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The broking industry has responded to measures outlined in the Coalition’s budget reply, including plans to let first home buyers access their super early.
Opposition Leader Peter Dutton delivered the budget reply speech on Thursday evening (27 March), outlining the Coalition’s economic policies and priorities ahead of the upcoming federal election.
Dutton’s budget reply reaffirmed the Coalition’s previously announced policy to let first home buyers access $50,000 of their own super to put towards a home deposit.
He also said a Coalition government would move to cut permanent migration by 25 per cent and set “stricter caps” on foreign student numbers to relieve rental stress.
While some in the property and broking industries have welcomed certain housing measures, others have said that the party will not do enough to address Australia’s housing crisis.
Anja Pannek, CEO of the Mortgage & Finance Association of Australia (MFAA), noted a strong focus on cost of living in her response to the budget reply, saying the industry body would continue to work with both sides of politics to advocate for the broking industry,
She also flagged the Coalition’s commitment to allow first home buyers to access up to $50,000 of their superannuation for a home deposit.
“It also announced that it will scrap Labor’s Housing Australia Future Fund, which is set to provide funding for the Help to Buy scheme,” Pannek said.
Pannek welcomed Dutton’s commitment to increase the asset write-off to $30,000 and to make this permanent, something not done by the Labor government.
“The permanency of the instant asset write-off is something we called for in our pre-budget submission to give certainty to our members in the commercial and asset finance space and to their clients as well,” she said.
“We expect both parties will continue to make policy announcements leading up to the federal election.”
Commenting on the Coalition’s plans to cut migration by 25 per cent, founder and managing director of mortgage brokerage Kaleido Loans, Jason He, described the plans as a “double-edged sword”.
“You have to remember that migration is a key driver to economic growth and labour supply, especially for the construction industry,” He said.
“I think it’ll have short term impact but will not affect the current long-term issue of labour supply for the construction industry with lack of labour driving up construction costs for builders and developers.”
First home super access divides
Loan Market CEO David McQueen said the Coalition’s plan to allow first home buyers access to their superannuation funds for a deposit would generate interest from those wanting to make the move from renting.
However, first home buyers should consult a financial adviser and accountant, in addition to their broker, to understand the long-term impacts of withdrawing funds, he said.
“Superannuation is firstly designed for retirement,” said McQueen.
“Building up a deposit is typically the hardest challenge first home buyers face when getting into the market. Having access to these funds would help them compete in an undersupplied marketplace.
“At the same time, for many people aged under 40, $50,000 represents a significant amount of their superannuation balance. Some may choose to withdraw less.
“Australia’s real estate markets typically trend upward in value, but superannuation funds have been performing strongly as well.
“This is where a mortgage broker becomes critical. Brokers understand borrowing power and how to bridge the deposit gap. Their role isn’t just about securing a loan, it’s about helping buyers build a strategy to enter the market that, for many, would mean not needing to touch their super at all.”
In contrast to McQueen, the Australian Council of Social Service (ACOSS) was broadly critical of the budget reply, saying it failed to set out a plan to tackle the housing crisis.
ACOSS opposed the Coalition’s proposal to allow first home buyers to use their superannuation for a home deposit and its plan to cut the Housing Australia Future Fund.
“Using retirement savings to pay for housing will only inflate prices and increase financial vulnerability,” ACOSS CEO Cassandra Goldie said.
“All this policy will do is push up house prices and shrink retirement incomes. It will not fix the root causes of the housing crisis, which are wreaking havoc on our community.
“If we’re going to address the housing crisis we need to drastically scale up the supply of affordable homes. The Housing Australia Future Fund is a critical vehicle to achieving that goal. We need to be investing billions more each year, not abolishing it.”
Kaleido Loans’ He also raised concerns about the long-term effects of allowing first home buyers to release up to $50,000 from their superannuation funds.
“On the surface it appears logical but many home buyers may not understand the long-term impact or effect of this on their super and future retirement,” He said.
“I think it’s important to put parameters in place that buyers obtain some sort of financial advice to fully understand the implications. However, that’s an issue in itself with the cost of financial advice being out of reach for most Australians who need it.”
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