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First home buyers could soon use superannuation to buy property; Nick Xenophon will introduce legislative changes in the spring session of parliament
Topic Started: 28 Jul 2014, 05:33 PM (16,484 Views)
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Nick Xenophon Needs A Punch In The Face

Saturday, August 02, 2014 2 comments

Nick Xenophon is in a bind. As a populist dickhead attention seeker, he's been outflanked by Clive Palmer. Palmer's senators, Rev-head Ricky, the LDP dude and the Family First guy are the media's new toys. The South Australian with the boot-polish in his hair is gathering dust in the corner of the senate. It must kill him.

Sitting at home while Jacqui Lambie is invited on The Project to talk big boners won't do. That should be Nick's spot. Well, not talking big boners, they eventually go flaccid. Nick needs more attention. Talking up an issue that's been stinking up the country for a long time - letting the kiddies buy a house. Fix it, Nick. I know you've got it in you.

And on such an important issue, what's a populist dickhead attention seeker to do? Talk about big words like macroprudential policy, discuss land release, negative gearing, capital gains tax and fully investigate foreign buyers in major cities? Not when there's a short-term, sugar hit band-aid option to get the blood pumping. Think the type of idea every dummy you haven't unfriended on Facebook would cheer. Xenophon wants the frustrated kiddies to get their hands on their retirement cash. When only the good die young, the future old can eat gyprock.

First home buyers raiding their superannuation has long been the crazed wet dream of every commission obsessed real estate agent and slimy mortgage broker across the country. Night after night they dreamed of getting their hands on that succulent cash. Now if they wake before expelling a load, the centrefold they pull from between their mattresses to finish the job won't be some doe-eyed hottie. It will have Xenophon's head glued on.

The horror story finally has its first gasp of serious oxygen. The idea of raiding superannuation to buy homes was previously left floating as a scungy lily-pad beyond the wadable depths of the loon pond. For anyone with common sense, it was untouchable. But some never gave up. Every few months the demented parasites at the REIA would stand on the banks of the loon pond and madly gesticulate and holler in its direction. They wanted someone to take notice, but the only ones to join them in the demented scream show were bottom of the barrel finance types.

Somehow, Xenophon, who describes himself the following way:

I believe the most important part of my job is speaking up for people who might not otherwise have a voice.

Has found himself speaking up, not for people who don't have a voice, but for some of the loudest groups of rent-seekers imaginable. Real estate and finance lobby groups who continually feign interest in "helping" the poor and unfortunate, when in reality, the largest beneficiaries of the supposed help these lobby groups continually cry for, will be their own industries.

Where are these genius ideas coming from? Let's see what Nick's media goon has put in his press release...

Independent Senator for South Australia, Nick Xenophon, will introduce legislative changes in the Spring session of parliament to allow first home buyers to access their superannuation savings to pay a house deposit.

Such a scheme successfully operates in Canada, called Home Buyers’ Plan, leading to improved housing affordability.

At a Senate Economics References Committee hearing in Adelaide today, the Inquiry heard from HomeStart Finance (an arm of the South Australian Government) outlining the Canadian scheme.

In Canada up to $25,000 can be accessed for a first home, and it’s made a dramatic difference for housing affordability there.

However, Senator Xenophon will be moving for changes to Superannuation Act 1976 to allow the release to superannuation funds for a first home, with similar safeguards to the Canadian scheme.

In Canada the amount has to be paid back into the super fund within 15 years.


Oh it's Canada. Conveniently, only a few weeks ago, Garth Turner, the Canadian MP who had a hand in implementing the Home Buyers' plan - intended to be a temporary measure back in 1992 when Canadian real estate was crumbling - addressed the failings of the scheme. The same scheme Xenophon's media goon dubbed "successful"...

Well, now the Home Buyers Plan has been used about 2,500,000 times and roughly $30 billion has been removed from financial assets inside RRSPs and dumped into the real estate market. Combined with cheap mortgage rates and lenient bankers, this helped push average detached home prices over $1 million in two major markets and made houses so expensive it takes over 70% of gross income to own one in Vancouver.

