Call to scrap First Home Saver Accounts and let Gen Y use super for deposit
Tuesday, 04 October 2011
A leading economist has called for a rethink of superannuation, suggesting that people in their 20's and 30's shouldn't be struggling to save a deposit for their first home while also contributing to their super.
Lateral Economics chief Nicholas Gruen told the recent tax forum in Canberra that as we increase super above 9%, we should allow Gen Y to use their superannuation savings as a deposit for a house. He argued this would be better than what he called the "Mickey Mouse system we have at the moment, which is a separate fund" - namely the first home saver account scheme.
Another prominent economist, Saul Eslake of the Grattan Institute however pointed to other solutions to the housing affordability issue, saying the tax system was "riddled" with loopholes, singling out the $4.5 billion paid each year to well off investors via negative gearing.
"There are now 1.7 million of them and they vote, which is why that subject is off the agenda for both major political parties," Mr Eslake told the forum. "There is no country in the world that allows negative gearing as generously as the Australian tax system does."
Lateral Economics chief Nicholas Gruen told the recent tax forum in Canberra that as we increase super above 9%, we should allow Gen Y to use their superannuation savings as a deposit for a house. He argued this would be better than what he called the "Mickey Mouse system we have at the moment, which is a separate fund" - namely the first home saver account scheme.
Another prominent economist, Saul Eslake of the Grattan Institute however pointed to other solutions to the housing affordability issue, saying the tax system was "riddled" with loopholes, singling out the $4.5 billion paid each year to well off investors via negative gearing.
"There are now 1.7 million of them and they vote, which is why that subject is off the agenda for both major political parties," Mr Eslake told the forum. "There is no country in the world that allows negative gearing as generously as the Australian tax system does."
What do you think - does negative gearing just reward wealthy investors?
Should the Government allow first home buyers to access their super for a deposit?
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