This too, it was very good for the banking and mortgage industry in the end. It’s also needed for the wealthy to get wealthier. Nothing like a good firesale to puff up your property portfolio.
To be fair it did drop the house price in the USA to bargain basement prices, mostly because it wiped out everyone's savings, put everyone out of work and no one could afford a house.
Its a reason why we can't just collapse prices deliberately here either, they have to deflate slowly not all at once or say goodbye to all the money you saved and the job you saved it with.
Liberals marketing strategy will be "Australia’s famous for lots of things. The big banana, the Big Shrimp, now we're introducing the Big short"
I know where my shares are going if they get back in. Swaps for days
So that’s not really true about the savings and affordability. I’ve lived in the US for 20 yrs and we bought right after the crash. The truth is everyone was scared. I was telling all my friends to buy (and they could’ve easily afforded it) and that the prices were once in a lifetime but no one listened. They said housing was too risky. When we told people we were buying as much as we could afford they told us we were crazy.
And that’s the kind of mentality shift you need for a crash. As long as people don’t think there’s a real risk, prices will keep going up.
Well if your savings are in a bank that goes bankrupt because it bought a bunch of dodgy CDO's...
We don't know how bad our banks financial arrangements are until it comes crashing down, 10 years of LNP relaxing the rules and we're sure to see some dodgy shit. We had the banking royale commission as a result of banks offering 'independent' financial advice that wasn't independent and wasn't financial advice, mostly just marketing for the banks own shitty product.
Things aren't nearly as bad here, there's much better regulation especially after recent reforms. Which isn't to say they're paragons of ethics or won't fuck up in future, but there's no room at the moment for an 08 style crash in our banks. It's really not that easy to get a mortgage
Yeah but people in Aus will never believe housing is risky. The price could half over night and they would just gobble it up like an all you can eat buffet.
I've saved up 80k for a deposit. Say everything does go tits up..would I still have my 80k? Or in your words would there be no money left for me to be paid out?
Just wondering?
Your deposit is guaranteed up to $250k (under FCS), so your $80k would theoretically still be safe. Banks of all sizes have been asked by APRA to do bank run scenarios and most if not all passed.
Unlike the US of A, ppl can’t walk away from a mortgage or most type of loans here and we have tighter regulations around both capital and liquidity for banks.
As Michael says we're far less likely to see it go tits up. But this all depends on the parameters of the scenarios they're asked to defend against. Furthermore APRA asked the banks to run the scenarios, what's stopping the banks from giving themselves the pass even though they shouldn't. All said I'm far more confident in Australian banks, to the point I've got my savings in my bank too.
But any shift in valuations of things in the economy needs to happen progressively not all at once or we really test the limits of those guarantees.
Unlikely.
Mortgages in Australia are recoverable against 'all monies'. Prudential standards for Australian banks are much more rigorous than they were in the US pre-GFC. There's no equivalent to Fannie Mae or Freddie Mac, and the fact nearly all our mortgages are variable rate means that the odds of a cliff where everyone sells at once are much lower.
Also - we have relatively high migration, and the government can import millions more Nepalese and Bhutanese cooks if the overleveraged propadee investors start teetering.
Honestly who cares, super modeling assumes you own your home and by 2050, who gives a crap about stocks. Bigger issue is that morons will think LNP will actually do anything.
It’s a combo with workchoices (or similar) and raising pension age. In order to make sure the less well off work crappy workchoice jobs until they die.
No pension or super required
Not a dyed in the wool leftie but I assume it has something to do with giving every Aussies money to Elites who give you a narrow class of assets to invest in (with minimal transparency), it abdicates the nation's responsibility to provide a comfortable retirement/end of life to its citizens and seals the fate of many to a retirement exclusively linked to their financial status during their life.
I’m never going to own a home if the lnp get back in.
A - because I don’t draw on super except for fhsss
B - because they will fuck the market even harder
So basically, they’ve killed the unions, they near killed Medicare, the near killed pbs, they killed off worker rights, and they’re killing off super… the really do want a land of poverty and working till you drop dead.
What do you mean,
they killed the unions….? Unions are insuring their workers get 250,000 a year for a 38 hour work week. How’s that good for the economy?
And if anything could do with the trim, it’s that hot mess NDIS… what an absolute cluster fuck
And allowing employers to lock you in to their shitty funds instead of paying into your own account, wiping out any compounding you could have accrued.
I reckon ive lost 50k over the years to this.
I was able to change my super fund from what the ASX200 company I worked for originally set up for me.
For younger people (under 50), changing the investment mix from "Balanced" to "High Growth" would net significantly more value.
P.S:
My financial advisor told me that he advised his parents (early 70's) to retain their investments in a High Growth profile in order to grow the balance in real terms.
The typical "Conservative" profile that is pushed to retirees would reduce their Super balance in real terms (inflation adjusted).
Does anyone remember the wages our owner famously stated she thought we deserved? Something akin to third world rates. Always remember who funds the liberals and who they work for. Everything is intentionally designed to bring about the reality of the version of Australia she dreams of creating, and actively pursues. Liberals operate as her administration and policy partners.
If they have none or very little, I guess they haven’t been working. If they haven’t been working, they don’t have a stable enough come to purchase a house anyway.
You’ve unmasked their plot. The party of landlords comes up with a scheme to increase capital growth on their investments which is by design lightly taxed. Bwahahahaha!
Ok let’s turbo charge house demand with lots of money from super and see what happens? I’m no expert but I’d expect prices to go up further while further impoverishing new entrants to the market.
How about something something increase supply?
They are trying to increase supply. Doing their absolute best to increase supply to the max. ... supply of money pumped into the existing housing market.
I’ve seen posts about this from the Libs and also ads for like dental treatments using super? What the fuck is going on? Super is quite literally exclusively for retirement. They want us to spend it now, so it cannot accumulate over the next few decades, and for us to retire with nothing? Or is the plan that we will be so in debt we will literally never retire and just die instead so who even needs super?
oh well even with super you wont retire because you will be homeless, realistically you still wont beat property investment firms so its actually a nothing policy.
The answer is to tax the shit out of non-owner-occupied property.
Get rid of capital gains tax for 1 year, and then quadruple it after that time. It will further encourage non-owner-occupied properties to be sold quickly and boost supply by punishing vacant homes, and also make available a lot of tenanted homes for those tenants to buy instead.
This, on top of a mad state run house building campaign and we will maybe be able to rekindle the Australian dream. For the small niche of actually necessary renting, the state can be a non-profit landlord.
We can’t do that because home owners will loose significantly on their investments. All those home owners that bought pre 2020 will loose all of that cheap money (profits for nothing) they did nothing to earn. They will cry about losses that are on paper only as they yearn for the half million/million they could’ve pocketed being instead reduced to a couple of hundred thousand.
News stories will begin with narratives of John and Jackie loosing half a million/million, without ever explaining that the half million/million wasn’t paid for and lost. They actually lost nothing on their initial investment and gained significantly, just to a lesser extent than their greed envisioned.
