SMC says 'reckless' plan could cost taxpayers $1tnBY ELIZA BAVIN | THURSDAY, 9 MAY 2024 12:44PMSuper Members Council (SMC) has slammed the Coalition's plan for young Australians to use their super for a house deposit, saying new modelling shows it could cost taxpayers a cumulative $1 trillion. SMC said even a policy which capped super withdrawals at $50,000 could still create a $300 billion cost to federal coffers across coming decades. The modelling - commissioned by the SMC - found pension costs could climb exponentially as those first home buyers start to retire with far less super and are forced to rely more heavily on the taxpayer-funded age pension. To meet the rising costs, future governments may have to increase taxes or cut services to offset the extra fiscal pressure created by the bigger age pension outlays, SMC said. At its peak, the capped super for a house policy could cost taxpayers an extra $8 billion per year, while the latest push to uncap it could cost taxpayers an extra $25 billion a year, the modelling found. Previous SMC modelling found the policy would simply raise capital city house prices by $75,000 - forcing future generations of young Australians to wait even longer to buy. SMC chief executive Misha Schubert said a growing body of expert evidence showed the policy would not lift home ownership rates but would only make housing affordability worse while eroding retirement savings and leaving all Australians a tax bill. "It's economically reckless. It sets a policy trap for young Australians because it hikes house prices and blows a Budget blackhole in the decades ahead mostly by pushing up age pension costs - which every taxpayer would pay," she said. "Ideas to break the seal on super just leave people with less savings in retirement and a bigger bill for all taxpayers." Schubert said while everyone would like to see more Australians own their own home, raiding super for a deposit would not achieve that. "It's unfair to lump the next generations of Australians with a policy that would only make the housing affordability crisis worse by driving up house prices," she said. "We urge a sensible rethink on any policy ideas that undermine the strength and success of super to continue to deliver for all Australians in retirement." The modelling - completed by Deloitte - was based on a rigorous microsimulation model accounting for population change, super contributions and balances, tax, and pension expenditures. Related News |
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