Newspaper icon
The latest issue of Financial Standard now available as an e-newspaper
READ NOW
Big super locking Aussies out of homes: Wilson

Industry Super Australia says recent comments by Liberal MP Tim Wilson that "big super" is locking young Aussies out of the housing market are "scary".

Wilson said the fact that first home buyers are unable to access their retirement savings to go towards a home deposit is an unfair system.

"Australians shouldn't be serfs to their own super - if Big Super funds can use your money to buy homes they own, fund members should be able to use their money to buy a home," Wilson said.

"Banning ordinary Australians the ability to use all their savings to buy a home while allowing Big Super to do so means that the law empowers capital, but not citizens - that is morally wrong."

Wilson said the fact that industry super funds are using members money to invest in build-to-rent schemes while those same members are unable to use their retirement funds to purchase their own home is problematic.

"There is no logic to put the benefits of super, which are realised for around 20 years in retirement, ahead of the benefits of home ownership, which are experienced for around 50 years - during both your working life and retirement," Wilson said.

"You can save for retirement after you own a home, you can't save for a home in retirement. That's why it should be home first, super second."

Industry Super Australia chief executive Bernie Dean told Financial Standard the comments are ill-informed.

"The scary thing about Mr Wilson's hare-brained scheme to stop super funds investing in affordable housing is that it could become a reality if the parliament passes the Your Future, Your Super legislation. Fringe backbenchers will soon have the power to pressure the minister to ban any type of super fund investment they don't like," Dean said.

"Mr Wilson and his small cabal of equally extreme colleagues would stop the construction of low-cost housing depriving many people a shot at owning a home, and destroy the jobs and strong returns to members that these sorts of investments create."

Dean said experts have already disproven Wilson's comments and young Australians would suffer if his suggestions were to come into effect.

"Economists and housing experts agree that allowing people to tap into their super will simply inflate prices and push home ownership further away. It will also add billions to the cost of the aged pension - which we will all pay for through higher taxes," he said.

"Mr Wilson has said these housing price hikes are secondary. It might be secondary for politicians who have multiple investment properties and are pocketing 15% super, but it sure isn't for those young Australians, who under his scheme, will be staring down the barrel of hugely inflated mortgages without any super savings to fall back on."

Wilson has been grilling the nation's superannuation funds as part of the economics committee's ongoing review into the big banks and other financial institutions in his role of chair.

Wilson believes the scrutiny is an important part of ensuring Australia's financial system is working well and has said it is crucial that the superannuation sector is operating effectively, fairly and to the benefit of fund members.

Read more: Industry Super AustraliaTim WilsonHouse Economics CommitteeBernie DeanFinancial Standard
Link to something GEy0qS7A