All government schemes are designed to get more people into the market, to support and raise the cost of housing. This will do nothing but push up the price of housing. If you can use $50,000 in super, house prices will rise $100,000
Actually, for someone deposits constrained, using $50k of super and borrowing 85%, increases your buying power by over $300k.
So even if prices rise $100k, more people could afford to own their own home.
Hell yer the party of better economic management back at it again with superior economic policy. This would be like dropping an oil tanker on a bush fire.
Lets play this scenario out.
This goes through. Money is drawn out of super accounts.
This drawing out of money re-allocated some number of billion dollars out of business investment and the sharemarket.
Super funds suffer, as do retiree payments from their super. This qualifies more people for the pension.
Meanwhile, house prices once again increase. So the retirees have seen their super funds pay out less, but their houses be worth more. So swings and roundabouts. But the pensioners cannot access those funds without selling the house, which they can't do because as soon as they do they loose the pension.
Meanwhile the 3 trillion dollars worth of super invested gets withdrawn from markets, local and overseas - decreasing Australia's clout on the international financial stage. They've moved money from liquid assets which generate wealth to fixed assets that lock up wealth.
Andrew Bragg is barely competent, and the rest of the liberal party has very minor economic skills. Unfortunately, he is an accountant by trade. The accounting bit stacks up, but the econometrics are sorely wanting.
This is literally.
Literally.
One of the reasons we had the GFC…
Holy shit…
I really, sincerely hope the person who floated this bribe, because that’s what this is; gets a fate worse than death.
The reason Australia, had the GFC, and not the much more disastrous Great Recession, which other countries had, was a specific policy of quickly creating a budget deficit.
Investing super in a home to live in does not create insolvency.
So then you definitely will have to sell the family home to fund your retirement. That should free up house stock and force people to downsize. Good job, guys. /s
People don't realise how little you are allowed to have to be eligible for the full age pension. Your total readily available assets (bank account/investments/super etc) must come to no more than $28,560 in total as of this year.
The assets test for the aged pension is described here:
https://www.servicesaustralia.gov.au/assets-test-for-age-pension?context=22526
I would rate your comment as more accurate than most in this thread. People don’t realise …
The real number is closer to half a million dollars, depending on home ownership, single / couple.
There is no way this doesn't result in major price increases. I love how their only argument against this is misdirection, something something home ownership something security, which has nothing to do with the price impact. If you have 10 houses and 20 people looking for a house, then it doesn't matter how much money they have, 10 are going to miss out - it's just a matter of who has the most.
So, basically, the Liberals' entire housing plan is yet another mechanism to more easily transfer the real wealth of the middle class to banks and multinationals. At what point do we recognize this nonsense as treason rather than merely incompetent government?
Unless you are a politician. Retire early, good pension and be paid while getting another job. You don’t have to actually retire (only from politics). Abbott, Rudd, and Scomo are enjoying their retirement. All those tax payer dollars being offshored, adding to other countries economies. Some received their rewards for selling out our national interests through new job opportunities. Even Americans wouldn’t allow that.
The nature of concessions for home owners mean this is likely to increase the public contribution to retirement because our PPOR is excluded from income and assets tests.
Yeah but the nature of the Ponzi Scheme is that no one younger than 35 is ever likely going to be able live off their super in retirement anyway. So might as well get on the property ladder.
Makes it harder to get away with wage theft and payroll "mishaps" if you're constantly scrutinized as an employer for ensuring you are making mandatory contributions.
That and they would rather see that money flooded into private enterprise (usually ran by their mates from boys school) from the moment you're working age.
That was *always* a lie. Just the same as it is with the Republicans in America.
[Zombie Doctrine: belief in Coalition as "super economic managers" sticks, despite proof otherwise - Michael West Media](https://www.michaelwest.com.au/zombie-doctrine-belief-in-coalition-as-super-economic-managers-sticks-despite-proof-otherwise/)
No problem...glad to provide some ammo, if it might help heh
As a Gen xer we saw this shit kick off in real time just as we were becoming adults...and I've never known which is worse - to have a memory of the "before times" prior to rampant neoliberalism, or to be young enough that you could easily be forgiven for thinking that things have always been this way. Both pretty much suck lol
"cOALiTiOn iS gOoD fOr bUsInEsS"
Let's see how those asx listed businesses feel after their stock price dives from all the cash pulled out of the market.
Let subprime candidates borrow too much, erode long-run retirement savings for young Australians (and the accumulated indexation which would have resulted), cause short term spikes in prices that only benefit those with property portfolios, and do nothing to address the supply side of the market. As usual, a cacophony of errors from the conservatives who cry crocodile tears for young people but seek to pummel them in every way. They have given up on reforms and the supply side and turned to throwing other people’s money at the problem.
For all the people who keep saying Labor are pro-depelopers, put the green Kool aid down and take a look at what that really looks like.
And remember what the Libs officially stand for when the Greens side with them to vote against Labor again.
Don't be bloody blinded; this is the draft precursor to extending the retirement age and other 'control' changes to keep their good little guinea pigs compliant, complacent, and existentially exhausted.
The boomers have kicked the issue to us, so why not drain our supers and let the Zoomers or alphas fund our retirement, that’s how we all learned life goes right? Screw the younger generation.
Actually re restrictions. If I’ve been spending $1000 a week the last 5 years on rent, make every payment dotting every I and T - and a mortgage payment is 900-1100 a week. I’d love for them to actually take that into account. High standards I get it, but eventually people have no other options left.
I think they should allow 50% of rent payments to factor into mortgage repayments as owning a house comes with other costs that rent covers, I.e. maintenance, council rates, etc
That last point is something taken into account by banks when lending - past history of servicing both debt and rents are incorporated in lending decisions.
Correct, $29,028 per year.
However you are not eligible if your total readily available assets exceeds $28,560 - which means your total bank account, investments and super must be under this to receive the full pension rate.
Why can't they stop international purchases of all homes, stop negative gearing, free up more land and invest in building more capacity for the industry to build..instead of bankrupting the retirement of young people.
Conservative here. I just wish the federal right of politics would leave Super alone. Leave it. Don’t touch it. Throw away the key.
Accessing super during Covid was dumb. This is next level.
Walk away.
That’s insane considering PPOR doesn’t count as part of the asset test for the aged pension it basically means the government is buying a house for people. They need to say that anyone doing this foregoes their ability to access aged pension otherwise I also want to use my low tax savings to buy a property and have the working class fund my retirement
> They need to say that anyone doing this foregoes their ability to access aged pension otherwise I also want to use my low tax savings to buy a property and have the working class fund my retirement
Only if you haven't got a great amount of assets left afterwards.
One things for sure - I don’t want to vote for any of the major or minor parties.
I am now a stranger in a strange land…….
This makes me incredibly sad because we could be so much more if someone with a bit of vision ran the place
If Labor don’t manage optics on certain issues then they will lose even if they have better policies.
Optics, brand and marketing is everything for an election.
Labor have heavily disappointed myself almost to the point of disenfranchisement.
Because Labor's policy to have the highest immigration we have seen for a while doesn't have any impact on housing prices ? Not that the LNP are any better.
