Turnbull to face cabinet clash on housing

Cabinet ministers will today mount a joint push for ­the PM to back a ‘super for first-home buyers’ housing package.

Malcolm Turnbull in Mumbai yesterday.

Senior cabinet ministers will today mount a joint push for ­Malcolm Turnbull to back a “super for first-home buyers” housing package ahead of a ­meeting of the government’s budget razor gang this morning in Sydney.

A clash looms after Mr Turnbull cautioned against the idea to allow Australians access to their superannuation but he did not rule out its inclusion in the housing package.

Senior cabinet ministers, led by Resources Minister Matt Canavan, have expressed in-principle support for a proposal that would allow young families to access super contributions based on their personal savings.

“This is, I think, a legitimate idea ... it’s been used in other countries and it’s something we should certainly consider,” Senator Canavan said yesterday.

Scott Morrison and key ministers responsible for housing policy including Michael Sukkar, Angus Taylor and Zed Seselja are believed to be in favour of the model.

Mr Turnbull, who previously described the idea of accessing super to buy housing as a “thoroughly bad idea”, will be briefed on the government’s housing package at an expenditure review committee meeting today.

Speaking in India yesterday, the Prime Minister refused to buy into “pre-budget speculation”, but repeated his belief that the sole purpose of superannuation was to fund retirement. “The purpose of superannuation is to provide for retirement — that is the legislated object of superannuation. It is to provide for retirement that is the whole purpose of it and that is why the whole system is set up in the first place,” Mr Turnbull said.

He said the superannuation system had been strengthened by the reforms made in last year’s budget, which he said had made it fairer and more flexible.

“It is a very important part of ensuring that Australians, when they retire, have a dignified and comfortable retirement,” he said.

Mr Turnbull is understood to have been advised by staffers about concerns that the superannuation plan could push up housing prices. The Australian understands that one of the models being assessed as part of the housing package, would be a ­limited option for homebuyers, requiring them to have genuine savings before allowing them to draw reciprocal contributions from their super.

As well as senior government support for the proposal, it has also been publicly supported by backbenchers including former prime minister Tony Abbott, Craig Kelly, Ian Goodenough and Tony Pasin.

Acting Prime Minister Barnaby Joyce said yesterday Sydney and Melbourne, rather than Australia, were in the grip of a housing affordability crisis. Mr Joyce said he would not rule things in or out of the budget, but suggested ­decentralisation was one means of addressing housing affordability. “I have my views on this but I’m not going to express them now; I will wait for the budget to come out,” Mr Joyce said.

“If you go to Tamworth you can buy a house for about $300,000. You get a job and pay it off. If we develop the other places we create the opportunity that families have the capacity to go to a new area and actually pay off a house. We know that is going to be one of your greatest forms of ­security: to own your own house.

“Super is incredibly important and so is your house. In many ­instances your house is your ­biggest asset that many people have.”

The Treasurer indicated on Monday that it was too simplistic to say that using superannuation to help buy a first home meant it would not be available for retirement.

“We have got more and more people going into retirement who have larger mortgages or don’t own their homes,” Mr Morrison said.

“When you look at people’s retirement incomes you can’t look at it in silos. You have got to look at the big picture.”

Mr Morrison said people were in a much stronger position to manage their retirement if they had paid off their home. “So, people owning their own home, it’s a good thing for the economy and we need to try and do things that put people in the best position to achieve that during the course of their working life,” he said.

Bill Shorten, who again dodged questions on Labor’s negative gearing policy and its impact on the housing market, said the “great Australian dream” of being able to buy a first home was becoming the “great Australian nightmare”.

“I think increasingly the way in which most young people expect to be able to afford a house with the high prices in the big cities is through a payment from their parents,” the Opposition Leader said. “I think if we take some of the demand out of it, which comes from tax concessions going to property investors and speculators, I think it’ll keep prices within a reasonable range.”

Liberal MP Sussan Ley said young people needed super for retirement and that it shouldn’t be used to “take pressure off an urban housing bubble, better solved by decentralisation”.

Economists worry that enabling first-home buyers to divert superannuation savings to housing deposits could inflame the housing market. Deloitte Access Economics partner Chris Richardson said: “That would be adding extra money into a market that’s already pretty heated.”

Mr Richardson, who yesterday addressed the National Press Club, said it would also confuse the purpose of superannuation.

“Superannuation should be about retirement incomes and so when you try to make it about retirement incomes and something else, anything else, then you start to run into problems,” he said.

However, he added that giving people access to super savings for housing would not make much difference to the housing market.

Additional reporting: Rachel Baxendale, David Crowe