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Joe Hockey raises prospect of first home buyers using super to enter property market; Joe Hockey's plan for early access to super appeals to the young and the Greens
Topic Started: 6 Mar 2015, 06:31 PM (10,960 Views)
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Why restrict it to first home buyers? Why shouldn't someone who has lost their home through divorce or whatever be entitled to the same concession?
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Lef-tee
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zaph
12 Mar 2015, 11:19 AM



Super for a dep on a house is just the start. Drawing down super rather than receiving the dole is perhaps step 4.
Why not I guess? If we allow super to be used as housing deposits then it might be difficult to argue against a whole raft of other things it could potentially be used for. I wouldn't put it past Tone and Joe to come up with something like that.
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skamy
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Thats why.
11 Mar 2015, 08:06 PM
That's why it was introduced. Super is a tax to pay for the long retirement of the baby boomers.

Retirees now have a lower mortality rate than those aged 45-55, which means that over the next 20 years, more GenX will die (and stop paying taxes as a consequence) than Baby Boomers will.

The government spends more per person on those aged 75-85 than on any other age cohort, and going forward will do so on a shrinking tax base.

It was either super or income tax.

Super is a tax.
These studies are misleading and are often designed to use intergenerational baiting to garner support for otherwise unsavory measures.

While I was a tax payer I had responsibilities to the new generation and the older generation. My taxes cover the pensions for the elderly and the elderly had paid the pensions of the generation before them. This pension covered food, clothing, housing and utilities.
The younger generation we paid for many of the expenses from wages and only some from tax. We covered food, clothing, utilities, shelter etc etc.

This study now compares only the government costs of the young person with the government cost of the elderly, it is not a valid comparison. Of course the government spend more on the very elderly it always has and always will do. It is part of our lifecycle, one day everyone (if they are lucky) will enjoy an older age. It is not sensible for young people to give up their benefits for their old age, no matter what false promises the government offers you now.

What does the government want? It wants access to the next generation's super.

Young people's super will end up in the hands of existing homeowners in supply constrained cities, this is a fact. Super should only be allowed as an alternative to LMI, that is a win win for young people, they save money today and the keep their super. It would not be so inflationary.
Edited by skamy, 12 Mar 2015, 11:36 AM.
Definition of a doom and gloomer from 1993
The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
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Joe Hockey pushes super 'shock absorber' to be used during working life

11 Mar 2015, Fleur Anderson

Treasurer Joe Hockey says superannuation savings could be used as a "shock absorber" during people's working lives because "it's their savings".

Mr Hockey has continued to press for a debate on more flexible superannuation that could be used for education costs and house deposits for first home buyers even as former treasurers Peter Costello and Paul Keating urged superannuation to be kept to provide retirement savings.

"I am most concerned about the accessibility of housing for first home buyers," Mr Hockey told ABC Radio on Wednesday.

He said housing stock supply had not kept up with demand so that the average income to housing cost ratio had increased from 2.8 per cent in the mid-1980s to 4.1 per cent today.

"When I speak to young people and their parents and grandparents, they are very frustrated," he said, adding it was difficult for young people to save between 5 and 10 per cent deposit on a deposit.

And if they have university loans outstanding as well, Mr Hockey said, it made it more difficult to save.

The fact that life expectancies will extend into the mid-90s by 2055 meant it was "obvious" superannuation might need to be more flexible and "act as a shock absorber during their lives because it is their savings," Mr Hockey said.

Read more: http://www.afr.com/p/national/politics/joe_hockey_pushes_super_shock_absorber_0quOVcDfoV7s9Kbx4rNHjN
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zaph
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Hockey looks dodgy. I wouldn't trust him to look after a $5 note.
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zaph
12 Mar 2015, 12:28 PM
Hockey looks dodgy. I wouldn't trust him to look after a $5 note.
Joe could well have found himself a vote winner. I'd not like the job of trying to convince young Australians that using their super to pay off HECS debt or to put together a housing deposit is a bad idea.
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Poontang
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Lef-tee
12 Mar 2015, 11:28 AM
Why not I guess? If we allow super to be used as housing deposits then it might be difficult to argue against a whole raft of other things it could potentially be used for. I wouldn't put it past Tone and Joe to come up with something like that.
If it gets to that they may as well scrap compulsory super. Let everyone take their money now. (Massive boost to our economy in the short term, no doubt there)

Workers get the money that was going into super into their weekly wage.
There are some people who seem angry and continuously look for conflict.
Walk away, the battle they are fighting isn't with you, it's with themselves.

