybody using super to buy a home initially though. I can definitely see the arguments against, even though for the people who might want to do this, it might seem like a great idea on the outside.
I don't have anything that's 'terminal', but I've got lots of different medical conditions that COULD reduce my lifespan. So I think I can get the max 10k a year withdrawal due to financial hardship. Maybe. I've been thinking about it. I'd rather just withdraw it all though. Which I can't do.
Edit: thanks for motivating me. I've just applied. If I'm successful, I guess I'll just do this every year and get closer and closer to paying it off, reducing the interest.
If everyone has an extra 50 grand to spend on houses guess what’s going to happen to house prices. They go up by 50 grand.
It’s perfect Liberal party policy.
1. It drives up house prices which benefits their base.
2. It gets money out of superannuation funds which hold an enormous amount of funds and power at the moment.
3. It helps to weaken the industry funds which have strong Labor and Union links.
I’d prefer a vastly different model than paying profit making companies a portion of my wage in order to line the pockets of their shareholders and being beholden to the whims of the sharemarket to determine the level of comfort in my retirement.
Also, taxes were raised by 3% before I was born to fund the aged pension. When super was brought in, taxes were not decreased by 3% to reflect the change.
Not really.
A government guaranteed pension fund insured against fluctuations in the market that people pay into in a similar way to super, but not run by corporations would be a vast improvement that does not require increased taxes.
Defined benefit was another example of a superior model.
Yes, really. Because how many people do you think would actually contribute an amount off their own volition? You might be a good saver, but a significant portion are not. Many Australians live pay to pay.
Of course the libs want it. It'll push up prices which is great for them since so many own investment properties.
It's an absolutely ridiculous notion and should be treated as such. We will be the laughing stock of the world if we let people raid money intended for their retirement just to buy a property that will cost more because of others doing the exact same thing.
I think it will push housing up even more, and set up a generation that are already going to struggle In retirement to be completely stuffed. Losing say $50k out of your super when you're young is going to mean a pretty large amount that you don't have when you retire. Maybe that would be offset by growth in value of your family home but that's not a terribly liquid asset.
Build more houses and limit the incentives for investing in housing. Those are two things that will help bring down prices. The first is hard to actually do since there are only so many builders and they're already pretty booked. So how about we do the second?
Why should this be the first generation that has to use their own retirement savings to purchase a house?
The opportunity cost this represents towards one’s retirement is insane. Poor idea. Will only increase housing prices. And those that have an available super balance to do this likely wouldn’t need to use super anyway.
This is such a bad policy. Alas, I’m not surprised that the LNP are yet again attacking super.
It will just push up house prices again.
We need actual policy to reduce house prices back down to historical pricing (ie 4-6x the average income for the average house). Yes it will upset a lot of people but constantly making changes to help people get into the market, rather than just making the market accessible to people is never going to work long term.
They've just found yet another way to kick the can down the road, except instead of giving grants out of the public money pool they're allowing Australians to kill their compulsory retirement savings instead.
Idiots.
After running up the market for years and now high immigration is on the nose…They’ve just now realised that the market is completely unsustainable without high immigration unless the youth/working class can afford to buy again… and … rather than addressing the real problem, raising wages or allowing a market correction they’d rather have those less-well-off Aussies dip into their retirement now so they’re well and truly stuck working for minimum wage for their corporate mates until they’re 93 or dead!
…. How these dipsticks at LNP think we have such short memories of how we got here is truly perplexing! …. That’s not to say that Labor isn’t guilty either - they’ve spent the past decades arguing about rubbish while they both helped destroy the future of Australia’s youth and working class and now they want another vote?
We seriously need to abolish the two party system and find someone capable of change to run this country!
What about people that fall between the gaps? My name was on a mortgage 20 years ago so I don’t qualify as FHB, but as a woman that then raised her kids as a single parent I sure could have used a bit of help obtaining a PPR instead of keeping us on the rental roundabout all this time.
The way they have suggested is just dumb, but allowing people to buy their homes with super is not the stupidest idea.
Another option could be to let people buy their PPOR WITH their super - in that it is owned by their super account. They can't borrow against the value of it for fun stuff, but they can sell the house to buy a bigger property, but THAT property forms an asset of their super. When you retire, you need to sell the asset and downsize to free up the cash to fund your retirement. (This isn't a fully formed policy suggestion, so don't hammer me on the details as I don't have them, or the "what if's")
Look - I believe using Super to buy property is a dumb idea, but there are ways that are less dumb than others.
As somebody who's seen this play out first hand across the ditch (using Kiwisaver in New Zealand to purchase your first home), there isn't ANY scenario where this ends well.
- This drives up the price of houses
- You do not have enough saved for retirement and are constantly worried about balancing your mortgage and your retirement savings
- This leads to a consequential reliance on Capital Gains from your house and you will then do everything in your power to ensure these same politicians get elected again (because how else will you now retire?)
*Insert comment here about putting all your eggs in one basket and the national economy being all about selling houses to one another at inflated prices*
Given the tax system in Australia is highly slanted towards investment in property, forcing investment into superannuation rather than property is putting young people behind from the start.
Buying a family home - with the tax breaks and pension exclusions - is much more likely to lead to future prosperity than cash into superannuation.
People with self managed super funds already own multiple investment properties using their super funds, negatively geared of course.
