NOTE: Video sponsored by the ACTU
Key points
- It would make house prices increase by more than the maximum amount people could withdraw
- It would cost the government $1 trillion in the long run
- It would leave people with $200k less in retirement savings
- It would significantly affect the returns on all superannuation as funds would need to keep more cash reserves uninvested so it is available for withdrawal
Correct me if I’m wrong, but wouldn’t the economy going to even more shit than it is be worse for property ownership?
Sorry, I was being a bit tongue in cheek there. The economy will continue to be shit for people who struggle to afford home ownership whether or not they can use superannuation to help get their foot in the door.
I think the point is if you are trying to fix housing early withdrawal of super is not the answer for all the reasons given.
There are other solutions and it would take multiple policies working in tandom.
Sure, but by the time those solutions are in place, another generation of people will have been denied the chance to own property, which has generational consequences on economic and educational outcomes for those families.
The answer is short term relief combined with long term change. Denial of short term relief because of hypothetical long term strategies that aren’t going to be implemented helps no one.
Super is not the short term relief you are looking for though… More people floating around with more money would just push up the prices even more, offsetting any benefit from withdrawing super.
Now if we started talking about increasing supply perhaps, that would be a different story.