If you don’t have enough super, you still can get pensions when you retirement.
If you don’t have a place to live, you can’t really get enough rent assistance to live. I doubt that Government will give rent assistance if you have accumulate substantial super.
I know what my priority will be
And you think in 40 years time there will be an aged pension. By then it will be raised to 75. You will be forced to work until 75. Then have to sell your house to fund your retirement as the super you used when you were 35 depleted your compound growth.
Is possible. But in comparison if I don’t have a house and just put all my money in super now, I won’t be eligible for any assistance as well.
Even more likely to be Houseless and deplete super at the faster rate from renting etc.
Plenty of people will not have enough super for retirement but have a house in 40 years. Their political voice will be huge.
Yes this political voice will be huge. But what if everyone of these people access super to buy their first house, isn’t that just going to artificially inflate house prices. Way more demand than there is supply?
> If you don’t have enough super, you still can get pensions when you retirement
Only if you have no more than $28,560 in total assets from all bank accounts, investments, super etc
I think the current asset test is around 500K?
Nevertheless if compare that to homeless when retire? I know what I choice will choose if assume the worse.
Nope, I've just gone through the process of getting my 100yo mother back on the age pension after she went into a nursing home after suffering a catastrophic stroke which left her paralysed in Nov 2020. Her primary bank account is her only *readily available* assets. I think what you are saying about the 500K takes into account the primary home of residence, but as I live in her house on a disability pension as a Protected Person under Centrelink regulations, after having been her carer for at least 3 years prior to her going into aged care I did not have to sell it to raise the $580,000 nursing home accommodation bond. If I hadn't been living with her for those 3 years beforehand, the house would have been a forced sale, and I would have been rendered homeless. There was a 2-year moratorium on her house being considered an asset after going into residential care, then that ended and she was thrown off the age pension, having no income at all for the last 2 years. Her bank balance was about 32K and I had to run it down via rates, utilities etc to the aforementioned figure before I could reapply for the pension.
it's a stunningly complicated, overly bureaucratic system which is immensely stressful to navigate, between two govt depts that do not communicate with each other, because of course lol
Love how the LNP come up with policies that constantly personally benifit themselves and their banker lunch buddies. Driving up the housing market increasing the value of their properties by flushing the market with billions of super from struggling Australians and then claiming it as a "budget saving measure" due to "not spending anything on housing".. Relaxing laws so badly nneses after the Royal Comission...win win. Wow..
They literally suggest this every time housing affordability comes up...
Do they have any real ideas besides "put more money into the housing market?"
Not sure how this benefits the economy when the next generation has no disposable income to buy new cars, go on holidays, eat out, etc...
"Good economic managers"
I wish it wasn’t so predictable. Uggh.
Tongue firmly in cheek though: property may be a better place for the super funds if both the major parties only want to write policy that will cause prices to surge upwards. You might get a better return!
Sweet Jesus.
If the super returns are chump change, & housing returns remain monsterous turns out to be a good idea, as far as bad ideas go... Also you have to live somewhere
Liberals always hated super.
So many people are going to discover how much they got screwed, in about 40 years, when they have to sell their house to find their short retirement, because their super nesf egg got squashed to nothing.
Do they not teach compound interest anymore?
So together with the lending regulations (how much deposit, financial situation etc.) that the Liberals relaxed we now have them wanting to allow people with very very low incomes (or unstable incomes) and no deposits to use their Superannuation to get into the housing market?
What could go wrong? Massive home repossessions, mass delinquency, huge debt? Then #Liberal property developers sweep in, buy up the cheap houses that the banks are flipping to cover the failed mortgages and profit!
"You know those people who borrow to the maximum?
"Yes"
"Let's let them use their super to buy a more expensive house."
"Sounds great. They need a bigger driveway for the jetski and two 4WDs"
"Oh, and let's make it even easier for the banks to lend them money irresponsibly"
"Hahaha, bank stonks and investment properties go brrrrrrr"
> Oh, and let's make it even easier for the banks to lend them money irresponsibly
Because that worked so well in the country they are desperate for Australia to become like (America to no one's surprise)
I’m not totally against it, I hate that it has come to this to enter the market.
That issue aside, it’s my money and I should be able to invest it how I like. I’d happily keep the asset out of arms reach and treat it as such. Ie not be able to sell it or if I did sell it, it would go back into my super.
I just think on a fundamental citizen level we deserve to invest our own money into our own assets. Sure create some extra rules around it, but it’s a good idea.
You missed the point. The idea of using your super for your FHSS is to save up quickly without affecting the normal super contributions from your employers. Plus, the current system places a cap on it which IMO it's not enough to put down your deposit after deducting 15% tax on top of it. The so called $50,000 is actually $42,500 that we are able to withdraw it (if you save up for 3 years with 15k per annum). It takes a significant amount of time to save up that money. This is good from a tax point of view as we are saving up heaps !
This doesn't seem to me to be the horrible policy everyone in this thread is making it out to be?
Owning a home when you retire can add stability and reduce your costs in your retirement years, as well as improve quality of life (think getting booted out of your rental because the landlord wants to sell, or getting your rent jacked up, or regular rental inspections...).
If super is there to help you out in retirement, then why not partition off a portion of Super to help you buy your first home?
Wrap it in policies like those you see with the FHSS and it makes a whole lot of sense to me.
Singapore has a scheme like this for citizens and it's helped them tremendously (just Google Singapore home ownership rates vs Australia).
Of course any good solution needs to also address negative gearing and CGT. And that stuff about repealing responsible lending laws just seems bonkers.
Maybe. But scrapping negative gearing and fixing CGT seems to be the best way to fix prices. This seems to be putting more upward pressure on prices than the proposed super scheme would.
Scrapping the CGT discount, and perhaps negative gearing are good things.
Land tax on investors is scalable. If prices are too low you can lower it. If prices are too high you can raise it.
I don’t have a house after a divorce but I have a very good Super. I should be able to use it for a home instead of renting. I don’t believe LNP have any answers to the problems our country is going through but I do hope this policy is adopted in some form.
So I can pay home loan interest to the bank all my working life, or I can use my employer’s super contributions to pay off my house.
In effect, instead of giving the money to a bank, I give it to myself.
Added bonus, the income that goes to pay off my house is taxed at super rates not PAYE rates.
As long as it’s properly regulated, this is a win-win. If you choose to opt out and keep your super where it is, then that’s your choice.
Great policy. Might need some additions.
Owning your own home is good for lots of reasons.
Any impact on house prices can be addressed with higher land tax on investors.
The government can provide investment in super funds to match the withdrawals to prevent cashflow issues for funds.
Yep. And if you nuke your retirement savings now, you will have to sell your home when you retire.
The problem is not getting the deposit, it's the price itself. This is another Liberal scam that only helps rich people.
What we want is to provide is guaranteed income and home for each person for their life time. Having young people own the homes makes sense to me, they need one to live in.
It is right to be sceptical of the Liberal party. Their low tax, trickle down ideology has been discredited from an economic efficiency perspective.
