Paul Keating blasts proposed changes to superannuation

Paul Keating has called a plan to allow superannuation to buy housing as ‘scandalous’.

The former Prime Minster told Fairfax Media it would drive up prices, would permanently gut retirement nest eggs for the under 40s and would compromise the optimal investment profiles of the super funds themselves.

Sydney Morning Herald reported he has linked what he called the “policy bankruptcy” of the idea with the Coalition’s treatment of Medicare, calling the programs the two great community standards that the Liberal Party “has done everything in its power to either thwart or destroy”.

Writing exclusively for Fairfax Media, Mr Keating said as an economic idea, this was scandalous.

“But, of course, for the Liberal Party, this is an ideological proposal,” he said.

“You don’t expect conservative parties to believe in much, but you do expect them to believe in thrift.  

“And when a Labor government comes along and, in a co-operative way, encourages the workforce to save for their retirement, you would think any true conservative party would be eternally grateful.

“Instead the Liberal Party, limited by its ideological snakiness, continues biting at superannuation, as it does, periodically, Medicare.”

While the government is yet to determine its final position, some backbenchers believe accessing wealth locked up in superannuation could solve a worsening housing affordability gap, the Sydney Morning Herald reported.

Last week Assistant Treasurer Michael Sukkar made a case for allowing first homebuyers to access their superannuation, saying it could work so long as it was part of a broader package which increased housing supply.

Mr Sukkar, working on the government’s housing affordability package for the May 9 budget, agreed with comments made by Finance Minister Mathias Cormann in 2014 that the super option in isolation would only drive up house prices because it would pump more liquidity in the market.

While not confirming if the super option would be in the budget, Mr Sukkar said, it could work so long as supply was also increased, reports the Financial Review, 

“Anything you do on the demand side of the ledger..will be finely calibrated to make sure we are not lazily pumping more money into the market,” he said.

“We’ve got to be a bit more sophisticated about it and I’m confident we will be.”

What plans do you have for your superannuation?