‘Mind-boggling policy’: Super lobby blasts Peter Dutton’s plan for first-home buyers

The super lobby has criticised the federal Coalition’s plan for first-home buyers to dip into their retirement savings, saying the lack of supply in the market is the main issue.

ASFA says giving first-home buyers early access to their super will not solving the housing problem. Picture: Max Mason-Hubers

The superannuation lobby has hit back at the Coalition’s fresh push for first-home buyers to use their retirement savings to get on the property ladder, saying people need genuine housing solutions that address the lack of supply in the market.

Weeks after Liberal leader Peter Dutton reaffirmed the Coalition’s housing pledge, his home ownership spokesman, Andrew Bragg, on Monday said vested interests were trying to distort the super-for-housing debate, as he argued people would get a better outcome from investing in their own house than leaving it in super. But in an interview with The Australian, Association of Superannuation Funds Australia chief executive Mary Delahunty said the Coalition’s plan was a “mind-boggling policy”.

“It is baffling to me, and it will not build a single house,” Ms Delahunty said. “Time and time again we hear the problem of housing in Australia is one of ­supply. I don’t know if it’s deliberately ignoring that very well-proven economic point, or if it shows a lack of understanding as to the elements of demand and supply, but it is a mind boggling policy to us.”

ASFA chief executive Mary Delahunty. Picture: Ian Currie

Months out from the federal election, to be held by May at the latest, the Coalition has pledged to let people access up to $50,000 of their super savings to buy their first home, with any money taken out required to be returned to super savings once the home is sold. Separated women will also be able to access their super for housing as part of the policy.

Allowing aspiring homeowners to take up to $50,000 out of their retirement savings would do little to help those on lower incomes, Ms Delahunty said.

“Those with higher super balances already achieve home ownership, it’s been proven time and time again,” she said.

With the federal budget edging closer (it is scheduled for March 25), Ms Delahunty urged the government not to use super as a political football but to tinker at the edges where needed.

“The sector is performing really well … so if there’s no problem to solve, don’t try and solve it,” she said, adding that the budget was “an opportunity to build on the strength of the system”.

ASFA’s budget wishlist includes lifting the upper threshold for the Low Income Superannuation Tax Offset; fully funding the ATO to pursue employers that don’t pay their workers’ super; giving more money to ASIC to improve the Moneysmart website; reviewing the treatment of super payments owed by insolvent employers; and expanding super contributions to all employees under 18.

Originally published as ‘Mind-boggling policy’: Super lobby blasts Peter Dutton’s plan for first-home buyers