The first lesson of economics is scarcity: There is not enough of anything to satisfy all who want it.
The first lesson of politics is to disregard the first lesson of economics. ~ Thomas Sowell.

Who was the fool, who the wise man, who the beggar or the Emperor? Whether rich or poor, all are equal in death.
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skamy
12 Mar 2015, 11:35 AM
These studies are misleading and are often designed to use intergenerational baiting to garner support for otherwise unsavory measures.

While I was a tax payer I had responsibilities to the new generation and the older generation. My taxes cover the pensions for the elderly and the elderly had paid the pensions of the generation before them. This pension covered food, clothing, housing and utilities.
The younger generation we paid for many of the expenses from wages and only some from tax. We covered food, clothing, utilities, shelter etc etc.

This study now compares only the government costs of the young person with the government cost of the elderly, it is not a valid comparison. Of course the government spend more on the very elderly it always has and always will do. It is part of our lifecycle, one day everyone (if they are lucky) will enjoy an older age. It is not sensible for young people to give up their benefits for their old age, no matter what false promises the government offers you now.

What does the government want? It wants access to the next generation's super.

Young people's super will end up in the hands of existing homeowners in supply constrained cities, this is a fact. Super should only be allowed as an alternative to LMI, that is a win win for young people, they save money today and the keep their super. It would not be so inflationary.
It is has got nothing to do with responsibilities or comparisons or lifecycle or what the government wants or doesn't want.

It has got everything to do with a change to mortality for people over 55. Quite simply, if you make it that far, on average, you live longer. Period.End.Of.Story. Longer than any other generation before you in fact.

Young people's super is going to end up in the hands of the retiring generation regardless of whether or not smokin' Joe allows them to spend it on a house. That's the entire point of the super system, to channel funds from the young to the old via the private sector rather than the tax system. That way the government can carry on it's fantasy of being a business that makes a profit, while achieving policy aim of paying for the horrendously expensive retirement cohort.
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Drgonzo
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12 Mar 2015, 11:24 AM
Why restrict it to first home buyers? Why shouldn't someone who has lost their home through divorce or whatever be entitled to the same concession?
well said
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Superannuation plan would trigger ‘property bubble’: Louis Christopher

Joe Hockey has been warned that his idea to let young buyers dip into their superannuation would actually make housing less affordable.

The treasurer said he is concerned about the difficult position faced by first home buyers, and that Australians “need to have these conversations” about making super more flexible.

However, SQM Research managing director Louis Christopher said Mr Hockey’s idea would “promote a property bubble” if ever adopted.

“The problem is that tinkering with the property market in this way would only serve to artificially inflate demand for property and therefore push up house prices even higher than they are now,” he said.

Mr Christopher said such a policy would “have a similar distortionary effect” to the first home owner grant, which he said caused prices to rise in excess of the handouts.

He also said that Mr Hockey’s super idea would be impractical for most first home buyers in their twenties and thirties.

“With Sydney vendors now asking for over $1 million for a house, a 10 per cent deposit on a Sydney home raised through super would erode almost entirely the retirement savings of most people in that age group,” he said.

Mr Christopher said the way to make housing more affordable is not to increase but reduce government intervention – starting with negative gearing.

“Reducing negative gearing, a highly distortionary policy, would have a far more beneficial effect on promoting housing affordability,” he said.

“If negative gearing was repealed or altered, investors who are now gobbling up property would back off buying houses, which is what those who are demanding lower dwelling prices want to see.”

Read more: http://www.rebonline.com.au/breaking-news/8783-superannuation-plan-would-trigger-property-bubble-louis-christopher
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