Self serving super industry not helping first home buyers
Superannuation industry warnings of the adverse impact of allowing members to access their super to help achieve home ownership show how little the industry cares about their members.
For them, the priority is to control other people's money and future while maximising the funds under management and maintaining their comfortable situation.
Such selfserving lobbying is demonstrated most clearly by their proposals to increase the compulsory super preservation age from 60 to much older ages. There are even suggestions that members should be required to take their benefit as an income stream on retirement, further enhancing the industry's control of people's money.
The gross discrimination against nonhomeowners in the social security system is mirrored in the superannuation and tax system.
Fundamental change is long overdue. Why, for instance, should super be tied up untouchable until 60 or 65 as recently suggested by the industry when a person is unemployed or undertaking retraining?
The inevitable consequence in many such situations is the forced sale of the family home. The federal government has an easy option to deal with this, namely to allow the superannuation balance to be deposited in a mortgage offset account to reduce the servicing cost of the mortgage.
This would still leave the money in super and help the member much more than current hardship rules which allow only $10,000 to be withdrawn from the fund.
Similarly, there are compelling reasons to allow all superannuation fund members to invest a limited amount, for example $200,000 (single) and $300,000 (combined) in a mortgage offset account to assist them to achieve home ownership.
Compared with focusing on first home buyers as the property industry does, this option would alleviate the problems that our tax and compulsory super arrangements create for home buyers in today's expensive market.
Unlike the US system which grants a tax deduction for interest on home owner debt up to $1 million and provides no assistance to investors, our tax system provides no assistance to owner occupiers and provide unlimited tax deductions to investors.
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