Liberal MP Tim Wilson has previously urged for early super access to allow young people to enter the housing market, but Senator Hume, Minister for Financial Services, Superannuation and the Digital Economy shut down the idea when asked about it during a media interview.
“At this stage, there is no plan to allow Australians to access a deposit for their home through superannuation,” Ms Hume commented during a Sky News interview.
“Superannuation is to save for your retirement, we want to make sure Australians have the best retirement outcomes possible.”
“That’s a no then, that’s a no then, Minister,” presenter Peter Stefanovic retorted.
“Your words, that’s right,” she answered.
Industry Super Australia has warned that allowing superannuation savings to be funnelled towards the housing market would supercharge house prices and leave young people with smaller balances to retire on.
Bernie Dean, chief executive of Industry Super Australia, called on Treasurer Josh Frydenberg and Prime Minister Scott Morrison to “back up the Minister” in pouring cold water on Mr Wilson’s proposal.
“This proposal would jack up house prices, inflate young people’s mortgages and add billions to the aged pension, which taxpayers have to pay for,” Mr Dean said.
“But the MP pushing this proposal says the house hike is secondary, it might be secondary for politicians who have multiple investment properties and are pocketing 15 per cent super, but it sure isn’t for these young Australians, who under his scheme, will be staring down the barrel of hugely inflated mortgages without any super savings to fall back on.
“We need sensible solutions, like boosting the supply of affordable housing, which will bring prices down and get young people into a home in a way that doesn’t lumber workers with higher taxes in the future.”
Mr Wilson recently declared super funds should not be able to invest in property if members cannot withdraw savings for house deposits.
“If big super can make you a serf to your own super by buying houses you can rent off them, then you should be able to use your super to buy your own house. The law should empower citizens, not capital. That’s why it should be home first, super second,” Tim Wilson said.
New powers under the Your Future, Your Super laws – which was introduced into Parliament on Wednesday (17 February) – allow the government to prohibit any investment or payment made by a super fund, regardless of whether it’s in members’ best interests.
The Your Future, Your Super package is scheduled to commence on 1 July 2021.
Under the package, the superannuation system will be updated so that:
- Superannuation follows members: preventing the creation of unintended multiple superannuation accounts when employees change jobs.
- Makes it easier to choose a better fund: members will have access to a new interactive online YourSuper comparison tool, which will encourage funds to compete harder for members’ savings.
- Holds funds to account for underperformance: to protect members from poor outcomes and encourage funds to lower costs, the government will require superannuation products to meet an annual objective performance test. Those that fail will be required to inform members. Persistently underperforming products will be prevented from taking on new members.
- Increases transparency and accountability: the government will increase trustee accountability by strengthening their obligations to ensure trustees only act in the best financial interests of members. The government will also require superannuation funds to provide better information regarding how they manage and spend members’ money in advance of annual members’ meetings and disclose all of their portfolio holdings to members.
Speaking last week, Treasurer Josh Frydenberg commented: “These measures will reduce waste in the system and save Australian workers $17.9 billion over 10 years by holding underperforming funds to account and strengthening protections around the retirement savings of millions of Australians.
“Australians currently pay $30 billion per year in superannuation fees, while 3 million accounts sit in underperforming funds worth over $100 billion in retirement savings...
“This package builds on the government’s superannuation reforms, which include consolidating $2.9 billion held in unintended multiple accounts on behalf of 1.4 million Australians, capping fees on low balance accounts, banning exit fees and ensuring younger Australians do not pay unnecessary insurance premiums.
“Under the Your Future, Your Super package, the Morrison government is taking the next step in modernising and improving the superannuation system to ensure it is working harder for you.”