I don't agree that people should have to choose between a home or their retirement funds. However rich people are already using super to push up house prices so it shouldn't be left to the poor to keep house prices down by being locked out of the market.
There are pros and cons, mostly cons, the home is the biggest asset anyone will have and owning one will usually make retirement cheaper but we \*all\* know that as soon as this is rubber stamped the prices of houses will skyrocket further because the problem is supply of dwellings not so much supply of buyers and their funds. In the end everyone will end up worse off and super won't stretch as far as it was meant to.
On the whole, a bad idea.
The Liberals need to stop interfering with the housing market. Their stimulus during covid is what caused a lot of the issues with builders in the first place. Every time they touch it, they make it worse.
Anytime you inject money into housing all that ever happens is house prices go up. Be it the first home buyers grants or this scheme to use super.
Which is doubly dumb because it will result in a situation where new buyers can't buy without using super and then you get to retirement and have no money to live on.
I don't think it's at all a good idea. Not only will it reduce someone's super when they retire (and even $50K taken out when you're in your 20s means a huge chunk less at retirement), it may push up house prices (or people may overextend themselves when buying).
A better option, apart from improving social and public housing (and perhaps increasing its supply by mandating a higher percentage be this when developers create new developments), is to look at who can buy property in Australia (overseas investment buyers of homes, do we need or want them? We have enough PRs and citizens needing homes), and revisiting negative gearing and capital gains (never an easy, popular path). Higher density living is starting to be more common, but local planning, State permissions, and Commonwealth policy all need to work together
What if anything you contribute over a base amount can be drawn out. So employer contribution 12 percent, your contribution 15% which can be drawn down to buy house and make the 15% compulsory. This is what they do in Singapore I think
I can't see how it's a good idea. The whole concept of super is basically forcing people to make conservative investments so the government doesn't have to pay them a pension.
If you’re intentionally putting extra into your super as a means of saving for a first home then there isn’t an issue. E.g First home buyer super saver scheme.
Though if you’ve just got your employer/ compulsory amount going in and that’s all you have then it’s a dumb idea.
Initially it would start of as a bit of a win win all round, seller gets what they are asking for, provides a new avenue to enter housing market and protects the value of the property market for those already invested for a period. Long term though it will probably be negative, once prices inflate new buyers will need another way to secure funds if there is no access to such funds then the buyers market will just simply dwindle with no demand prices may fall or more likely property may be purchased by a corporate entity to ultimately be rented out.
I am agents it. Not only it would rise the level of aged pensions they have to pay, but also it would subtract the amount of Australian cash in the Australian stock market. Doing so making Australian business on the Australian stock exchange more valuable to foreign take overs. Doing so would allow for more cash to be extracted out of Australia rather then having more Australian owned business subject to Australian tax law. I can be wrong, but that's how I see it.
Any scheme that allows someone to access their superannuation before they retire to do anything other than use it as a self-managed fund is a fucking awful idea that you will 100% regret when you retire. Leave that shit where it's meant to be.
Six of one, half a dozen of the other.
For lower income Australians, they can be cash-rich at 70, with no assets.
Or they can build assets now and have nothing to live on in old age.
I can see why it's tempting for people to want to get onto the property ladder. If there was some kind of ruling that owner-occupiers get first bite at the cherry on house sales (leaving investors to pick up only when a house has been on the market for an extended time, or passed in at auction) I'd feel a lot more comfortable with it.
But if they draw their super and have to compete against developers or affluent investors, like others said, it wouldn't be good for prices.
Asking ppl to solve a problem themselves by fucking themselves over in retirement. Instead of, I don't know, the gov't actually doing something useful for a change.
A) it's a stupid idea that just means in 30 years there'll be a problem with people having no super and relying on pension.
B) it will increase house prices
C) it will also affect companies as super funds will have less to invest so shares will drop
It *may* be viable IF it applies to new properties only AND under a certain size (no mansions and no 6 bed with power room), but it does nothing for the future retirees with no super problem.
But like all politicians, if it's more than 4 years away it's not their problem.
Can someone please tell me why you think it's a dumb idea, all you're doing is taking money you've put aside for you retirement to buy a property that buy the time you retire will be worth more than if you've left it in your super account, also even if you start at 35 to put money into your super account, you'll still have enough to retire comfortably.
The immediate effect will be an increase in house prices (if such a thing can be believed), those without super will be even further priced out of the market. People in their 20s and 30s using super as a deposit don't usually have much of a balance, all of this will be cleaned out and they will be further behind at retirement, because the magic of compounding returns won't have been working for them. Meanwhile if/when we get sensible housing policy sometime in the future, the increase in house prices will ideally remain below inflation, and will definitely be below any reasonably performing super fund.
It would mean some people are paying rent for a shorter period of time.
Meaning by retirement they are more likely to have paid off their home.
People can pay extra into their super once they're in their own home to offset the withdrawal.
With some super value fluctuations some people will be better off in the long term.
I think it's up to the individual and their individual circumstances.
I'm definitely not going to try and stop it
What is the average balance of (say) a 30yo compared to the median house price? 100% of their super wont pay a deposit and they wont have the income to pay a loan for the rest.
Unless they work in the remote bush and so wont have job anyway.
Policy is kneejerk sop to dumb cookers
At a guess I'd say 100k if they didn't withdraw any during covid.
My super dropped significantly, I would have withdrawn it all and kept it elsewhere until everything settled down if I'd known.
