The Financial Services Council (FSC) has distanced itself from suggestions that people should be able use their superannuation balances for a first home deposit.
In a column to be published in the upcoming print edition of Super Review’s sister publication Money Management, the FSC’s senior policy manager for superannuation, Jane Macnamara, said that when the proposals being put forward were closely examined they simply did not “stack up” and ran the risk of artificially inflating house prices.
The FSC’s position will come as a blow to one of the promoters of the superannuation for housing proposal, former FSC policy adviser and now NSW Liberal Senator, Andrew Bragg, who has pushed hard for the proposition.
Macnamara’s column, expressing the formal view of the FSC, said that while, at first blush, the superannuation for housing proposal looked attractive there was a “mountain of research demonstrating that giving first home buyers more money simply increases house prices”.
“We’ve seen this in action with first home buyers’ grants. So, topping up your deposit out of super savings is going to put you… more or less back where you started, only with a bigger loan that takes longer to pay off. And a lower super balance,” she wrote.
“Accessing your super is also not necessarily going to make it easier to get a home loan. Using money you’ve been forced to save doesn’t make you a better risk for a bank to take on, and it doesn’t show that you can make repayments, so your income and savings behaviour will still be a key factor in whether you can afford to buy,” Macnamara’s column said.
“At the end of the day, this is just another attempt to use the superannuation system to solve an unrelated problem. Australia has some of the least affordable property markets in the world, and it is not the role of the superannuation system to fix that,” she wrote.
“Changing the long-term promise of superannuation by allowing savings to be withdrawn almost as they are accumulated would undermine the purpose and the promise of the system. Not only would it set up the super system to fail, but it would also undermine retirement savings for Australian workers.”