Housing finance figures for January 2015 by the Australian Bureau of Statistics show that first home buyers are at their lowest level for a decade. With moderating housing lending and GDP growth below trend, there has been recent debate between current and former political leaders on the merits allowing first home buyers to access their super early in order to fund a property purchase.
The idea has support from the Real Estate Institute of Australia, Prime Minister Tony Abbott and Treasurer Joe Hockey but has been criticised by Finance Minister Mathias Cormann, Communications Minister Malcolm Turnbull, former Treasurer Peter Costello and former Prime Minister Paul Keating, who introduced Australia’s super scheme.
The debate is timely, says REIA President, Neville Sanders. “The proportion of first home buyers as part of the total owner-occupied housing finance commitments decreased marginally to 14.2 per cent and is the lowest since May 2004," he said.
Abbott has said the proposal is a “perfectly good and respectable idea.” Earlier this week Hockey said that Australia needs to make the super system more flexible and suggested that super should be available throughout a person's life due to increasing longevity. However the Treasurer's comments have come under fire from superannuation organisations and Keating, who said the purpose of super was to save for retirement and the government should not change the rules to allow some of our retirement savings to be spent decades ahead of this. Weighing in on the issue, Cormann said the move would push up house prices for first home buyers.
Turnbull’s view is that it would be a thoroughly bad idea. "It's not what the superannuation system is designed to achieve. Housing affordability is a big issue in Australia but as we've demonstrated over many studies over many years, this is a supply side problem." Shadow treasurer Chris Bowen also opposes the idea, while financial system inquiry panel member Craig Dunn says super should be used solely to finance retirement.
The Howard government previously examined the idea but decided against it.