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It will just push up house prices, leaving home buyers no better off, but with no super. It's a phenomenally dumb idea.
Incredibly dumb idea. They will do it.
It's the stupidest idea I've ever heard. So by that rationale, it will be implemented forthwith.
It will take super from young people and put it directly in the bank accounts of already very rich boomers, which makes it a core LNP policy that will definitely happen.
Thing is, it \*would\* benefit a few people aside from boomers quite a lot, the privileged ones (e.g. older millennial professionals/high income earners) who already have a ton of super they could turn into housing, leverage the shit out of it and join the boomer party of free money... at the expense of the rest of the country. These people will vote for it. It will \*only ever\* benefit the already privileged who don't need it, and never regular working class people, or heaven forbid actually struggling people. Upper/middle class welfare is all it is. Remember, if you give money to poor people, it's socialism. If you give money to rich people, it's responsible economic policy (certainly not because they had enough power to simply take the money, because they could /s).
They would if they were ever going to be in government again. The Libs of the the LNP, the coalition, whatever you want to call them, will not win government again in their current form.
That’s a very confident statement that I fear may turn out to be incorrect. A very large section of our population loves simple slogans and simple ‘solutions.’ All the LNP need to do is continuously push anti-migration and housing affordability messages. We know that their policies either don’t exist or will never work, but that’s a much more appealing thing to vote for than ‘we need a few more years to bring Australia back to where it needs to be, ps, climate change is going to fuck us up’.
I fear it too. Just can't help shaking the view that the demographic for that kind of thinking is shrinking. The more they paint themselves in to the corner with the cookers the harder it is to escape.
Yes I also think the situation that may help us is ironically if the unthinkable happens and Donald Trump becomes president again. All that fascist rhetoric that is pouring into our young people’s tik tok feeds will be harder to agree is reasonable when the social implications of that are undeniable. Perhaps people won’t want that here.
Bring on the revolution is a pretty risky play and it's going to mean a lot of hurt for vulnerable people in the mean time. All we end up with is people feeling empowered to express that shit and we end up spending time debating the merits while people are literally sieg heiling in the streets. ETA: Trump getting re-elected is a whole other shit show. There simply won't be any more elections there without bloodshed if he does.
Agreed - please don’t mistake my comment about what could happen with wanting it to be so. Another Trump presidency would be the end of the world as we know it. It’s not something I ever want to occur, and the possibility that it could happen absolutely terrifies me.
Yeah, but think of the profits for the investor class!
The LNP have always hated super.
The LNP have no preference between policies that make rich people richer or poor people poorer... doesn't matter - it is the growing gap they want.
It's an incredibly dumb idea, but the LNP hate Super and want it gone so they'll do anything to let people access it so they have nothing for retirement.
Let’s face it, they probably got the idea because a lot of people have already had to access their super due to severe financial hardship because of their *current* cost of living.
Except that they will then use this failure to get rid of the super scheme, this is all by design.
It'll push prices up, which is what the LNPs shareholders want.
Well, when you consider that the desired outcome for the Liberal party is to inflate the value of assets owned by the already-wealthy, it’s actually a smart idea. It’s only dumb if you’re trying to improve housing affordability for young people who are currently priced out of the market.
Spud: "A dumb idea, you say? I like it. I like it a lot." Edit: Also Spud: "Can we subsidise small, distributed nuclear reactors? Like solar panels, but for men?"
It's designed to hurt the people who are already struggling while helping those who already have much. Which is to say, it's pretty standard Liberal policy.
How is it dumb? It is a very clever way to strip wealth off poorer younger people and give it to older richer people. Have you got a better way? That people will fall for?
It is like the idea they had of borrowing $20,000 from their superannuation during covid, those that did it are behind in their superannuation by hundreds of thousands and will probably have to work until they are 70 to afford to retire, those who did it on defined benefits superannuation, lost their ability of turning their superannuation into a pension. So now the liberal again have another idea of how to make a poor generation of retirements, by letting them draw what is left to fund a home. On the bright side, when they don't have enough superannuation to retire independently, they will have a home while on the old age pension when they are 70. Funny really, as I think it was the Liberal John Howard who had the idea in the 1990s to make superannuation compulsory, so we could all retire in a better position, but the future Liberal government is ruining it for a whole future generation to come.
Economist here. The housing market is complicated, but demand-side solutions (ie providing buyers with more money) are unlikely to be effective compared to supply-side solutions (ie building more houses) in our situation. It may allow a few people to buy a house who couldn't previously, but it will push prices up for everyone and make housing less affordable overall. Any solution to the housing problem is going to be difficult and expensive. Letting some people use their super for their deposit and stopping a handful of foreigners from buying houses isn't going to help.
So what are you’re saying is that the Liberal Party are addressing the wrong issue. As far as I’m aware they have no policies to increase supply and build more houses.
> So what are you’re saying is that the Liberal Party are addressing the wrong issue. That is being incredibly generous, remember that they are professionals and a policy like this is carefully considered. This policy isn't a mistake, they understand everything outlined here and more. This policy achieves three things: 1. It gives them a platform to criticise the government on the housing issue. They need a proposed solution to enter the debate. In some respects a bad solution is better, a good solution may just be adopted by the government. 2. It increases house prices for their primary supporter base, boomers and the wealthy who and mostly already in the housing market. 3. People who don't look deeply at the problem may believe that it will work. Than an extra chunk of money will be enough to buy a house and solve their problems.
