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Coalition's home buyer super plan receives mixed reaction

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Prime Minister Scott Morisson’s last-ditch attempt to win over voters has received a mixed reaction.

Mr Morrison used the Liberal Party's official election campaign launch yesterday to announce it's Super Home Buyer Scheme which would allow first home buyers to access 40 per cent of their superannuation up to a maximum of $50,000 to buy a house.

It would apply to new and existing homes with the invested amount to be returned to the owner's superannuation fund when the house is sold.

This would include a share of any capital gain.

The Australian Institute of Superannuation Trustees said the Coalition's plan would drive up house prices and undermine the core purpose of the super system.

“Accessing your super early won't get you closer to your dream home or fix Australia's housing crisis. Using super as a deposit will drive up property prices, leaving Australians with higher debt and depleted retirement savings,” CEO of AIST Eva Scheerlinck said.

“First home buyers are being asked to choose between a home and saving for their retirement, they should be able to have both.

“The Australian Government must address this modern-day inequity by addressing supply issues rather than raiding super. A first home should not come at the expense of dignity in retirement.”

But Master Builders Australia says the Coalition’s policy will mean keeping the dream of homeownership within reach of Australians while maintaining the integrity of our world class superannuation system.

“The success of this policy is that it is aligned with the intent of superannuation which is to provide sufficient retirement income,” Denita Wawn, CEO of Master Builders Australia says.

“People who own their home, particularly in retirement, are significantly more secure financially than those who do not. They enjoy a higher standard of living.

“This policy will mean that many Australians who do not currently own a home will not have to choose between the benefits of home ownership and an adequate super balance in retirement.”

A McKell Institute report, done in collaboration with researchers from the Centre for Housing, Urban and Regional Planning at the University of South Australia, Mortgaging Our Future, released just five months ago found that allowing prospective buyers to access $40,000 of superannuation would push up house prices and increase housing-related debt.

The report also found that Australians who chose to invest in a house deposit instead of keeping their money invested in super would retire worse off, because the average returns in a super fund are superior to the average growth in house prices over the long term.

The McKell Institute's executive director, Michael Buckland, says the data showed the policy amounted to a further intergenerational transfer of wealth from young people to existing, older homeowners.

“Homes are already unaffordable for millions of Australians and Scott Morrison’s proposal would pour fuel on the fire," Mr Buckland says.

"What first home buyers desperately need is a little calm in the overheated housing market. This proposal would kick start yet another house price spiral, stripping young people of their super savings and doing virtually nothing to improve real affordability.

An Anthony Albanese Labor government would help Australians on low and middle incomes to buy houses by giving eligible applicants a commonwealth equity contribution of up to 40 per cent of the purchase price of a new home, and up to 30 per cent for an existing home.

The Help to Buy scheme would be open to 10,000 Australians each financial year. Eligible home buyers would need a minimum deposit of 2 per cent and a taxable income of up to $90,000 for individuals and up to $120,000 for couples to participate.

The Greens want to build one million affordable public and community houses over the next 20 years to tackle the housing crisis.