I Should Be Able To Use My Super To Buy A Home
Brick veneer or weatherboard, veranda or patio, I care not -- as long as it is mine.
As the founder of the Liberal Party, Sir Robert Menzies said, "one of the best instincts in us is that which induces us to have one little piece of earth with a house and a garden which is ours; to which we can withdraw, in which we can be among our friends, into which no stranger may come against our will."
This is the great Australian dream.
I’m not asking for a first home buyer’s grant, a concession or any type of handout. All I’m asking for is access to my own money to put a deposit on a house. And certainly, if I sell the house, I’ll return the deposit.
This is not irresponsible spending, but a long-term investment with far greater benefits than any investment a fund manager could make on my behalf. Instead of sinking money in rent, I would be putting it towards an asset for my long-term security and for the peace of mind home ownership brings -- owning where you live and not being at the whim of a landlord who could turf you out for any of a long list of reasons including no reason at all.
But currently my money is locked up in a superannuation fund being invested in things I have no real control over. Of course superannuation is important to ensure that, as our population ages, the welfare system is not overburdened by the amount of pension to be paid. That is a given. But surely people are not so irresponsible, so reckless in their spending that they cannot be trusted to have any say over how their money is invested?
There is a vast difference between a house and a credit card debt racked up on TVs and high heels.
Certainly taking on a mortgage would increase household debt, but there is good debt and there is bad. Just like governments investing in nation-building infrastructure is good debt, families taking out mortgages to buy a home is security in every sense of the word -- a stable home and an asset.
In a volatile global economy with Brexit and the US-China trade wars raging on, where $66 billion can be wiped off our Australian share market in a day, the local housing market by comparison continues to be strong and, at present, is a safer investment for our superannuation.
In the days before super, many would save their money to purchase a home and other assets instead of saving for retirement. In retirement, they rely on a pension being asset-rich but cash-poor. But today things have swung the other way. While younger working people will have superannuation savings for retirement, they may never be able to afford a home.
Using the same mechanism of superannuation, the younger generation could realistically be set on the path to home ownership. All it takes is a policy adjustment.
Sure the price of houses might temporarily be driven up by a potential influx of first home buyers, but as those, like me, who have been waiting so long to purchase their first home finally get into the market, that rush would taper off and steady as would housing prices.
It is notable that if you are in severe financial hardship or have compassionate grounds, you can access your superannuation savings to make payments towards an overdue mortgage and even council rates to prevent you from losing a home you already have. So while presently value is seen in using superannuation to make payments to keep a home, why is this not the case for purchasing one? Clearly there is a policy inconsistency here.
So what cogent reasons could explain why it is compassionate to let you spend your super to keep your home but not to acquire one? Well this would mean that super funds have less money in them and therefore less profits.
Super funds are big business. As such they have the muscle to flex in opposing any policies that might reduce their income. To challenge them is never easy.
But is the Australian dream not worth it?