Suggestions by a NSW junior Minister that Australians be allowed to use their superannuation to fund a deposit on their first home have been dismissed by Mercer Human Resource Consulting as an inappropriate and ineffective strategy.
The suggestion, proffered by NSW Housing Minister, Joe Tripodi, has been described by Mercer Human Resource Consulting actuary, David Knox as “the thin end of the wedge”.
He said that allowing people to use superannuation funds for a home deposit was likely to have a significant impact on an individual’s living standards in retirement.
“Furthermore, it is likely to have a marginal (if any) impact on their current living standards,” Knox said.
“Superannuation is all about saving for retirement,” he said. “As the country prepares for the financial pressures of an ageing population in coming decades, it is important that superannuation is preserved for use in the retirement years and not used for normal living costs.”
Knox said that while some countries such as Singapore allowed the use of superannuation funds with respect to housing, they also demanded much higher superannuation contribution rates on the part of both employers and employees than those which apply in Australia.
Tripodi’s suggestions regarding the use of superannuation to help fund housing has also been rejected by the Federal Government.
