Australian politicians have called for a greater easing of superannuation rules to allow first-home buyers to access more of their super.
As it stands, the First Home Super Saver scheme allows first-home buyers to access up to $30,000 of their super in voluntary contributions. But Liberal Senator Andrew Bragg believes the mandatory contributions should also be accessible, as he detailed in his book Bad Egg: How to Fix Super.
“The system costs more than it saves. There should be more flexibility. Australians should be allowed to access super for a first home, a home is more important than super,” Bragg said earlier this month.
He said Australians will be better off in retirement if they own property, regardless of their super balance.
Australian Bureau of Statistics data released earlier this year found that in 2017-18, households where at least one person was older than 65 that owned their house had a median net worth of $960,000. That dropped to $934,900 for similar households who were still paying off their homes.
Conversely, the median net worth of a renting household is $40,800.
Fellow MPs Andrew Hastie and Dave Sharma have voiced their support on social media.
“For most Australians, their family home will be their most important form of wealth and the basis of their retirement strategy. Helping more Australians own their own home can only be a good thing,” Sharma said on Instagram.
Now, the Australian Council of Trade Unions (ACTU) has hit back, describing the calls as “pandemic profiteering” on Wednesday.
“This is a form of pandemic political profiteering from people who’ve always opposed the retirement savings system that was put in place by workers, business and government working together,” ACTU assistant secretary Scott Connolly said.
“The government cannot ask workers to accept a trade-off arrangement where people are being asked to choose between poverty now or poverty later. Australian workers deserve better now and in retirement.”
Connolly also noted MPs’ push for the slated superannuation increase to be paused.
MPs Katie Allen, Russell Broadbent, Eric Abetz and Sharma are among the group of politicians arguing the scheduled increase from 9.5 per cent should not go ahead this year, according to reports in The Sydney Morning Herald.
The mandatory super contribution of 9.5 per cent of a worker’s salary is set to increase to 10 per cent on 1 July 2021.
Opponents of the increase argue it will suppress wages.
But Connolly said further “raids” on super will be damaging, after the government allowed Australians in hardship to access their super early.
“These backbenchers need to be put in their place by the Morrison Government and workers need to be given reassurance that their retirement savings will go up as currently legislated and people will not be forced to raid their retirements to pay for housing,” Connolly said.
Industry Super Australia chief executive Bernie Dean made similar calls, warning a generation of Australian workers will be “dumped on the pension” if the scheduled increase doesn't go ahead.
Super withdrawals in the spotlight
The ATO recently warned it is scrutinising the details of people who have withdrawn their super early but who aren’t in genuine hardship.
The warning came after reports of Australians using their super to purchase cars and luxury items.
It warned those who don’t have a solid reason to withdraw their super will be required to pay tax on the amount and even cop a $12,600 fine if they included misleading information in their applications.