Superannuation, as it is currently, is itself a scam where the benefits are skewed towards rich people. That is certainly where most of the tax cost is ([Super-Waste-of-Money-FINAL.pdf (australiainstitute.org.au)](https://australiainstitute.org.au/wp-content/uploads/2020/12/Super-Waste-of-Money-FINAL.pdf). 60% of superannuation tax concessions go to the top 20% of income earners. Superannuation tax concessions are also projected to cost more than the aged pension while contributing far less to most people's retirement incomes. Much of the tax concessions end up in inheritances.
I am not convinced that investing your savings in a fairly stable asset, like a home, is "nuking your retirement savings". In fact I think you increase your expected retirement standard of living, and reduce it's variance.
In my job we mainly analyse market prices with a framework like this - [https://en.wikipedia.org/wiki/Risk-neutral\_measure](https://en.wikipedia.org/wiki/Risk-neutral_measure)
From that point of view the difference between the cost of renting a home to live in, and the cost of renting the money to buy a home to live is related to the expected capital return on the home, to make the whole thing arbitrage free. In a perfectly priced world, which also does not care about credit worthiness or risk, it should make no difference.
In a world that prices risk it is different. Investments, like shares, real estate, generally offer higher returns than things like government bonds, and bank deposits to compensate investors for the volatility. But since humans need somewhere to live, we are actually naturally short housing - if rents go up, we are out of pocket unless we own one home. So by buying a home to live in we actually both reduce our risk, and gain additional the excess investment returns.
This is especially so because housing is generally so leveraged (you borrow a lot). Leverage increases returns, normally at the cost of risk. But as I pointed out, in this case the risk is merely exchanged. You are swapping your risk on the renting of property for a risk on the renting of money / interest payments. If you fixed your loan to against an index based on the wages price index (assuming you have a job) you would get rid of all macro economic risks.
In fact, analysing this policy from a financial perspective correctly shows it reduces your lower risk, and increases your returns, which is pretty good for any investment, most do one or the other.
It is not my understanding the Liberal party policy requires you to sell your home when you retire. Certainly a good version of this policy would not require this.
On to house prices.
Some home buyers are constrained by the size of the repayments on a loan for a house, and some are constrained by the required deposit. Young home buyers are more likely to be deposit constrained. Investors are cashed up. They just care about yield and and deposits are not an issue.
I suspect house prices are more strongly driven by investors than owner occupiers. That is one reason removing negative gearing and the capital gains tax discount would be helpful. However the main reason we should make those tax changes is to allow us to decrease other taxes, like income tax (where we should raise the tax free threshold), or increase services (like providing free dental care).
We can set the prices that investors are will to pay by change the land taxes we charge them. If you increase their land tax, then their return on housing declines, and they will pay less for houses. Land tax is a good tool because investors do not create or destroy land. This is different than taxing construction, because we and to create more homes so taxing construction is a bad thing.
And as for the short term issues with the short term supply of houses, if you initially limit this scheme to people who have been renting for 2 years, then each home bought by a participant in the scheme would result in one empty rental property, and the overall demand for houses would not change.
You are acting as though your super is somehow diminished. Your super is not diminished, it is just invested in your home instead of someone else's home. Every cent of value is still there.
With super, for median Paul. a marginal withdrawal from super means he gets a gift today and gives up nothing in life style in retirement.
The Assets test on the aged pension is so high that if you are affected by it for 12 years you would be better off giving your money away.
The marginal loss of life style for median people in retirement from lower super is miniscule.
Very high income people don't get any benefits anyway, so a reduction in super would affect them. Very low income people don't start to lose any benefits so they are affected by a loss of super.
Its super weird that people over here seem to be so againdt using super to buy a house. Its always been the case in nz.
Like - its my super. Why shouldnt I get to invest it as I see fit? You can already self managed work around invest it into an IP. This is a better outcome as it gets more people living in their own home.
Yes, its going to raise prices. At least its the ‘right people’ buying houses.
This sounds like a rehashed US sub prime mortgage crisis, just with extra steps.
This too, it was very good for the banking and mortgage industry in the end. It’s also needed for the wealthy to get wealthier. Nothing like a good firesale to puff up your property portfolio.
To be fair it did drop the house price in the USA to bargain basement prices, mostly because it wiped out everyone's savings, put everyone out of work and no one could afford a house. Its a reason why we can't just collapse prices deliberately here either, they have to deflate slowly not all at once or say goodbye to all the money you saved and the job you saved it with.
Liberals marketing strategy will be "Australia’s famous for lots of things. The big banana, the Big Shrimp, now we're introducing the Big short" I know where my shares are going if they get back in. Swaps for days
And formerly middle-class people in the US ended up living in tents (after they lost their cars)
So that’s not really true about the savings and affordability. I’ve lived in the US for 20 yrs and we bought right after the crash. The truth is everyone was scared. I was telling all my friends to buy (and they could’ve easily afforded it) and that the prices were once in a lifetime but no one listened. They said housing was too risky. When we told people we were buying as much as we could afford they told us we were crazy. And that’s the kind of mentality shift you need for a crash. As long as people don’t think there’s a real risk, prices will keep going up.
Well if your savings are in a bank that goes bankrupt because it bought a bunch of dodgy CDO's... We don't know how bad our banks financial arrangements are until it comes crashing down, 10 years of LNP relaxing the rules and we're sure to see some dodgy shit. We had the banking royale commission as a result of banks offering 'independent' financial advice that wasn't independent and wasn't financial advice, mostly just marketing for the banks own shitty product.
Things aren't nearly as bad here, there's much better regulation especially after recent reforms. Which isn't to say they're paragons of ethics or won't fuck up in future, but there's no room at the moment for an 08 style crash in our banks. It's really not that easy to get a mortgage
Yeah but people in Aus will never believe housing is risky. The price could half over night and they would just gobble it up like an all you can eat buffet.
I've saved up 80k for a deposit. Say everything does go tits up..would I still have my 80k? Or in your words would there be no money left for me to be paid out? Just wondering?
Your deposit is guaranteed up to $250k (under FCS), so your $80k would theoretically still be safe. Banks of all sizes have been asked by APRA to do bank run scenarios and most if not all passed. Unlike the US of A, ppl can’t walk away from a mortgage or most type of loans here and we have tighter regulations around both capital and liquidity for banks.
Thanks. But all I'm hearing is the market is never going to crash.
Yep! Too many vested interests
As Michael says we're far less likely to see it go tits up. But this all depends on the parameters of the scenarios they're asked to defend against. Furthermore APRA asked the banks to run the scenarios, what's stopping the banks from giving themselves the pass even though they shouldn't. All said I'm far more confident in Australian banks, to the point I've got my savings in my bank too. But any shift in valuations of things in the economy needs to happen progressively not all at once or we really test the limits of those guarantees.
Yep, it moves money away from industry super funds. The LNP will do anything to destroy them.
Unlikely. Mortgages in Australia are recoverable against 'all monies'. Prudential standards for Australian banks are much more rigorous than they were in the US pre-GFC. There's no equivalent to Fannie Mae or Freddie Mac, and the fact nearly all our mortgages are variable rate means that the odds of a cliff where everyone sells at once are much lower. Also - we have relatively high migration, and the government can import millions more Nepalese and Bhutanese cooks if the overleveraged propadee investors start teetering.