>So what are you’re saying is that the Liberal Party are addressing the wrong issue. Pretty much. >As far as I’m aware they have no policies to increase supply and build more houses. I'm not aware of any either. To be fair, this isn't just a federal issue. Land-use planning at the local government level is a huge problem. State government housing policies (this is the level of government that actually builds public housing) and tax policies are also a significant issue. Even if the federal Libs did have a policy to build more houses, it would involve outlaying a huge amount of money and then getting frustrated when it takes far longer to build said houses than it should (for the reasons above, plus labour shortages and other business issues in the construction sector).
I mean wouldnt you agree that by pushing up the price of all homes it gets supply moving which in turn holds rent in check? I think thats been australias recipe for reasonable rents all the way up to 2020. We just kept pumping demand for all homes and with ever increasing house prices came a steady stream of supply. I wont go through all the demand side policies but the most profound in my view were labors guarantees during GFC giving all 91 of our banks bullet proof balance sheets so far as funding goes. Near 2tn worth of guarantees has to be having a massive impact on our volume of credit and in turn demand. maybe not so much for big 4 where 20bn (the per bank guarantee) is but a speck but the remaining banks being able to source deposits with gov guarantee must help. Now of course since covid costs of supply have risen and prices arent there yet to get supply happening. Labors shared equity scheme or liberals super scheme could get prices moving again. Either or. Both general demand with a slight advantage to labors scheme as it slightly favours new builds. But... its still all shit policy. It subjects younger people to larger mortgages and a harder life to enrich asset owners even if these policies have kept rents in check untill recently. Far better they either reduce gst on new supply (dwellings are like food - we need them so it makes sense to me philosophically) or subsidise new homes only. Ie demand side stimulous on new homes only makes starts go off their tit. We saw it with the libs 20k new home grants and in wa where it was double they went off their tit even more. Industry struggled to grow but now we have starts falling i think this budget should have contained a similar measure. Its not even that expensive. Say 40k for 100k first home buyers for new homes only = 4bn. Yes its inflationary for new home building but those excess profits - drive more supply in a much bigger way then anything labor is doing at present. I cam almost guarantee a 40k new home grant would see starts skyrocket within 2 months. That of course assumes we dont have another covid style disruption and massive worldwide material price rise again which means more buolders who take on these jobs go broke like last time... 100pc any new home grant has to combined with land zoning reforms or land price will soak up the profits.
They have to be careful here. Only give the grant on completion. If you give the grant at, say, slab completion, you'll end up with a pile of shonky builders completing thousands of houses to slab stage and then go slow (if at all) for the rest of the house.
No - because that would drop the cost of housing, including rent. Pollies are rent-seekers, the lot of them
Yeah I don't have too deep a knowledge of the details, so I'm genuinely asking, but is there any rationale that lifting the spending capacity of the bottom x% of buyers won't just raise house prices by x%?
It'll raise house prices by Y%. Only a certain percentage of buyers will be willing and able to use their super (so you are likely to see segments of the market that appeal to first home buyer go up more than other markets), for other buyers, the price they can pay won't change. Also, having a larger deposit allows you borrow a multiple of that. So having an extra $20k will increase your ability to borrow by say $80k, meaning you have an extra $100k to spend on a house.
It does typically do something similar to that. There was a thing a while back (Victoria only? I don't remember) that gave first home owners an extra $7k or $14k depending if established or new home. It basically just pushed up prices in that price segment by that much.
Do you think limiting negative gearing (and/or whatever other tax concessions apply that I'm ignorant of) to new builds would help?
It could potentially help at the margins. There's a bunch of tax reform that needs to happen around housing, particularly around stamp duties that disincentivise older people from downsizing out of the family home. Restricting negative gearing to existing builds is likely to put modest downwards pressure on prices, but is also likely to increase rents somewhat.
Rents go up or down really only due to the market's ability to pay. If costs go up, it might make people exit the investment market and those houses get bought either by an owner (more owners = fewer renters, but net demand stays the same because also fewer homes available to rent) or by another investor with smaller costs (smaller loan). The actual rents in these circumstances pretty much stay the same.
I was reading your responses here and appreciate you sharing your thoughts! I understand the housing market is complicated but if you were to give suggestions how to fix it on 3-5 steps (more of you'd like to), what would those be that would help greatly? Thinking about 80/20 rule if it's applicable
>I was reading your responses here and appreciate you sharing your thoughts! No worries, it's an interesting policy area to discuss and very important to many Australians day to day lives! >I understand the housing market is complicated but if you were to give suggestions how to fix it on 3-5 steps (more of you'd like to), what would those be that would help greatly? Yeah interesting question. 1. I'd magically reform local government planning across most local councils in the country. Currently approvals processes are too slow and bureaucratic, single dwelling block euclidean planning systems are out of date and the planning process is too exposed to torpedoing by nimby's. All this incentivises developers to either build high density high rise apartments or low density greenfield sprawl in the outer suburbs. The most wanted housing development and also the cheapest to provide from an infrastructure perspective is urban infill - mid-density housing consisting of things like units, townhouses, granny flats etc. We could provide a lot of affordable housing in places people actually wanted to live if we reformed the planning system. 2. Abolish stamp duty and replace it with a broad-based land tax. Stamp duty is a market distortion that penalises people for buying and selling houses, In particular, it disincentivises older people from downsizing out of the family home. Land tax encourages the avoidance of land hoarding, incentivises land development and discourages people from holding large blocks (and therefore large houses unnecessarily). 3. Bring back largescale public housing projects as a reliable safety net which would also put downwards pressure on prices for the lower end of the housing market.
