Australia’s Coalition explores using super for housing — ABC News Australia
In Australia, the opposition Coalition is considering options for using funds from the superannuation savings system to help people buy their first home. The party has not yet announced a final decision or formal policy, ABC News Australia reports.
Shadow housing minister Andrew Bragg said the Coalition had discussed several models. They include using retirement savings as collateral for a loan or withdrawing a lump sum for a home deposit. According to him, the aim is to prevent a situation in which renting in retirement effectively becomes mandatory.
Options for using savings
Bragg stressed that he was not advocating a specific solution before his address to the Financial Services Council. He said the funds could remain in the savings system and be used as collateral or through an offset mechanism on a loan. Another option involves withdrawing them to repay a mortgage or establish an initial home loan.
At the past two elections, the Coalition proposed allowing citizens to withdraw up to 50,000 Australian dollars from retirement savings for a home deposit. Bragg did not specify whether the opposition would retain this idea. At the same time, he acknowledged criticism that such a model would help people in their mid-to-late 30s, who have already accumulated the relevant amount, more than younger buyers.
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Political debate
The issue of superannuation became the subject of political debate after the One Nation party proposed allowing people, for three years, to keep 3% of their salary that would otherwise go into retirement savings, to pay rent or a mortgage. According to calculations cited in the report, for a person earning 90,500 Australian dollars, this would amount to 2,300 dollars a year, or 44 dollars a week.
Critics of the proposal said it could fuel inflation in the short term and reduce the long-term growth of savings due to compound interest. Treasurer Jim Chalmers criticized the Coalition and One Nation, saying that retirement savings are intended for life after retirement.
Shadow treasurer Tim Wilson called Bragg’s ideas a useful part of the discussion amid a growing number of people reaching retirement age without owning a home. According to him, the lack of home ownership is a key indicator of poverty in retirement, while rising housing costs are linked to later property purchases and starting families.