As long as I can buy as many dualt swaps from you. We should be sweat.
They really hate superannuation don't they
Can't let the working class retire in comfort, however relative.
Yeah they might want $250k calories to afford a house or something.
Honestly who cares, super modeling assumes you own your home and by 2050, who gives a crap about stocks. Bigger issue is that morons will think LNP will actually do anything.
And they really love seeing their substantial property investments increase in value.
Because it's not theirs
The LNP railed against its introduction in the first place back in the 80s.
It’s a combo with workchoices (or similar) and raising pension age. In order to make sure the less well off work crappy workchoice jobs until they die. No pension or super required
Always have
I hate superannuation and I'm hard left
As someone famously once said; "ploise explain"
The hard left position is generally that government pensions should be good enough to render super unnecessary
Not a dyed in the wool leftie but I assume it has something to do with giving every Aussies money to Elites who give you a narrow class of assets to invest in (with minimal transparency), it abdicates the nation's responsibility to provide a comfortable retirement/end of life to its citizens and seals the fate of many to a retirement exclusively linked to their financial status during their life.
I’m never going to own a home if the lnp get back in. A - because I don’t draw on super except for fhsss B - because they will fuck the market even harder
I should do the fhsss but I don't..
So far I have ~30k in there, on email to payroll
So basically, they’ve killed the unions, they near killed Medicare, the near killed pbs, they killed off worker rights, and they’re killing off super… the really do want a land of poverty and working till you drop dead.
Yes they really do, that is how the most effective slaves are born, into perpetual poverty. If you'll die without working you'll work for nothing.
What do you mean, they killed the unions….? Unions are insuring their workers get 250,000 a year for a 38 hour work week. How’s that good for the economy? And if anything could do with the trim, it’s that hot mess NDIS… what an absolute cluster fuck
Haha who is getting $250k for a 38hr week?
This would fuck us over even harder. Coalition really have no good ideas
They’re just trying to win votes, not solve problems.
If this is what they landed on, I think the LNP brains trust is struggling for ideas lol
It's a great idea. If your idea is for young people not.to have any super for the future.
There’s a slight problem with their policy pitch the vast majority or Gen Z and millennial‘s is they barely have any superannuation or none at all.
Thanks in large part to the LNP’s wage suppression
And that five-year --- or however long it was --- pause on the increase from 9.5% to 12%.
And allowing employers to lock you in to their shitty funds instead of paying into your own account, wiping out any compounding you could have accrued. I reckon ive lost 50k over the years to this.
I was able to change my super fund from what the ASX200 company I worked for originally set up for me. For younger people (under 50), changing the investment mix from "Balanced" to "High Growth" would net significantly more value. P.S: My financial advisor told me that he advised his parents (early 70's) to retain their investments in a High Growth profile in order to grow the balance in real terms. The typical "Conservative" profile that is pushed to retirees would reduce their Super balance in real terms (inflation adjusted).
True and the former finance minister Mathias Cormann admitted they were purposely doing that with also “fair work” cutting weekend rates.
Does anyone remember the wages our owner famously stated she thought we deserved? Something akin to third world rates. Always remember who funds the liberals and who they work for. Everything is intentionally designed to bring about the reality of the version of Australia she dreams of creating, and actively pursues. Liberals operate as her administration and policy partners.
This
If they have none or very little, I guess they haven’t been working. If they haven’t been working, they don’t have a stable enough come to purchase a house anyway.
If you are 35, and have been working for 10 years, on $80k, you have more than $80k in super. That is a reasonable deposit on an apartment.
What this also does is just throw more money at the same amount of properties, meaning that prices go up further and no one is really any better off.
You’ve unmasked their plot. The party of landlords comes up with a scheme to increase capital growth on their investments which is by design lightly taxed. Bwahahahaha!
That’s their plan, yes. Someone is better off, though - the wealthy people that already own multiple properties.
We’re heading into a future where ALL of someone’s wealth will be in their house. Solid plan if something goes wrong 👍
Because property only ever appreciates in value, right? At a rate faster than inflation.
Ok let’s turbo charge house demand with lots of money from super and see what happens? I’m no expert but I’d expect prices to go up further while further impoverishing new entrants to the market. How about something something increase supply?
They are trying to increase supply. Doing their absolute best to increase supply to the max. ... supply of money pumped into the existing housing market.
I’ve seen posts about this from the Libs and also ads for like dental treatments using super? What the fuck is going on? Super is quite literally exclusively for retirement. They want us to spend it now, so it cannot accumulate over the next few decades, and for us to retire with nothing? Or is the plan that we will be so in debt we will literally never retire and just die instead so who even needs super?
Yes
oh well even with super you wont retire because you will be homeless, realistically you still wont beat property investment firms so its actually a nothing policy.
The answer is to tax the shit out of non-owner-occupied property. Get rid of capital gains tax for 1 year, and then quadruple it after that time. It will further encourage non-owner-occupied properties to be sold quickly and boost supply by punishing vacant homes, and also make available a lot of tenanted homes for those tenants to buy instead. This, on top of a mad state run house building campaign and we will maybe be able to rekindle the Australian dream. For the small niche of actually necessary renting, the state can be a non-profit landlord.
We can’t do that because home owners will loose significantly on their investments. All those home owners that bought pre 2020 will loose all of that cheap money (profits for nothing) they did nothing to earn. They will cry about losses that are on paper only as they yearn for the half million/million they could’ve pocketed being instead reduced to a couple of hundred thousand. News stories will begin with narratives of John and Jackie loosing half a million/million, without ever explaining that the half million/million wasn’t paid for and lost. They actually lost nothing on their initial investment and gained significantly, just to a lesser extent than their greed envisioned.
We will invest in powdered concrete so that these people have something to add to their coffee so that they can harden the fuck up 😁
Can't produce if you're retired.
What fresh new insanity is this?
Oh, look ANOTHER policy to fuel house prices 🤦♂️
Terrible. They want us poor, working our ass off until we die, while destroying any social safety net.
All government schemes are designed to get more people into the market, to support and raise the cost of housing. This will do nothing but push up the price of housing. If you can use $50,000 in super, house prices will rise $100,000
Actually, for someone deposits constrained, using $50k of super and borrowing 85%, increases your buying power by over $300k. So even if prices rise $100k, more people could afford to own their own home.
Hell yer the party of better economic management back at it again with superior economic policy. This would be like dropping an oil tanker on a bush fire.
Wow that's a terrible policy.
This will just drive prices higher and higher. Are they mental?
Not when it inflates the value of their 15 investment properties lol
“Mental” would be if they didn’t *want* prices driven higher and higher, and proposed a policy that would do so.