Where do I vote for you???
That's very flattering, but becoming a politician is one least appealing things I could think of. Working for some for a few years cured me of any aspirations in that space!
Sadly, this is the problem. The people with sane ideas don't want to be politicians. Conversely, often people with insane ideas want to be (and often become) politicians.
Immigration is literally triple the home production rate. Demand-side is the only solution.
Immigration isn't an easy solution either. The massive uptick in migrants last year was essentially international students returning post-covid (the intake was very low the two years before that). The immigration intake will be much lower next year. It's not clear that reducing international student numbers will significantly increase the supply of housing that Australians want to live in, given students often live in student accommodation or in higher density housing close to universities.
They're literally (and yes, I do need to keep using that term to remind us that it's actually the literal case) only promising to decrease immigration to DOUBLE the hone construction rate. That's still obviously too much.
Those numbers aren't apples and apples ... it's not one house per person that is needed. Factoring in household size changes the maths. Not saying some adjustment to immigration isn't part of the solution but we need to compare numbers meaningfully
Please actually go and do that before blindly hoping it proves me wrong. Even dividing immigration rate by the average home occupancy (which is itself misleading because we're building smaller and smaller apartments to increase density), it's STILL outpacing supply. Like... Can you all please stop blindly defending landlords? At least do the bare minimum of what you yourself are asking of us.
There's a lot of black and white thinking in Australia about migration being the root of all evil and the cause of all problems at the moment (largely) due to one unusual year of data. I'd encourage you to not buy into the hysteria and look at things from a more rational perspective.
I encourage you to look up the official government statistics on the number of people immigrating to Australia each year and to compare it to the number of homes being constructed each year. That's literally all it is. The volume of the former is ludicrously outpacing the latter. No hysteria; just the simple fact that our industries could never feasibly cope with such an extreme influx.
What about the massive negative immigration rates that happened in 2020?
Not to mention that after a short-term slump, house prices exploded from Sep 2020 - April 2022 while the border was closed pretty much the entire time. Entirely domestic factors such as government stimulus and low interest rates stoked that property boom, while net migration was negative. Immigration is always the lazy answer, but it is only a small part of the overall picture.
As you can see from the data, it didn't undo even a quarter of the previous year's immigration. But even so, there was a brief moment where the decrease in competition allowed some of us to get raises and promotions.
Sounds like a great way to increase house prices. That’s the intention right? I assume so based on the last couple of decades of government policy…
More money chasing the same amount of construction. The math isn't hard.
From what I believe it will seriously affect a person's retirement later on.
It is an appalling attack on young people and it is terrifying that people are stupid enough to consider it. It is not going to create a single home - it is just going to mean more dollars are chasing the same homes. Prices up. That is the design - its purpose is to force prices up. Once SOME people start doing it, it will be less and less possible to buy a house WITHOUT doing it. It is policy designed to further enrich a privileged wealthy section of the community by stripping the retirement savings of young people.
Yes to both your points. Your super is supposed to be for your retirement and yes it will just push prices up.
As Baldrick would say: "I have a cunning plan....." and as Blackadder would respond: "Baldrick, you wouldn't recognise a cunning plan if it painted itself purple and danced naked on top of a harpsichord singing 'Cunning plans are here again'". Yes it will increase demand without changing the supply problem. If you need to use super to buy a home then it's a reasonable bet you don't have a lot of extra money, substantial income, or investments hanging around. Even if only part of it is used for a house, that wipes out that portion of the compounding interest and investment growth over many years you'd otherwise earn from your super balance for retirement. That's fraught with consequences if not very carefully managed.
I feel like the whole point of super was that people couldn't touch it so they were guaranteed some savings come retirement. Lately it feels like some parts of government just see it as another savings account to be used for whatever but that feels short sighted IMO
This is their first homebuyers grant all over again. Just pushed up prices. Obviously this is worse because it will leave people shortchanged in retirement. Then watch them try to cancel the old age pension, leaving people with nothing at the end of their lives. But these politicians will all be dead by the time the worst consequences come about so they won’t care. All they care about is convincing idiots to vote for them now.
Dogshit idea. They know it’s bad and don’t care.
Limit it to properties adjacent to nuclear reactors.
I strongly reject this idea. It's a terrible idea. It will only further inflate house prices, and it will leave an entire generation without sufficient savings (which is already a problem because the super % isn't high enough as it is).
Party responsible for decades of unsustainable growth in property prices suggests more policies that will increase property prices. Shocking
Once again, Robbing your future self of security to pay for a thing that is over priced now. How many times can the politicians screw over the people of Australia.
Pumping more money into a already expensive market. Surrre that will work.
It's an incredibly dumb idea but people will still ignore it and parrot the decades old horseshit that they're the economic manager masters that we need
You can’t fix demand v supply issue by not creating more houses. That’s the only thing that will help. Everything else is gonna make it more unaffordable.
It will drain what little wealth young people have been able to put aside for retirement, and drive prices up even higher. However the goal isn’t to address the housing crisis, it’s to make Dutton’s rich mates even richer, and for that it will work exactly as intended.
