Labor’s Housing Crisis Continues

Labor’s housing crisis shows no sign of abatement.

Their unimaginative approach bears two main policies: the boondoggle Housing Australia Future Fund and tax subsidies for Big Super.

They are focused on their vested interests rather than being creative to solve this great national challenge.

Today the Senate Economics Committee looked at how superannuation could help drive home ownership.

Everyone knows super isn’t a silver bullet to Labor’s housing crisis but it could solve the deposit and debt problem for many Australians.

With Sydney houses at 14 times average earnings compared to twice average annual earnings in 1985, we need to be open to new and different ideas.

Labor and Big Super are obsessed with closing down new avenues to home ownership. This suits the financial interests of the unions/Labor Party but it is the wrong approach for the country.

Today’s hearings dismissed Big Super’s scare campaign and generated the following key points:

1. A 35 year old investing in a unit rather than super would be almost $1 million better off in retirement (Michael Rice AO);
2. Payment of super guarantee contributions for first home ownership should be a policy option easily available to prospective buyers as people should be free to choose whether they want to save for a deposit in a free country;
3. The existing caps on $50,000 for withdrawals from the current restrictive super for housing schemes should be lifted or abolished;
4. Any inflationary effect appears negligible. Under a similar scheme in Canada, house prices moved the equivalent amount in the 10 years after implementation as it did in the 10 years prior (Menzies Research Centre);
5. There are many models to deploy super with and without legal changes. Super could be used for a deposit in cash or as collateral for a deposit and or an offset; and
6. There may be a sweet spot. 25-34 year old couples could more easily purchase a $500,000 house where there are around 560,000 renters in this category (Blueprint Institute).

The Committee will now consider the best way forward with the benefit of today’s evidence.

[Ends]