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Keating slams super for home deposit idea

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Former prime minister Paul Keating has slammed the idea of allowing young people to raid their superannuation for home deposit, saying it would “pull the backside out” of the system.

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Liberal MP John Alexander, who chaired a parliamentary committee into housing affordability, last week said the government was considering the proposal ahead of the May budget.

But Keating, the architect of the country’s compulsory super system, argues the idea would rob young Australians of a large block of savings at the end of their working lives.

“Were the government to proceed with this irresponsible idea, it would potentially destroy superannuation for those, in the main, under 40 years of age, while at the same time, driving up the cost of the housing they are seeking to purchase,” he said in an opinion piece in Fairfax Media today.

While tackling housing affordability is expected to be the centrepiece of the budget, Treasurer Scott Morrison declined to comment on Keating’s remarks.

He said he was focused on delivering a package of measures to reduce the burden on those looking to buy a home, rent a house and seeking affordable housing

The treasurer has had discussions with the nation’s financial regulators about issues such as investor housing demand.

“That is the appropriate place for that discussion to take place … using the levers that they have,” he told reporters in Canberra.

Finance Minister Mathias Cormann also refused to buy into pre-budget speculation.

“To the extent there is a housing affordability challenge it is because demand exceeds supply, so obviously we want to boost supply not boost demand,” he told reporters.

“You can draw your own conclusions there.”

Liberal Democrats senator David Leyonhjelm said there was no “magic bullet” to the housing affordability problem and believes governments aren’t releasing enough land.

“The governments are driving up the cost of housing for young couples … by restricting supply,” he told reporters.

But One Nation leader Pauline Hanson defended the super idea, saying people need a helping hand to buy their first home.

“Accessing their superannuation up to a certain age … I think would help many Australians,” she told Seven Network.

Fellow crossbench senator Derryn Hinch doesn’t agree.

“Accessing superannuation to buy homes is madness,” he said.

“That is going to destroy superannuation. Superannuation is there for your retirement, not to get you started.”

Labor senator Murray Watt said dipping into super may look good at first but young people would be hurting their long term future.

“It’s just plain wrong that people should get massive tax concessions to buy multiple investment properties,” he added.

– AAP

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