The Government's Obsession With Early Super Withdrawals

As 2023 draws to a close, the government of the day is proving that like its political opposition, it has no real solution to the housing crisis.

Housing prices are soaring and rents are rising, there has to be a solution. 

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The Bandaid Solution

Liberal MP and Senator for New South Wales, Andrew Bragg has proposed a controversial plan which would allow property buyers to offset their home loans with their superannuation.

So What Does This Mean? 

Essentially, Senator Bragg is proposing that home borrowers shift their superannuation balance into mortgage offset accounts. 

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What Is An Offset Account? 

To truly understand the sheer lunacy of this proposal, one has to understand what exactly an offset account is. 

Simply put, an offset account is an everyday account that is connected to a homebuyer's home loan. 

Deposits can be made from the homebuyer's salary/savings into the offset account, therefore the balance is then offset against the amount that was initially owed. 

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For example: 

If a homebuyer takes out a loan of $400,000, they can deposit $10,000 into the offset account and therefore interest is paid on only $390,000. As long as the $10,000 is not removed from the account. 

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The Government’s Obsession With Super 

Both the Labor and Liberal governments have an obsession with super dating back to 2020, during the COVID-19 Pandemic.

During the COVID era, the Liberal Federal Government under Scott Morrison proposed an early release scheme to combat the economic impact of COVID-19. 

Close to $36 billion was withdrawn from Super accounts with up to $1 billion reportedly withdrawn under false pretences. 

The Labor Government continued the bandaid solution by continuing the First Home Super Saver Scheme. 

This scheme allows homebuyers to withdraw their voluntary super contributions to help buy their first home. 

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Raymond’s Thoughts

Allowing individuals to access their superannuation to reduce their living expenses prior to retirement is an irrational proposal.

Superannuation supports individuals in retirement, to cover their daily expenses at that time of their lives.

By allowing individuals to access their super prior to retirement, will ensure that retirement will be tougher, a time that should be made easier due to superannuation.

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The Solution

The housing crisis is undoubtedly here to stay unless real action is taken. 

Instead of stripping superannuation accounts bare, the solution is simple. 

SMSF property investment in brand new house and land builds!

SMSF investors are the catalyst needed to solve this housing crisis and this can be done by establishing an SMSF and investing super into high-yield properties.

Get in touch with our team today to begin your journey!