While real estate values have moderated, declined or tanked in most western countries since the financial crisis, here they’ve bloated into gasbag territory, while home ownership has become a cult. The HBP has done its bit in swelling house lust and persuading an entire nation you won’t need to save money when you can sink it all into a house instead.

But, now we have troubles, as the raid-your-RRSP scheme is telling us.

A University of Guelph thesis points out at least a third of all the first-timers who snatched down payment money this way between 1995 and 2007 didn’t actually pay it back, even when the annual repayment was less than 7% of the amount taken. Since then, things appear to be getting worse.

By 2011, says the Canada Revenue Agency, almost half (47%) of all the people who sucked their RRSPs dry to buy a home had not started returning the money. As a result, all of those missed payments were added to taxable incomes, and borrowers were forced to pay more as a result. Why would they let this happen, increasing their income tax burden rather than putting the small annual sum back inside their RRSPs?

Probably because they didn’t have the money.


If Xenophon wants to go down this path, why is he taking lessons (clearly biased) on the Home Buyers' Plan from HomeStart Finance and the REIA? The Canadian guy with the cowboy boots and a beard, who initially put the idea in place, has a website and email. Maybe contact him before trying to introduce legislation based on something that can only further hurt affordability and pump real estate values?

And if housing affordability is the key driver here, wouldn't the next logical step be to see where the country you're busy promoting as the bastion of affordability sits in comparison to Australia? The country you acknowledge is horribly unaffordable. Courtesy of the IMF...

First on the house prices to income ratio.

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See that country to the right of Australia, with affordability worse than Australia? That's Canada. Fist bump Xenophon!

And on prices to rents.

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While Australia is 54% above historical price to rent ratios, the Tim Hortons soaked land of Canada is 86% above historical price to rent ratios.

If even the most basic analysis a clown like I can put together shows Canada's HomeBuyers' Plan has not aided affordability in Canada, and has only been successful in bloating house prices, then can we acknowledge Xenophon is pulling a stunt? And a dangerous one. How long before Nick's putting together photo ops with morose looking first home buyers? One of those scuzzy shots and The Project beckons. Ugh.

Well I've got a photo opportunity for you, Nick. Anyone with a camera will show up for this one. Put your head on the line. Everyone who thinks raiding superannuation is a bad idea gets to punch you in the face. Media attention is guaranteed and there's a long tail in it. Hospital time. Reconstructive surgery. Rehabilitation. And I'm just talking about all those damaged fists. Because there's that many people who'd want to punch you in the face.

In the end, for Australia at least, it will be a lot less painful.

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Read more: http://www.idiottax.net/2014/08/nick-xenophon-needs-punch-in-face.html
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Massive
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im suprised they dont propse anyone under age of 30 is not allowed to buy a car or coffee or go to travel...

Instead a "car, coffee and travel " fund ( of an assumed value of 80% of after tax income) is with-held from youth for "their own good" that matures on their 30th birthday and must be used within 2 months on an approved mortgage scheme or forfeited forever..



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Dr Watson
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Massive
4 Aug 2014, 07:55 PM
im suprised they dont propse anyone under age of 30 is not allowed to buy a car or coffee or go to travel...

Instead a "car, coffee and travel " fund ( of an assumed value of 80% of after tax income) is with-held from youth for "their own good" that matures on their 30th birthday and must be used within 2 months on an approved mortgage scheme or forfeited forever..



All renters shall have their passports revoked, until such time as they purchase residential property ...
The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt — Bertrand Russell
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Dr Watson
5 Aug 2014, 01:43 PM
All renters shall have their passports revoked, until such time as they purchase residential property ...
...cuz yer average renter bogan gets so much more value outta Brissie or Cairns than they do outta Bali or Phuket.
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Massive
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Sober
5 Aug 2014, 07:45 PM
...cuz yer average renter bogan gets so much more value outta Brissie or Cairns than they do outta Bali or Phuket.
could just give all upcoming FHB ankle bracelets, that go off whenever they deviate from work/home routine...
no stops to coffee shop / travel agents for you !
Edited by Massive, 5 Aug 2014, 07:48 PM.
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Don't Buy Now
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Given our construction efficiency, all house price increases inflate LAND costs!

If Australia’s three levels of government wanted a dynamic economy, they would drive land prices to the floor!

