An independent think tank has re-opened the debate on early access to super for the purchase of a first home.
The Committee for Economic Development of Australia (CEDA) said the superannuation system needs to better recognise the extent to which owner-occupied housing contributes to household wealth and retirement liveability.
“People who do not own homes are exposed to the high-cost rental market and risk poverty in retirement,” CEDA said in its report, The Super Challenge of Retirement Income Policy.
“Home ownership continues to decline among young Australians, more of whom are expected to retire without owning a home.”
CEDA said the government should recognise the role of housing in poverty alleviation and in contributing to the objectives of providing for a decent retirement and “allow first home buyers to access superannuation funds to purchase owner-occupied housing”.
This recommendation follows similar suggestions made by treasurer Joe Hockey earlier this year.
CEDA also said the government should address housing affordability and argued there is a need to address “superannuation taxation inequality”.
“The government should redesign the retirement income system. It should mandate that superannuation contributions be made from after-tax [net] income and include the family home in the assets test for the age pension as part of the same reform,” the report said.
These reforms would address equity concerns around taxation incentives, and would align the treatment of superannuation and housing – both vital for a comfortable retirement.
“Given the importance of housing for retirement, another option would be to allow mortgage payments to be made pre-income tax,” the report said.
“This would allow two important components of retirement savings – superannuation and the family home – to be treated the same.”