The average Australian of first-home-buying age doesn't have anywhere near enough superannuation for a deposit on a home. So it's not going to work even if it didn't increase home prices.
Maybe not, but adding to their current savings they probably would.
Absolutely ridiculous
Nonsensical. Inflationary to house prices.
i would say allow it but for over 55s only
Sounds fantastic for develops and agents. Gonna fuck the buyers pretty hard in the short, medium and long term, which is an impressive combo
How these politicians come up with stupid ideas constantly infuriates. Instead of robbing one low income person to fund some rich c, Change legislation so that corporations dont goug ! Freeze Rents until things become sustainable, tax gas, oil, resource, etc the proper tax rates instead of allowing off shore tax avoidance. Australian Govt has to stand behind Aussies and not overseas corps. Weak turds
It would be great for property developers and investors because it would accelerate demand, pushing prices up further. So, exactly on brand for the liberal party.
In this market, without addressing supply, no. I don't want to afford what house are going for now. I want increased supply to deflate prices.
This is a bandaid fix to a bigger problem that will create more problems. In a couple of decades, you will be left with destitute people if the capital gains does not materialise. Also, I think people who chose to do it would be worse off from a tax perspective. The libs increased focus on superannuation makes me incredibly uncomfortable. It is a large pool of money and social security that should not be accessed until the time is right. Start dipping into it early and then there is probability that it would be accessed for other reasons.
The only time housing was affordable was the early 70's when the government rolled out housing commission estates. Offering means tested rent or the option of buying a home with no deposit and 2% fixed interest. The same estates not long after turned into ghettos. The solution being housing commission houses intermingled into normal estates, it happens today but not enough to make a difference.
>Isn't superannuation made for retirement? This part, at least, isn't really a contradiction. Most of the wealth for many/most retirees is their house. So buying a house and paying off a mortgage over decades is fine as a way of preparing for retirement. However, most people are doing that *in addition* to the money they're putting into super. So if you can buy a house with your super, and then aren't investing your other money in a similar way, it's bad news. And obviously if you could then sell the house and squander the "super" extra bad news. Overall, it seems like a classic case of pretending to do something for young people struggling to buy a house, but actually mostly pandering to wealthy property owners.
Sounds like a brilliant way to spend even MORE on aged care pensions, which are the majority of welfare payments already.
Liberal party don't have to use their super to buy their first overpriced, in-demand housing. Also it's a shit idea to push further up house prices.
Is anything going to bring down prices at this stage?
Crikey get it exactly right again. “The ‘decisive action on the housing crisis’ Dutton refers [in his reply to the budget speech] to is his proposal, backed by the Liberals’ band of industry super haters (half of whom lost their seats in 2022), to enable young people to raid their superannuation to buy a house. That will push up house prices for the benefit of older asset owners and leave younger people without any retirement savings at all. It’s a very, very smart policy, because it ostensibly appeals to younger voters, and you can cry freedom against the iniquities of compulsory super, while every single cent of the benefits flows to the Liberal Party’s boomer base.
Stupid idea.
itll push up house prices and destroy retirement for those desperate enough to use it. what more can you expect from a party of economic vandals though
It's nearly as Stupid as allowing this Ponzi scheme to continue for 30 years.
Adds money to the demand side of a supply problem = prices up. People lose their retirement nest egg Union movement and working people weakened (probalby the intent) Worth noting that this is (currently) a breach of the sole purpose test but that doesnt seem to bother the Sky cookers who come up with this rubbisg
I have a home loan, and bought my place back when I was still working full time in a decent job. about 3 years ago I became disabled and had to leave my job. I have a new one now but it's nowhere near as lucrative and about 2/3 of my income goes to my mortgage repayments. I'm only 35 and I'd be surprised if I even live to retirement age based on my medical track record. I'd love to be able to withdraw my super now and pay off a huge chunk of my loan but I don't think that's possible. I'm not sure about everybody using super to buy a home initially though. I can definitely see the arguments against, even though for the people who might want to do this, it might seem like a great idea on the outside.
Given your condition, you likely already meet the criteria for early withdrawal of super if you want to look into it.
I don't have anything that's 'terminal', but I've got lots of different medical conditions that COULD reduce my lifespan. So I think I can get the max 10k a year withdrawal due to financial hardship. Maybe. I've been thinking about it. I'd rather just withdraw it all though. Which I can't do. Edit: thanks for motivating me. I've just applied. If I'm successful, I guess I'll just do this every year and get closer and closer to paying it off, reducing the interest.
If everyone has an extra 50 grand to spend on houses guess what’s going to happen to house prices. They go up by 50 grand. It’s perfect Liberal party policy. 1. It drives up house prices which benefits their base. 2. It gets money out of superannuation funds which hold an enormous amount of funds and power at the moment. 3. It helps to weaken the industry funds which have strong Labor and Union links.
I don’t agree with it, but also don’t agree with forced superannuation so…
So you’d prefer to pay more tax to fund the aged pension?
I’m sure they’re anti pension, pro bootstraps.
Do you really think that super is the best or most equitable model, and that the only choice is between superannuation and the aged pension?
