Need for a Home Super Saver
Federal Labor’s plan for a superannuation-style home savings account for first home buyers has won support from the Housing Industry Association.
Labor’s plan borrows heavily from a proposal by HIA to help thousands of lower and moderate income earners bridge the deposit gap.
HIA’s Managing Director, Ron Silberberg, said superannuation should play a greater role in providing Australians with greater financial security.
Through a Home Super Saver, HIA is proposing that employees who do not already own property would be able to make additional voluntary contributions, which would be deposited into a Home Super Saver account linked to their superannuation fund.
“Savings in the Home Super Saver account would remain untouched for a minimum period of three years which could be withdrawn to peg the mortgage deposit gap,” he said.
Employees could contribute as little as an additional two per cent of earnings to their Home Super Saver Account. For parents wanting to provide some support for their children battling to save a deposit, a direct deposit could also be made to the account.
Ron Silberberg said a 17-year-old apprentice builder on a starting wage of $20,000 and saving four per cent of their wage each year would have more than $30,000 by the age of 26, utilising a Home Super Saver account and the First Home Owners Grant.
Under the scheme a person earning $45,000 a year and saving four per cent would have more than $12,000 after five years which, together with the First Home Owners Grant, would produce a healthy deposit of $19,000.
A couple with a combined income of $100,000 a year and contributing four per cent would, with the First Home Owners Grant, have $33,000 available after just five years.
“Australians should have more of a say and greater flexibility in how their superannuation contributions are invested,” Dr Silberberg said.
“As a nation we should be looking to provide those entering the workforce with real incentives to save and this is a practical measure that will provide some fantastic rewards.”