May 9th 2024.
A recent proposal has sparked debate among experts and policymakers in Australia, with concerns about its potential impact on taxpayers and the housing market. According to Deloitte's modelling, the proposal to allow first home buyers to access their superannuation for a house deposit could cost taxpayers a staggering $1 trillion. This has raised concerns about the long-term sustainability of the country's budget and the potential consequences for future generations.
The Super Members Council, which commissioned the modelling, warned that such a policy could create a "budget blackhole" as more and more home buyers rely on the taxpayer-funded age pension after retirement. Even with a cap of $50,000 on super withdrawals, the budget could still face a hefty $300 billion hit by the end of the century, according to Deloitte's findings.
Misha Schubert, the chief executive of the Super Members Council, expressed concerns about the potential impact on housing affordability and retirement savings. She stated that the proposed policy could worsen the current housing crisis while also eroding the retirement savings of individuals at the expense of taxpayers. Schubert called the proposal "economically reckless" and warned that it could trap young Australians in a cycle of rising house prices and increased pension costs.
Deloitte's modelling also revealed that a couple, both aged 30, who accessed $35,000 each from their super could retire with $195,000 less in today's dollars. This further highlights the potential consequences of the proposal on individuals' retirement savings. Additionally, the current capped proposal could lead to a significant increase in Australia's median house price, with a projected jump of 9% or $75,000 in major capital cities. An uncapped scheme could result in an even larger property price increase and leave future taxpayers with billions in additional pension costs to cover.
Schubert emphasized the need for a "sensible rethink" on any policy ideas that could undermine the strength and success of superannuation in providing for all Australians in retirement. She also urged policymakers to consider the potential impact on future generations and to avoid exacerbating the current housing affordability crisis.
In light of these concerns, it is important for all stakeholders to have an open and informed discussion about the proposed policy and its potential consequences. As such, the Super Members Council encourages everyone to stay updated on the latest developments and news through their WhatsApp channel, where they can access breaking news, celebrity updates, and sports news without any comments or algorithms. Privacy is also guaranteed, as nobody can see your private details.
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