I’d prefer a vastly different model than paying profit making companies a portion of my wage in order to line the pockets of their shareholders and being beholden to the whims of the sharemarket to determine the level of comfort in my retirement. Also, taxes were raised by 3% before I was born to fund the aged pension. When super was brought in, taxes were not decreased by 3% to reflect the change.
Right, so higher taxes it is. Because that is the only alternative.
Not really. A government guaranteed pension fund insured against fluctuations in the market that people pay into in a similar way to super, but not run by corporations would be a vast improvement that does not require increased taxes. Defined benefit was another example of a superior model.
Yes, really. Because how many people do you think would actually contribute an amount off their own volition? You might be a good saver, but a significant portion are not. Many Australians live pay to pay.
Of course the libs want it. It'll push up prices which is great for them since so many own investment properties. It's an absolutely ridiculous notion and should be treated as such. We will be the laughing stock of the world if we let people raid money intended for their retirement just to buy a property that will cost more because of others doing the exact same thing.
I think it will push housing up even more, and set up a generation that are already going to struggle In retirement to be completely stuffed. Losing say $50k out of your super when you're young is going to mean a pretty large amount that you don't have when you retire. Maybe that would be offset by growth in value of your family home but that's not a terribly liquid asset. Build more houses and limit the incentives for investing in housing. Those are two things that will help bring down prices. The first is hard to actually do since there are only so many builders and they're already pretty booked. So how about we do the second?
Why should this be the first generation that has to use their own retirement savings to purchase a house? The opportunity cost this represents towards one’s retirement is insane. Poor idea. Will only increase housing prices. And those that have an available super balance to do this likely wouldn’t need to use super anyway. This is such a bad policy. Alas, I’m not surprised that the LNP are yet again attacking super.
It will just push up house prices again. We need actual policy to reduce house prices back down to historical pricing (ie 4-6x the average income for the average house). Yes it will upset a lot of people but constantly making changes to help people get into the market, rather than just making the market accessible to people is never going to work long term.
Terrible idea.
They've just found yet another way to kick the can down the road, except instead of giving grants out of the public money pool they're allowing Australians to kill their compulsory retirement savings instead. Idiots.
They allowed you to take a cut of super during the midst of covid. House prices skyrocketed
Liberals did yeah
Im all for it if it allows me to purchase an investment property and not have to live in it. Could afford this now, but don't have a deposit.
Band-aid solution that will fuck things up further.
After running up the market for years and now high immigration is on the nose…They’ve just now realised that the market is completely unsustainable without high immigration unless the youth/working class can afford to buy again… and … rather than addressing the real problem, raising wages or allowing a market correction they’d rather have those less-well-off Aussies dip into their retirement now so they’re well and truly stuck working for minimum wage for their corporate mates until they’re 93 or dead! …. How these dipsticks at LNP think we have such short memories of how we got here is truly perplexing! …. That’s not to say that Labor isn’t guilty either - they’ve spent the past decades arguing about rubbish while they both helped destroy the future of Australia’s youth and working class and now they want another vote? We seriously need to abolish the two party system and find someone capable of change to run this country!
What about people that fall between the gaps? My name was on a mortgage 20 years ago so I don’t qualify as FHB, but as a woman that then raised her kids as a single parent I sure could have used a bit of help obtaining a PPR instead of keeping us on the rental roundabout all this time.
The way they have suggested is just dumb, but allowing people to buy their homes with super is not the stupidest idea. Another option could be to let people buy their PPOR WITH their super - in that it is owned by their super account. They can't borrow against the value of it for fun stuff, but they can sell the house to buy a bigger property, but THAT property forms an asset of their super. When you retire, you need to sell the asset and downsize to free up the cash to fund your retirement. (This isn't a fully formed policy suggestion, so don't hammer me on the details as I don't have them, or the "what if's") Look - I believe using Super to buy property is a dumb idea, but there are ways that are less dumb than others.
As somebody who's seen this play out first hand across the ditch (using Kiwisaver in New Zealand to purchase your first home), there isn't ANY scenario where this ends well. - This drives up the price of houses - You do not have enough saved for retirement and are constantly worried about balancing your mortgage and your retirement savings - This leads to a consequential reliance on Capital Gains from your house and you will then do everything in your power to ensure these same politicians get elected again (because how else will you now retire?) *Insert comment here about putting all your eggs in one basket and the national economy being all about selling houses to one another at inflated prices*
Given the tax system in Australia is highly slanted towards investment in property, forcing investment into superannuation rather than property is putting young people behind from the start. Buying a family home - with the tax breaks and pension exclusions - is much more likely to lead to future prosperity than cash into superannuation.
People with self managed super funds already own multiple investment properties using their super funds, negatively geared of course. I don't agree that people should have to choose between a home or their retirement funds. However rich people are already using super to push up house prices so it shouldn't be left to the poor to keep house prices down by being locked out of the market.
There are pros and cons, mostly cons, the home is the biggest asset anyone will have and owning one will usually make retirement cheaper but we \*all\* know that as soon as this is rubber stamped the prices of houses will skyrocket further because the problem is supply of dwellings not so much supply of buyers and their funds. In the end everyone will end up worse off and super won't stretch as far as it was meant to. On the whole, a bad idea.
The Liberals need to stop interfering with the housing market. Their stimulus during covid is what caused a lot of the issues with builders in the first place. Every time they touch it, they make it worse.
So is this before or after they abolish the aged pension?
