The Governments latest version of a thought bubble on accessing super for housing is dangerous, increases financial risk, undermines the generation of retirement incomes, and will only serve to bid up house prices.
This proposal would just encourage first home buyers to use their own super to bid against investors who would continue to have access to the most generous property tax concessions in the world.That isnt a plan, its a sham and would just increase house prices.The best way to get more first home buyers into the housing market is to curb the tax concessions available to property investors.
Malcolm Turnbull previously called accessing super for a house deposit a thoroughly bad idea. Now this stands for nothing Prime Minister is being dragged to seriously consider crazy ideas from the Liberal backbench.The Turnbull Government will stop at no crazy idea including breaking open Australias retirement income system to avoid reforming negative gearing and the capital gains tax discount.
At a time when the regulatory agencies are very concerned about housing risks in the economy, the Government wants to encourage first home buyers to go all in on one property through their limited super savings.A less diversified superannuation fund means higher risks for first home buyers as they save for their retirement.
When the regulatory agencies and banks are trying to reign in some of the investor demand in the current market, the government wants to put more fuel on the fire by adding even more demand.
A policy of this kind would see first buyers bid up properties with other cashed up investors which is just a recipe for higher and higher house prices worsening housing affordability.And the great irony here is that the Government is currently seeking to legislate an objective for superannuation linking it to retirement income, while this latest thought bubble directly contradicts that objective.