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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Related articles:
https://www.yourlifechoices.com.au/age-pension/news/family-home-under-siege
https://www.yourlifechoices.com.au/retirement/retirement-income/challenges-to-pensions-and-pensioners
https://www.yourlifechoices.com.au/age-pension/income-and-asset-tests/family-home-under-threat-again