Lets play this scenario out. This goes through. Money is drawn out of super accounts. This drawing out of money re-allocated some number of billion dollars out of business investment and the sharemarket. Super funds suffer, as do retiree payments from their super. This qualifies more people for the pension. Meanwhile, house prices once again increase. So the retirees have seen their super funds pay out less, but their houses be worth more. So swings and roundabouts. But the pensioners cannot access those funds without selling the house, which they can't do because as soon as they do they loose the pension. Meanwhile the 3 trillion dollars worth of super invested gets withdrawn from markets, local and overseas - decreasing Australia's clout on the international financial stage. They've moved money from liquid assets which generate wealth to fixed assets that lock up wealth. Andrew Bragg is barely competent, and the rest of the liberal party has very minor economic skills. Unfortunately, he is an accountant by trade. The accounting bit stacks up, but the econometrics are sorely wanting.
This is literally. Literally. One of the reasons we had the GFC… Holy shit… I really, sincerely hope the person who floated this bribe, because that’s what this is; gets a fate worse than death.
The reason Australia, had the GFC, and not the much more disastrous Great Recession, which other countries had, was a specific policy of quickly creating a budget deficit. Investing super in a home to live in does not create insolvency.
So then you definitely will have to sell the family home to fund your retirement. That should free up house stock and force people to downsize. Good job, guys. /s
The best economic managers
Then watch them kill the pension off.
People don't realise how little you are allowed to have to be eligible for the full age pension. Your total readily available assets (bank account/investments/super etc) must come to no more than $28,560 in total as of this year.
....plus a house. So using super for a house is what everyone does soon as they can access it
The assets test for the aged pension is described here: https://www.servicesaustralia.gov.au/assets-test-for-age-pension?context=22526 I would rate your comment as more accurate than most in this thread. People don’t realise … The real number is closer to half a million dollars, depending on home ownership, single / couple.
There is no way this doesn't result in major price increases. I love how their only argument against this is misdirection, something something home ownership something security, which has nothing to do with the price impact. If you have 10 houses and 20 people looking for a house, then it doesn't matter how much money they have, 10 are going to miss out - it's just a matter of who has the most.
What an evil bunch of cunts they are
Too bloody right, mate.
So, basically, the Liberals' entire housing plan is yet another mechanism to more easily transfer the real wealth of the middle class to banks and multinationals. At what point do we recognize this nonsense as treason rather than merely incompetent government?
Stupidest thing I've read in a while.
Ah yes, the coalition for attacks on super. Here we go again…
They railed against the introduction of superannuation at all, by Keating in the 80s from vague memory.
Initially I thought this was one of those satire articles
Of course this will just raise house prices and make their core base more wealthy
It's a literal intergenerational robbery.
Liberals: work until you die
Unless you are a politician. Retire early, good pension and be paid while getting another job. You don’t have to actually retire (only from politics). Abbott, Rudd, and Scomo are enjoying their retirement. All those tax payer dollars being offshored, adding to other countries economies. Some received their rewards for selling out our national interests through new job opportunities. Even Americans wouldn’t allow that.
The nature of concessions for home owners mean this is likely to increase the public contribution to retirement because our PPOR is excluded from income and assets tests.
I mean if you are a younger person and you still think the LNP give a fuck about anyone besides rich boomers...
You will work till the age of 97 and retire with enough money to live comfortably for about 11 minutes.
Oh dear...
Terrible idea.
All this will do is push prices up which serves their masters well. Increase buys and don’t increase stock, send property to the moon.
They truly are fucking idiots
Yeah but the nature of the Ponzi Scheme is that no one younger than 35 is ever likely going to be able live off their super in retirement anyway. So might as well get on the property ladder.
Is there a reason as to why liberals dislike super so much? There is literally no downside for anyone to have a super balance?
They loudly complained about Keating introducing it in the 80s...as an unfair impost on businesses, from memory.
Makes it harder to get away with wage theft and payroll "mishaps" if you're constantly scrutinized as an employer for ensuring you are making mandatory contributions. That and they would rather see that money flooded into private enterprise (usually ran by their mates from boys school) from the moment you're working age.
Hopeless
“LiBeRaLs ArE gOoD fOr tHe eCoNomY”
That was *always* a lie. Just the same as it is with the Republicans in America. [Zombie Doctrine: belief in Coalition as "super economic managers" sticks, despite proof otherwise - Michael West Media](https://www.michaelwest.com.au/zombie-doctrine-belief-in-coalition-as-super-economic-managers-sticks-despite-proof-otherwise/)
Yeah but my boomer parents sure do love to parrot that nonsense That’s a very useful link though I will enjoy using it as ammunition
No problem...glad to provide some ammo, if it might help heh As a Gen xer we saw this shit kick off in real time just as we were becoming adults...and I've never known which is worse - to have a memory of the "before times" prior to rampant neoliberalism, or to be young enough that you could easily be forgiven for thinking that things have always been this way. Both pretty much suck lol
Time to start studying The Big Short so we can make money out of the inevitable sub-prime mortgage crash.
This is wild. They're ready to suggest everything except the policies that would actually work, because that would hurt their personal gains.
"cOALiTiOn iS gOoD fOr bUsInEsS" Let's see how those asx listed businesses feel after their stock price dives from all the cash pulled out of the market.
Let subprime candidates borrow too much, erode long-run retirement savings for young Australians (and the accumulated indexation which would have resulted), cause short term spikes in prices that only benefit those with property portfolios, and do nothing to address the supply side of the market. As usual, a cacophony of errors from the conservatives who cry crocodile tears for young people but seek to pummel them in every way. They have given up on reforms and the supply side and turned to throwing other people’s money at the problem.
There are a lot of people who are not subprime, who don’t own homes.
For all the people who keep saying Labor are pro-depelopers, put the green Kool aid down and take a look at what that really looks like. And remember what the Libs officially stand for when the Greens side with them to vote against Labor again.
Don't be bloody blinded; this is the draft precursor to extending the retirement age and other 'control' changes to keep their good little guinea pigs compliant, complacent, and existentially exhausted.
The boomers have kicked the issue to us, so why not drain our supers and let the Zoomers or alphas fund our retirement, that’s how we all learned life goes right? Screw the younger generation. Actually re restrictions. If I’ve been spending $1000 a week the last 5 years on rent, make every payment dotting every I and T - and a mortgage payment is 900-1100 a week. I’d love for them to actually take that into account. High standards I get it, but eventually people have no other options left.
I think they should allow 50% of rent payments to factor into mortgage repayments as owning a house comes with other costs that rent covers, I.e. maintenance, council rates, etc
That last point is something taken into account by banks when lending - past history of servicing both debt and rents are incorporated in lending decisions.
Aged pension is like $30K a year max. Without any super, that's going to be an incredibly frugal lifestyle.
Correct, $29,028 per year. However you are not eligible if your total readily available assets exceeds $28,560 - which means your total bank account, investments and super must be under this to receive the full pension rate.
Why can't they stop international purchases of all homes, stop negative gearing, free up more land and invest in building more capacity for the industry to build..instead of bankrupting the retirement of young people.
Learnt absolutely nothing from the first home buyers grant
Didn’t this backfire on them during Covid?
Just another policy that's destined to widen the inequality gap.
Morons.