The transition would hurt like hell but we have arrived at a point where the costs of persisting exceed the cost of change!

If we keep going, Mr Market will eventually do the price correction for us!

Woe betide anyone heavily geared when that happens!

Don't Buy Now!
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Allowing first home buyers access to their super isn't the answer

Todd Hunter | 5 August 2014

The draft proposal to allow first home buyers to access up to $25,000 from their superannuation to buy their first home is absolutely ridiculous.

The whole concept of superannuation itself is to provide compulsory savings for people who are working, so they have a fund tofall back on when they retire.

At some stage in the future, Australia will not have a pension. Superannuation is a forced saving scheme, so people who are working now become self-funded retirees.

If first home buyers are able to access their superannuation in the first stage of their working lives - and most of them are under 30 years of age - they'll be taking a large lump sum of money that will take away massive growth from the early stages of their fund's growth.

What's appears to be a little problem now will turn into a catastrophic event when it's time to retire. It will just create another push on affordability, from a different angle.

If the policy goes through and it sees a big take up, we could see house prices go up, through greedy developers.

When there was the full switch over to first home owner grants for only new properties, you saw prices increase overnight for new house and land packages. One day they were $310,000, and the next day they were $330,000.

Superannuation is a very heavily governed industry. So I'm sure the take-up will not be as big, initially, as ASIC oversees the superannuation industry and it will be heavily regulated. But if it does
take off, you will definitely see the sharks out there taking advantage and putting prices up.

Rather than dipping into their funds, and trying to outstretch themselves, first home buyers should rethink where they want to buy. If you can't afford to buy in an area, you shouldn't be trying to live there. If you can't afford to save a deposit for a home after paying rent, that also says you probably can't afford to live there.

Instead of taking money out of their super, first home buyers should think about changing their spending behaviours.

As a society, we have people to mow our lawns, we buy a coffee each day, we have our clothes dry cleaned, we're having our cars washed. We even have our dogs washed! 20 years ago, that never happened. It's about getting back to basics.

Every week, when you get paid, you should be putting some money aside. Some say, "that money simply isn't there". If that's the case, you're probably living in an area out of your budget. You should be able to save some money, even if it means you can't live in the most desirable part of Sydney or Melbourne. People are certainly living beyond their means.

You might need to live in the outer suburbs. Sydney is the worst location for affordability, even in the outer suburbs - so it might mean you need to consider moving to Melbourne. On the outskirts of Melbourne, there are plenty of new houses available for $300,000.

When I bought my first property, it was a little one bedder, and certainly not ideal. I saved by bum off to get a deposit together. And there wasn't a first home owners grant either. Homes are a lot more expensive today, but incomes are also a lot higher.

Of course, some industry organisations will support the proposal. Everyone has an agenda. Everyone wants to see a "good" property market. The developers want to sell properties. The real estate agents have to sell properties. They're obviously going to support it. The building associations obviously support it as well.

In reality, first home buyers need to rethink how they save for their first property.

Read more: http://www.propertyobserver.com.au/finding/residential-investment/1st-home-buyer/34144-allowing-first-home-buyers-access-to-their-super-isn-t-the-answer.html
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The Propertied Federal Political Class

5th August, 2014
Lindsay David , Paul Egan & Philip Soos

Aussie Politicians and their $300 Million Property Portfolio

“With more and more Australians finding it difficult to break into home ownership, adopting the Canadian scheme would make a difference to thousands of Australians each year,” Senator Xenaphon said;

“As HomeStart Finance said this week, there’s something strange about being able to access your super fund if you are about to default on your housing loan, but you can’t access it to put a deposit on a home in the first place,” he said.

Australia is in the midst of a chronic housing affordability crisis. Housing price inflation has outstripped both rents and household incomes for over a decade, leading to a residential property market considered unaffordable both historically and internationally. Yet, instead of helping to resolve the crisis, Australia’s political class is apparently determined to maintain world-beating prices with poorly but purposefully designed policies to maximise prices.

The public should ask “Are the property holdings of our federal politicians negatively influencing policy and causing them to ignore evidence?” The parliamentary register of members’ interests may help to answer this question, allowing for a summary report of real estate holdings for each Australian federal politician (which may be jointly owned with their spouse).

