AustralianSuper chair Don Russell,who served as the right-hand man to former prime minister and architect of compulsory superannuation Paul Keating,said the policy would fail “on all scores” to improve people’s financial position.
“It will have a debilitating effect on the retirement balances of people when they get to their 50s and 60s,” he said. “You’re not doing anyone any favours in terms of improving their overall wealth,while facilitating the natural temptation to have money now as opposed to later.”
Russell said the Australian housing market was “among the most distorted in the world” through tax concessions,and pumping more money into the system would only push prices up further,mirroring the New Zealand market of “shocking” house-price rises.
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“It’s unfortunate that people are dealing with the symptoms of a major structural problem by making the structural problem worse.”
Russell said Australians already used superannuation to access housing,with higher balances making it easier to secure a loan or pay off a mortgage later in life. “It’s a mistake to think that the superannuation balances,if they stay in the super system,aren’t helping people buy houses.”
The proposed scheme would result in lower returns for all Australians,Russell said,because it would dismantle compound interest and push super funds towards low-return and liquid assets such as cash and shares instead of unlisted higher-return assets,such as infrastructure and property.