Keating trashes using super for first home buy
FORMER Prime Minister Paul Keating has trashed a proposal to allow first home buyers to dip into their superannuation for a home deposit.
Meanwhile, One Nation leader Pauline Hanson has welcomed reports the government is considering the proposal ahead of the May budget, claiming the Coalition has adopted another of her policies.
Coalition MPs, including government ministers, have not ruled out changes to superannuation rules in its May budget housing package in the past few weeks.
Mr Keating has issued a warning to the government that allowing young Australians to access their superannuation to be able to afford a house would “rob them” of savings later in life.
In an opinion piece for Fairfax Media, the former Prime Minister writes the proposal is an “irresponsible” idea that would also push up current housing prices.
“The two key elements underpinning superannuation are preservation of contributions to age 55 and the compound earnings on those contributions,” Mr Keating said.
“If the preservation rule is breached and savings,
❝of Diversion savings into housing would simply push up the price of properties.
especially those of young people, are allowed to drain away, the loss of the accumulation and its compounding would rob them of a large block of savings at the end of their working lives.
“And to make matters worse, the proposed diversion of these savings into housing would simply push up the price of the current stock of properties.
“It would add to demand while doing nothing to supply.
“So were the government to proceed with this irresponsible idea, it would potentially destroy superannuation for those, in the main, under 40 years of age, while at the same time, driving up the cost of the housing they are seeking to purchase.
“As an economic idea, this is scandalous,” the former Treasurer said.
Senator Hanson and fellow crossbencher Senator Derryn Hinch went head to head over the proposal on Channel Seven’s Sunrise program yesterday morning.
Senator Hinch called the idea “madness”, saying superannuation was designed to support people in their retirement not for “youngsters”.
“It is not your God-given right to own a home,” he said.
A fired up Hanson responded: “That might be your opinion but a lot of my policies over the years have been picked up by the Liberals, the Coalition I should say, and the Labor Party.”
“I am polling 10% in the polls. I do not think that you’re even a blip on the radar, Derryn,” she said.
“These are policies to get out there.”