It is evident that politicians are heavily invested in the property game, with the 226 members in both houses of parliament with an ownership stake in a total of 563 properties – an average of 2.5 properties per member, conservatively estimated at around $300 million (563 multiplied by the median dwelling price of $530,000 as of July 2014).

The real total is probably higher considering well-off politicians are likely to purchase real estate in prime suburban and coastal areas above the median (and not all property holdings are residential such as farmland and commercial properties). Property investment is popular across the political spectrum and is a common thread binding the normally divided and bickering politicians together.

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Australia’s federal political class own an enormous property portfolio, with only 13 of the 226 members (6 per cent) not holding any real estate. In the Senate, 76 members own a total of 202 properties – 2.7 properties per Senator – estimated to be worth around $107 million.

Further, 91 per cent of all Senators own real estate (57 per cent investment/commercial property/vacant land, 41 per cent owner-occupied and 2 per cent recreational), 75 per cent have a mortgage, and the top ten control a colossal 95 properties.

Senator Xenophon maintains an impressive portfolio of eight investment properties, along with Senator Barry O’Sullivan from the National Party who owns an incredible fifty properties (see Table 2). The high concentration of landed gentry in the Senate acts as a vested interest to pass policies which inflates housing (land) prices.

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The 150 members in the House of Representatives also have substantial property interests. In total, they own 361 properties – 2.41 properties per member – estimated to be worth around $191 million.

Moreover, 95 per cent of all Representatives own real estate (54 per cent investment/commercial property/vacant land, 43 per cent owner-occupied and 3 per cent recreational), 86 per cent have a mortgage, and the top ten own an astonishing 92 properties. Double-digit property holdings are maintained by David Gillespie (NP, 18 properties), Clive Palmer (PUP, 13 properties), Natasha Griggs (CLP, 12 properties) and Karen Andrews (LIB, 10 properties) (see Table 2).

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The trends in the data suggest a sizeable majority of federal politicians have a vested interest in maintaining high housing prices, particularly since most have mortgages over their own investments. A fall in housing prices may cause many politicians to fall into negative equity, providing a strong incentive for politicians to enact legislation which has helped fuel a housing bubble, enriching owners.


When the top twenty members of the landed gentry in federal parliament own 191 properties, it is difficult to believe that politicians will address the real causes of housing unaffordability, despite the recommendations from government reports.

If federal senators like Xenophon are looking for solutions, the focus should be on negative gearing, capital gains tax concessions and exemptions, liberalised SMSF and foreign property investment, first home owner grants and boosts, deregulated bank lending, land-banking, town planning, local infrastructure and development levies and the absence of a uniform land value tax.

The property-rich Senate and House of Representatives cannot be trusted to act in good faith on matters concerning real estate. Aversion to evidence-based housing policy has a long and tortured history, owing to federal politicians’ interest in maintaining the value of their collective real estate bounty, and also fearing a voter backlash following any substantive reforms that reduces prices, let alone the corrosive lobbying (legalised bribery) by the FIRE sector.

Politicians regularly demonstrate flagrant ignorance of policies which lead to more affordable housing, having consistently implemented flawed reforms that actually increase prices. Negligence and indifference has become par for the political course, suggesting the direction of housing policy must be freed from the vested interests of an unrepresentative parliament.

Read more: http://blog.australiaboomtobust.com/2014/08/propertied-federal-political-class/
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herbie
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Xenophon has 8 IPs (Says Mortgage: "Yes") and doesn't own a PPOR - LOL!
Edited by herbie, 6 Aug 2014, 10:59 AM.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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herbie
6 Aug 2014, 10:58 AM
Xenophon has 8 IPs (Says Mortgage: "Yes") and doesn't own a PPOR - LOL!
The pollies are all deep into IP's.

I remember a few years ago Labor put up a new fella, a working class champ they said. 34 years old. The media found out he had 6 IP in his portfolio, and Labor quickly dropped the champ moniker.

Too repeat, the Pollies are all into it. Our treasurer, Slim ball Hockey has about 10 mill in IP's.

And that is why they will always be pro Property Investors. EOS.
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