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The Prime Minister has defended his proposed first home buyer measure, insisting the planned reforms for superannuation would raise both demand and supply for property.
On Monday (16 May), Prime Minister Scott Morrison unveiled the Coalition’s new proposed housing scheme, which would allow first home buyers to use up to 40 per cent, up to an ultimate cap of $50,000 from their super savings, for a deposit.
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The Super Home Buyer Scheme would apply to both new and existing homes, and users would need to return their withdrawal to their super fund when their home is sold, including a share of any capital gain.
It would also require buyers to separately save a 5 per cent deposit.
If the Liberal Party was re-elected into government come Saturday (21 May), the scheme is expected to kick off from July next year.
However, the scheme has come under scrutiny, with researchers warning it would escalate house prices and only allow younger buyers to cover around 1 per cent of a housing deposit.
Minister for superannuation Jane Hume also conceded that the scheme would push up house prices.
Opposition Leader Anthony Albanese also called the program “fiscally irresponsible” during a doorstop interview on Tuesday (17 May), declaring it would “lead to increased numbers of people potentially being reliant upon the pension, rather than their own superannuation savings”.
But Mr Morrison has denied the program would have a negative impact, as it delivers a “balance of policies”.
Coupled with the first home buyer measure, is an expansion of the downsizers superannuation incentive, which is aiming to unlock larger housing stock onto the market.
“It deals with supply and demand,” Mr Morrison told journalists during a press conference on Monday (16 May).
“And these same criticisms have been levelled at every single housing policy I have been bringing forward, and on every occasion they have proved to wrong on those criticisms.”
The downsizers measure, which allows people to contribute up to $300,000 into their super from the proceeds of selling their home, outside of the voluntary contributions caps, is only available to Aussies aged 65 and over.
From July the age limit is set to decrease to 60.
But the government has planned to knock off a further five years of the age limit, bringing it down to 55.
“It ensures that we are reinforcing people’s retirement savings, but we’re also freeing up more housing supply, which does put downward pressure on the rising costs of housing across the country,” Mr Morrison said.
“This plan is about using people’s own savings, their own superannuation, so they don’t have to stand on the kerb and watch house prices run away from them and they’re unable to get in and own their own home.”
He also noted that if retirees own their home, they’re likely to rely on government support.
A number of players within the Liberal Party have previously expressed doubts on whether super should be used for housing, including John Howard and Peter Dutton.
However Mr Morrison claimed that they have since come around and were “enthusiastically in support of the plan”.
The Prime Minister also claimed the downsizing plan will make a significant difference for women.
“We know women’s superannuation is a real challenge. The plan we’ve put in place for downsizing is helping women have better retirement balances when they downsize their home,” he said.
“There have been other challenges that have prevented that along the way during their working life. And this policy has been helping women and ensuring we reduce that age now to 55. It can only help more.”
Meanwhile the Labor Party is heading to Saturday’s election with a pledge to roll out a shared equity scheme if it wins, which would see the government assist buyers with their property purchases by buying up to a 40 per cent stake in their home.
[Related: Coalition’s super for housing scheme comes under fire]
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