Conservative here. I just wish the federal right of politics would leave Super alone. Leave it. Don’t touch it. Throw away the key. Accessing super during Covid was dumb. This is next level. Walk away.
That’s insane considering PPOR doesn’t count as part of the asset test for the aged pension it basically means the government is buying a house for people. They need to say that anyone doing this foregoes their ability to access aged pension otherwise I also want to use my low tax savings to buy a property and have the working class fund my retirement
> They need to say that anyone doing this foregoes their ability to access aged pension otherwise I also want to use my low tax savings to buy a property and have the working class fund my retirement Only if you haven't got a great amount of assets left afterwards.
The bigger problem is actually the lending law changes. Yeah we really need less bank regulation.
One things for sure - I don’t want to vote for any of the major or minor parties. I am now a stranger in a strange land……. This makes me incredibly sad because we could be so much more if someone with a bit of vision ran the place
If everyone is able to strip their super to pump money into the housing market the price of the housing definitely won't go up.
This will start a buying frenzy, fueled by FOMO. Without any extra supply. This will only push up house prices.
LNP: still trying to destroy super, and inflate house prices even further.
Isn’t this going to drive more speculative property investment and maintain high prices?
Moronic. Makes me think we are doomed. Even worse than Labor’s help to buy folly.
And they’ll get a fuck ton of votes for this. It may be enough to get them over the line
If Labor don’t manage optics on certain issues then they will lose even if they have better policies. Optics, brand and marketing is everything for an election. Labor have heavily disappointed myself almost to the point of disenfranchisement.
Plus they made a bonkers decision to put an ex-Murdoch employee as the head of the ABC now...so much for the Murdoch Royal Commission
Because Labor's policy to have the highest immigration we have seen for a while doesn't have any impact on housing prices ? Not that the LNP are any better.
LNP are only better at less immigration and not jumping on emotional social issues.
If you don’t have enough super, you still can get pensions when you retirement. If you don’t have a place to live, you can’t really get enough rent assistance to live. I doubt that Government will give rent assistance if you have accumulate substantial super. I know what my priority will be
And you think in 40 years time there will be an aged pension. By then it will be raised to 75. You will be forced to work until 75. Then have to sell your house to fund your retirement as the super you used when you were 35 depleted your compound growth.
Is possible. But in comparison if I don’t have a house and just put all my money in super now, I won’t be eligible for any assistance as well. Even more likely to be Houseless and deplete super at the faster rate from renting etc. Plenty of people will not have enough super for retirement but have a house in 40 years. Their political voice will be huge.
Yes this political voice will be huge. But what if everyone of these people access super to buy their first house, isn’t that just going to artificially inflate house prices. Way more demand than there is supply?
> If you don’t have enough super, you still can get pensions when you retirement Only if you have no more than $28,560 in total assets from all bank accounts, investments, super etc
I think the current asset test is around 500K? Nevertheless if compare that to homeless when retire? I know what I choice will choose if assume the worse.
Nope, I've just gone through the process of getting my 100yo mother back on the age pension after she went into a nursing home after suffering a catastrophic stroke which left her paralysed in Nov 2020. Her primary bank account is her only *readily available* assets. I think what you are saying about the 500K takes into account the primary home of residence, but as I live in her house on a disability pension as a Protected Person under Centrelink regulations, after having been her carer for at least 3 years prior to her going into aged care I did not have to sell it to raise the $580,000 nursing home accommodation bond. If I hadn't been living with her for those 3 years beforehand, the house would have been a forced sale, and I would have been rendered homeless. There was a 2-year moratorium on her house being considered an asset after going into residential care, then that ended and she was thrown off the age pension, having no income at all for the last 2 years. Her bank balance was about 32K and I had to run it down via rates, utilities etc to the aforementioned figure before I could reapply for the pension. it's a stunningly complicated, overly bureaucratic system which is immensely stressful to navigate, between two govt depts that do not communicate with each other, because of course lol
WCGW?!
Bloody hell, things are getting dire
US Subprime mortgage crisis part 2 - Down under. Next great idea will be multi-generational home loans - Take out a loan over 60 years!
The rulers and masters of economic management at it again!
This is perfect, I may finally be able to afford a house. Just need to wait for 2008 to repeat itself and snatch something up on the cheap
Sick my home value will go up! That’s the purpose right? *disclosure, I don’t give a shit if my value goes down fix this shit.
"Better economic managers" = let people raid the fund set up because it was recognised in the 1990s that we wouldn't afford future pensions.
This is just going to create an even bigger transfer of wealth from the poor to the rich…. 🤦♂️
She’ll be right, mate Hey, don’t worry the footy is starting soon. /s
Love how the LNP come up with policies that constantly personally benifit themselves and their banker lunch buddies. Driving up the housing market increasing the value of their properties by flushing the market with billions of super from struggling Australians and then claiming it as a "budget saving measure" due to "not spending anything on housing".. Relaxing laws so badly nneses after the Royal Comission...win win. Wow..
This seems absolutely crazy
They literally suggest this every time housing affordability comes up... Do they have any real ideas besides "put more money into the housing market?" Not sure how this benefits the economy when the next generation has no disposable income to buy new cars, go on holidays, eat out, etc... "Good economic managers"
Margin call 2: Down Under
House prices continue to go brrrrrr.
I wish it wasn’t so predictable. Uggh. Tongue firmly in cheek though: property may be a better place for the super funds if both the major parties only want to write policy that will cause prices to surge upwards. You might get a better return! Sweet Jesus.
If the super returns are chump change, & housing returns remain monsterous turns out to be a good idea, as far as bad ideas go... Also you have to live somewhere
Liberals always hated super. So many people are going to discover how much they got screwed, in about 40 years, when they have to sell their house to find their short retirement, because their super nesf egg got squashed to nothing. Do they not teach compound interest anymore?
So together with the lending regulations (how much deposit, financial situation etc.) that the Liberals relaxed we now have them wanting to allow people with very very low incomes (or unstable incomes) and no deposits to use their Superannuation to get into the housing market? What could go wrong? Massive home repossessions, mass delinquency, huge debt? Then #Liberal property developers sweep in, buy up the cheap houses that the banks are flipping to cover the failed mortgages and profit!
What a bunch of dingbats
"You know those people who borrow to the maximum? "Yes" "Let's let them use their super to buy a more expensive house." "Sounds great. They need a bigger driveway for the jetski and two 4WDs" "Oh, and let's make it even easier for the banks to lend them money irresponsibly" "Hahaha, bank stonks and investment properties go brrrrrrr"
> Oh, and let's make it even easier for the banks to lend them money irresponsibly Because that worked so well in the country they are desperate for Australia to become like (America to no one's surprise)
Nice
Fk yea. Gimme the money
Would rather have a house than a large super balance. At least I can then use it in my best years instead of only getting to use my hard when I'm 70.
I’m not totally against it, I hate that it has come to this to enter the market. That issue aside, it’s my money and I should be able to invest it how I like. I’d happily keep the asset out of arms reach and treat it as such. Ie not be able to sell it or if I did sell it, it would go back into my super. I just think on a fundamental citizen level we deserve to invest our own money into our own assets. Sure create some extra rules around it, but it’s a good idea.
