This is not a Super idea
On Sunday 15 May, yesterday the Government announced an election policy allowing early release of super for housing. This is simply the latest refresh of an idea long discredited by experts and is not in our members' best interests, it risks driving up housing prices, pushing the dream of home ownership further away and damaging our members’ retirement savings.
The Minister for Superannuation acknowledged this morning that their policy would push house prices even higher. Her admission is backed up by Industry Super Australia research, which shows property prices in major capitals would increase by 8-16% under such a plan. When property has rarely been less affordable for Australians, the expert consensus is that supercharging the market even more will only make things worse.
This discredited policy also encourages young people to withdraw significant chunks of their savings at a crucial time in their investment journey. They will miss out on the benefits of compound interest, putting their retirement security at risk.
Cbus Chair, Wayne Swan sounded the alarm on this short-sighted thinking in his speech at the ASFA conference a few weeks ago: “We must protect [super] from the vagaries of the short-term political focus, resist the urge to tinker and misuse it for short-term purposes for which it was never designed."
Read more on the implications of early withdrawal of your super.
By letting super do its day job, funds like Cbus have played a role in doing what experts say is the most important measure in addressing housing affordability - increasing supply.
Through Cbus Property we have built thousands of new homes for Australians. We have invested just under $150M in social and affordable housing through NHFIC programs. Cbus is currently financing 150 social and affordable homes in Melbourne under a turnkey arrangement. And during the midst of the pandemic, when banks were more reticent to support construction projects, Cbus provided much needed debt to keep residential construction programs going.
We did all of this while providing strong returns for members' retirement accounts.
As Wayne stressed in his speech, super shouldn’t be a matter of political debate and ideology. It is a unique economic and social benefit for Australia and should enjoy strong bipartisan support. It should be above short-term election campaigning.
All the super peak bodies have been vocal about this re-emergence of this discredited policy:
Industry Super Australia: www.industrysuper.com/media/super-for-housing-inflationary-and-contrary-to-retirement-income-objective
ASFA: www.superannuation.asn.au/media/media-releases/2022/media-release-15-may-2022
The super sector will continue to strongly advocate against policies that cut against our members' best interests. If you have any questions about the proposal, please do not hesitate to be in touch.