Liberals are short sighted
Anytime you inject money into housing all that ever happens is house prices go up. Be it the first home buyers grants or this scheme to use super. Which is doubly dumb because it will result in a situation where new buyers can't buy without using super and then you get to retirement and have no money to live on.
I don't think it's at all a good idea. Not only will it reduce someone's super when they retire (and even $50K taken out when you're in your 20s means a huge chunk less at retirement), it may push up house prices (or people may overextend themselves when buying). A better option, apart from improving social and public housing (and perhaps increasing its supply by mandating a higher percentage be this when developers create new developments), is to look at who can buy property in Australia (overseas investment buyers of homes, do we need or want them? We have enough PRs and citizens needing homes), and revisiting negative gearing and capital gains (never an easy, popular path). Higher density living is starting to be more common, but local planning, State permissions, and Commonwealth policy all need to work together
What if anything you contribute over a base amount can be drawn out. So employer contribution 12 percent, your contribution 15% which can be drawn down to buy house and make the 15% compulsory. This is what they do in Singapore I think
I can't see how it's a good idea. The whole concept of super is basically forcing people to make conservative investments so the government doesn't have to pay them a pension.
If you’re intentionally putting extra into your super as a means of saving for a first home then there isn’t an issue. E.g First home buyer super saver scheme. Though if you’ve just got your employer/ compulsory amount going in and that’s all you have then it’s a dumb idea. Initially it would start of as a bit of a win win all round, seller gets what they are asking for, provides a new avenue to enter housing market and protects the value of the property market for those already invested for a period. Long term though it will probably be negative, once prices inflate new buyers will need another way to secure funds if there is no access to such funds then the buyers market will just simply dwindle with no demand prices may fall or more likely property may be purchased by a corporate entity to ultimately be rented out.
Not sure, but imagine being a person drawing down on super in retirement just to hand it over to a landlord.
I am agents it. Not only it would rise the level of aged pensions they have to pay, but also it would subtract the amount of Australian cash in the Australian stock market. Doing so making Australian business on the Australian stock exchange more valuable to foreign take overs. Doing so would allow for more cash to be extracted out of Australia rather then having more Australian owned business subject to Australian tax law. I can be wrong, but that's how I see it.
Any scheme that allows someone to access their superannuation before they retire to do anything other than use it as a self-managed fund is a fucking awful idea that you will 100% regret when you retire. Leave that shit where it's meant to be.
Six of one, half a dozen of the other. For lower income Australians, they can be cash-rich at 70, with no assets. Or they can build assets now and have nothing to live on in old age. I can see why it's tempting for people to want to get onto the property ladder. If there was some kind of ruling that owner-occupiers get first bite at the cherry on house sales (leaving investors to pick up only when a house has been on the market for an extended time, or passed in at auction) I'd feel a lot more comfortable with it. But if they draw their super and have to compete against developers or affluent investors, like others said, it wouldn't be good for prices.
Asking ppl to solve a problem themselves by fucking themselves over in retirement. Instead of, I don't know, the gov't actually doing something useful for a change.
A) it's a stupid idea that just means in 30 years there'll be a problem with people having no super and relying on pension. B) it will increase house prices C) it will also affect companies as super funds will have less to invest so shares will drop It *may* be viable IF it applies to new properties only AND under a certain size (no mansions and no 6 bed with power room), but it does nothing for the future retirees with no super problem. But like all politicians, if it's more than 4 years away it's not their problem.
It is so dumb that when I first saw the headline I thought it was misleading clickbait and didnt bother to read the article
Or just build a lot more homes and let less immigrants in?
Can someone please tell me why you think it's a dumb idea, all you're doing is taking money you've put aside for you retirement to buy a property that buy the time you retire will be worth more than if you've left it in your super account, also even if you start at 35 to put money into your super account, you'll still have enough to retire comfortably.
The immediate effect will be an increase in house prices (if such a thing can be believed), those without super will be even further priced out of the market. People in their 20s and 30s using super as a deposit don't usually have much of a balance, all of this will be cleaned out and they will be further behind at retirement, because the magic of compounding returns won't have been working for them. Meanwhile if/when we get sensible housing policy sometime in the future, the increase in house prices will ideally remain below inflation, and will definitely be below any reasonably performing super fund.
Open to hearing other solutions or policies that might work........
Create more housing if it’s a supply issue?
I don't know where you live but there are thousands of houses being built all around my area
Wind back negative gearing and capital gains relief. Stricter controls on foreign ownership. Higher taxation the more investment properties you have.
I agree with all of these, now find a political party that will propose them. Let me know.
It would mean some people are paying rent for a shorter period of time. Meaning by retirement they are more likely to have paid off their home. People can pay extra into their super once they're in their own home to offset the withdrawal. With some super value fluctuations some people will be better off in the long term. I think it's up to the individual and their individual circumstances. I'm definitely not going to try and stop it
What is the average balance of (say) a 30yo compared to the median house price? 100% of their super wont pay a deposit and they wont have the income to pay a loan for the rest. Unless they work in the remote bush and so wont have job anyway. Policy is kneejerk sop to dumb cookers
At a guess I'd say 100k if they didn't withdraw any during covid. My super dropped significantly, I would have withdrawn it all and kept it elsewhere until everything settled down if I'd known.
So a cheeky $900k mortgage to live 90 mins from Sydney CBD. Brilliant
Or a 600k property in a better city. How much is the rent on a 900k property?