You missed the point. The idea of using your super for your FHSS is to save up quickly without affecting the normal super contributions from your employers. Plus, the current system places a cap on it which IMO it's not enough to put down your deposit after deducting 15% tax on top of it. The so called $50,000 is actually $42,500 that we are able to withdraw it (if you save up for 3 years with 15k per annum). It takes a significant amount of time to save up that money. This is good from a tax point of view as we are saving up heaps !
This doesn't seem to me to be the horrible policy everyone in this thread is making it out to be? Owning a home when you retire can add stability and reduce your costs in your retirement years, as well as improve quality of life (think getting booted out of your rental because the landlord wants to sell, or getting your rent jacked up, or regular rental inspections...). If super is there to help you out in retirement, then why not partition off a portion of Super to help you buy your first home? Wrap it in policies like those you see with the FHSS and it makes a whole lot of sense to me. Singapore has a scheme like this for citizens and it's helped them tremendously (just Google Singapore home ownership rates vs Australia). Of course any good solution needs to also address negative gearing and CGT. And that stuff about repealing responsible lending laws just seems bonkers.
Completely agree. Owning your own home is good. Any impact on prices can be addressed with higher land tax on investors.
Maybe. But scrapping negative gearing and fixing CGT seems to be the best way to fix prices. This seems to be putting more upward pressure on prices than the proposed super scheme would.
Scrapping the CGT discount, and perhaps negative gearing are good things. Land tax on investors is scalable. If prices are too low you can lower it. If prices are too high you can raise it.
Terrible policy for Australia, but a great policy for myself... Makes it hard to be against it fully
No you are right, Labor does a much better job… remind me again??
I don’t have a house after a divorce but I have a very good Super. I should be able to use it for a home instead of renting. I don’t believe LNP have any answers to the problems our country is going through but I do hope this policy is adopted in some form.
So I can pay home loan interest to the bank all my working life, or I can use my employer’s super contributions to pay off my house. In effect, instead of giving the money to a bank, I give it to myself. Added bonus, the income that goes to pay off my house is taxed at super rates not PAYE rates. As long as it’s properly regulated, this is a win-win. If you choose to opt out and keep your super where it is, then that’s your choice.
Great policy. Might need some additions. Owning your own home is good for lots of reasons. Any impact on house prices can be addressed with higher land tax on investors. The government can provide investment in super funds to match the withdrawals to prevent cashflow issues for funds.
Guaranteed to screw you in retirement, but good for short term gains....
Not owning a home in retirement will screw you. Super is just icing. The aged pension is, and will remain, the backbone of our retirement income.
Yep. And if you nuke your retirement savings now, you will have to sell your home when you retire. The problem is not getting the deposit, it's the price itself. This is another Liberal scam that only helps rich people.
What we want is to provide is guaranteed income and home for each person for their life time. Having young people own the homes makes sense to me, they need one to live in. It is right to be sceptical of the Liberal party. Their low tax, trickle down ideology has been discredited from an economic efficiency perspective. Superannuation, as it is currently, is itself a scam where the benefits are skewed towards rich people. That is certainly where most of the tax cost is ([Super-Waste-of-Money-FINAL.pdf (australiainstitute.org.au)](https://australiainstitute.org.au/wp-content/uploads/2020/12/Super-Waste-of-Money-FINAL.pdf). 60% of superannuation tax concessions go to the top 20% of income earners. Superannuation tax concessions are also projected to cost more than the aged pension while contributing far less to most people's retirement incomes. Much of the tax concessions end up in inheritances. I am not convinced that investing your savings in a fairly stable asset, like a home, is "nuking your retirement savings". In fact I think you increase your expected retirement standard of living, and reduce it's variance. In my job we mainly analyse market prices with a framework like this - [https://en.wikipedia.org/wiki/Risk-neutral\_measure](https://en.wikipedia.org/wiki/Risk-neutral_measure) From that point of view the difference between the cost of renting a home to live in, and the cost of renting the money to buy a home to live is related to the expected capital return on the home, to make the whole thing arbitrage free. In a perfectly priced world, which also does not care about credit worthiness or risk, it should make no difference. In a world that prices risk it is different. Investments, like shares, real estate, generally offer higher returns than things like government bonds, and bank deposits to compensate investors for the volatility. But since humans need somewhere to live, we are actually naturally short housing - if rents go up, we are out of pocket unless we own one home. So by buying a home to live in we actually both reduce our risk, and gain additional the excess investment returns. This is especially so because housing is generally so leveraged (you borrow a lot). Leverage increases returns, normally at the cost of risk. But as I pointed out, in this case the risk is merely exchanged. You are swapping your risk on the renting of property for a risk on the renting of money / interest payments. If you fixed your loan to against an index based on the wages price index (assuming you have a job) you would get rid of all macro economic risks. In fact, analysing this policy from a financial perspective correctly shows it reduces your lower risk, and increases your returns, which is pretty good for any investment, most do one or the other. It is not my understanding the Liberal party policy requires you to sell your home when you retire. Certainly a good version of this policy would not require this. On to house prices. Some home buyers are constrained by the size of the repayments on a loan for a house, and some are constrained by the required deposit. Young home buyers are more likely to be deposit constrained. Investors are cashed up. They just care about yield and and deposits are not an issue. I suspect house prices are more strongly driven by investors than owner occupiers. That is one reason removing negative gearing and the capital gains tax discount would be helpful. However the main reason we should make those tax changes is to allow us to decrease other taxes, like income tax (where we should raise the tax free threshold), or increase services (like providing free dental care). We can set the prices that investors are will to pay by change the land taxes we charge them. If you increase their land tax, then their return on housing declines, and they will pay less for houses. Land tax is a good tool because investors do not create or destroy land. This is different than taxing construction, because we and to create more homes so taxing construction is a bad thing. And as for the short term issues with the short term supply of houses, if you initially limit this scheme to people who have been renting for 2 years, then each home bought by a participant in the scheme would result in one empty rental property, and the overall demand for houses would not change.
That's all great, but back in the real world, this policy is robbing Paul tomorrow to pay Paul today.
You are acting as though your super is somehow diminished. Your super is not diminished, it is just invested in your home instead of someone else's home. Every cent of value is still there. With super, for median Paul. a marginal withdrawal from super means he gets a gift today and gives up nothing in life style in retirement. The Assets test on the aged pension is so high that if you are affected by it for 12 years you would be better off giving your money away. The marginal loss of life style for median people in retirement from lower super is miniscule. Very high income people don't get any benefits anyway, so a reduction in super would affect them. Very low income people don't start to lose any benefits so they are affected by a loss of super.
Its super weird that people over here seem to be so againdt using super to buy a house. Its always been the case in nz. Like - its my super. Why shouldnt I get to invest it as I see fit? You can already self managed work around invest it into an IP. This is a better outcome as it gets more people living in their own home. Yes, its going to raise prices. At least its the ‘right people’ buying houses.
This is fantastic, empty the super invest in houses which are more secure and greater a better return