Should Australians be able to access their super to buy their own home? SMC says 'no'

The Super Members Council (SMC) has vocally criticised a policy proposal that would allow young Australians to use their superannuation to fund a house deposit, labelling it "economically reckless." This condemnation comes amid concerns that such a policy would not only inflate house prices but also deplete vital retirement funds, leaving future generations at a financial disadvantage.

According to SMC, this proposal could potentially trigger a 9% increase in median house prices across Australia's major capital cities, translating to an additional $75,000 on average per home. Such a significant surge in prices would make homeownership even less accessible for first-time buyers, contrary to the policy's intent.

Misha Shubert, chief executive of the SMC, stressed the importance of rethinking this approach. Shubert pointed out that while the desire for more Australians to own their home is strong, using superannuation to achieve this would paradoxically make it harder by making properties more expensive. Moreover, this strategy could lead to larger mortgages, diminished retirement funds, and increased tax burdens to support a potentially expanded age pension system in the future.

The policy has been brought back into debate by Liberal senator Andrew Bragg, despite being previously rejected. Bragg argues that accessing super for home deposits could provide better outcomes than lifelong renting. However, the SMC and other experts warn that this could exacerbate intergenerational inequality and leave many young Australians financially vulnerable. The debate continues as the nation approaches another Federal election, with the superannuation system caught in the crossfire of political agendas.