Research by the Association of Superannuation Funds of Australia casts doubt on the Coalition’s plan
The whole concept of using super to pay for housing is identical to the approach that created the housing crisis — a neoliberal non-solution that deepens and extends the crises for the benefit of the wealthiest.
Kicking the can down the road by robbing from the future to satiate the greed and failures of both the past and present.
Every time I see these ridiculous solutions being proposed, I get so frustrated. My partner and I are trying to do the right thing, saving and not stealing from our future selves - but we’re competing against these insane policies that do nothing but drive up the price even further.
We just met our original goal, but the cost of a home in our regional area has pretty much doubled since we moved back after giving up on Sydney a few years back now, so we’re no further ahead.
We know the liberal party have been itching to do this for a while now. Scummo mentioned it in the last days before the election.
No doubt it’s happening next time the liberal party gets in.
As if it isn’t enough that they transfer tax dollars to established real estate owners, they will transfer super balances to them as well.
I think using your super as a deposit for a house is a terrible idea because you could basically end up like my mum: an elderly homeowner having to pay to maintain and repair an ageing home and no income other than the pension to live on. She’s long gone now, but I’ll never forget how hard it was for her, and how she had to borrow money from a friend to replace the old heater that broke and couldn’t be fixed. Every pension day it was decision time, what to pay and what to delay. Meanwhile the house was slowly falling into disrepair.
At the risk of being insensitive… Why not sell the house and move in to something smaller and more manageable at that point?
That’s a perfectly reasonable question, and the answers are many. It was the house she and dad bought together, and after he suddenly and unexpectedly died, she was really attached to anything which held her memories of him. They had been active in volunteering in the area and had many friends and a strong connection to it, and she just didn’t want to move anywhere more affordable where she didn’t know anybody and had to “start again”. She had an extensive garden which was her main hobby and which gave her an enormous amount of pleasure, and she was loathe to give it up (it was admired by local people and when she died, people came to take photos of it). Mum had Parkinson’s disease at the end, and found mobility a challenge, so the house was easy to modify for her increasing disability. The truth also was that the house itself was kinda crappy and wasn’t actually worth very much and she wouldn’t have gotten much more than it cost for a unit in the area at the time (prices for units in that area were starting to get a bit crazy). After dad died she got all morbid and was talking as though she was going to die soon too, even though she outlived him by about 20 years lol. I guess she thought, why go to the trouble of moving when I’m just going to die anyway? I hope my answer hasn’t bored you with rambling on, my apologies if it has.
Aside from anything else, I’ve seen a couple of examples of downsizing up close and in neither case did it end up with them making very much money on the deal. They just ended up with smaller places.
In the first case they ended up with a small apartment which they actually ended up having to sell some of their retirement investments to be able to afford after selling a large family home in the outer suburbs and paying all the costs associated with selling.
In the other case she moved from a large family home in the outer suburbs into one of those “retirement communities”. The whole thing’s a massive scam. You “buy” the unit but you don’t actually own it, you only own a leasehold on it - something they didn’t make clear to her at all. You’re not allowed to even improve or renovate it. They impose rules on you much like a rental. And when you move out you’re not allowed to sell it - they contractually reserve the right to sell it themselves and pay you a massively discounted amount for it. Essentially they steal half the value of what you originally paid in a time when house prices are going up as well. It’s straight up exploitation of people who are old and struggling to even do everyday tasks, let alone understand complex contracts.
in neither case did it end up with them making very much money on the deal.
The point isn’t really to make money (you’re not supporting the current housing crisis with your desire to financially gain from a home are you?? 😉 ), it’s more to move in to something more size and maintenance appropriate.
For the Coalition, this hits two birds with one stone: weaken the concept of super, while pumping more money into the property market.
I don’t understand the point being made, here. Yes, when I was young, my super fund was small. I think I had less than $100k in my super when I was 30. Which makes complete sense - Super is designed to grow over 40ish years of employment, not be accessed after 5-10 years.
For the non-Aussies, what’s a superannuation?
@ramble81 @BrikoX In Australia, if you work full time, your employer is required to deposit 11% of your income into a retirement savings account, known as a superannuation (or “super”) account.
Most people use a member-owned industry super fund, but you can also opt for a super account from a for-profit private financial institution (but the fees can tend to be higher).
In most cases, you can access the money in your super account once you turn 65 (but there are some conditions where you can get early access).
The Australian government also offers a (government provided) aged pension, but it’s quite low.
To be clear, the percentage of your income paid in superannuation is in addition to/on top of your regular wage. So you don’t lose access to money you’ve earned through super, it’s like a bonus payment your employer makes to an investment fund that you can access at retirement. The basic idea is that the payments and interest build into something that can replace the age pension in retirement, which reduces financial pressure on the Australian government.
Historically super has been a very hands-off investment with strict rules about who can access it and when. People cannot be trusted to use the money wisely and so it is locked away for our own benefit. In 2020 the conservative government in power at the time allowed people in “financial stress” to withdraw their super early. There have been reports that this completely fucked some people who, unsurprisingly, wasted all their super on nothing of long-term value. In 2022, the conservative government promised in the lead up to the election that people buying their first home would be able to withdraw up to $50,000 of their super to spend on a deposit. Thankfully they lost the election.
