‘Craziest idea I’ve heard’: Malcolm Turnbull attacks using superannuation to buy property
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The former prime minister Malcolm Turnbull has said allowing people to withdraw from their retirement savings to help buy a house is “the craziest idea I’ve heard” and lashed politicians for being patronising by denying ordinary Australians an increase in the superannuation rate.
Appearing on Friday at an event organised by Industry Super Australia, Turnbull also took aim at “really poor arguments” against raising the super contribution rate from the current 9.5% that have been advanced by what he called “former colleagues of mine for whom I have respect and affection”.
The Victorian backbencher Tim Wilson has campaigned for super to be cracked open so that people can buy houses under the slogan “home first, super second”, promising Australians they will have “a better life and a better retirement”.
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But Turnbull said Australia had a housing affordability problem and allowing money to flow out of super accounts and into the property market would make it worse.
“Diverting even more savings into housing is simply just going to bid up the price of housing,” he said. “I mean, that is, honestly, that’s the worst possible argument.”
The rate at which employers contribute to super is legislated to increase from 9.5% to 10% in July this year, before rising to 12% by 2025, but Wilson and other backbenchers have campaigned against the increase.
They have claimed that super increases come out of wages, a claim that is supported by some economists but disputed by others and dismissed by the former prime minister Paul Keating, who introduced compulsory superannuation in 1992.
“Politicians and public servants have a compulsory 15.4% super contribution that was determined, presumably a very long time ago, because it was felt that that was an appropriate level to provide sufficient savings for retirement,” Turnbull said.
“So isn’t it somewhat at odds, somewhat patronising, for people who benefit from 15.4% super, to say that working people should be, should you know settle for nine and a half?”
Industry Super Australia’s event marked the launch of a report the body commissioned from the economists Acil Allen on the effect of increasing the super guarantee rate as planned on the Australian economy.
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Acil Allen said increasing the rate would increase GDP by about $12bn a year by 2040.
“Contrary to much of what has been said in the public debate on the rise in the SG [superannuation guarantee] rate, apart from a very small and very short-lived effect, there is no trade-off between higher superannuation contributions and higher wages,” it said in the report.
“In fact, an increase in the SG rate, because it will lead to more capital accumulation and a bigger economy, will lead to higher real wages.”