Coalition’s Super Home Buyer Scheme benefits property developers, not the young
In the final week of the election campaign, the Coalition has proposed the Super Home Buyer Scheme, which would allow first home buyers to invest up to 40% of their superannuation (up to $50,000) to assist with the purchase of their first home.
This policy proposal is a bad idea for young people. It relies on half-truths, and shows how the little policy on offer to them during this election could in fact be detrimental to their futures.
It reveals a further erosion in the social contract the Australian government should be protecting and working in the interests of young people.
The logic of this social contract was simple and accessible to many. It went something like this: Study hard to get a post-school qualification, secure desirable work, obtain a home, then maybe have kids.
The basis of this logic has since dissolved into myth. Policy neglect and short-termism could relegate the myth to distant memory.
Let's break down that logic and how lack of cohesive policy neglects building pathways to the future in areas such as education, housing and families.
Firstly, the notion that qualifications will lead to better, secure and, most importantly, desirable work has been steadily eroding in recent decades. Working life is less secure, and young people need more and different kinds of qualifications to navigate it.
Secondly, the housing market is hostile to many first home buyers. Young people's ownership rates have been declining for decades, with falls in the past decade reportedly comparable to those in the mid-to-late 1980s and early ’90s.
Thirdly, attitudes to families are changing, with little policy reflecting this change. When we surveyed more than 500 Australians aged 18-24, we found nearly a quarter (24%) were pessimistic about having children in the future.
Morrison said:
“We want to further help Australians get past what is the biggest hurdle on their path to home ownership, [which] is the difficulty of saving for a deposit. And being able to use their own money to do it.”
This is half-truth.
It is their own money, but this policy will effectively take away investment in their futures so young people can attempt to gain secure housing now.
Who would really benefit from this policy?
It’s no coincidence that the housing industry has welcomed the move. It will also potentially be good for banks and current investors in the property market.
Sure, policies like the Super Home Buyer Scheme have been adopted in countries such as Canada, as the Prime Minister suggests, but that doesn't make the policy right. That country, too, is experiencing growing inequality and declining housing and rental affordability.
In fact, one Canadian researcher suggests that:“Young homeowners are the worst off due to easier access to mortgage loans and slow income improvement, representing a new form of housing vulnerability.”
Those who will benefit from this scheme want young people's money now, even if it means mortgaging young people’s future.
Finally, consider these factors. In the short to mid-term, with rising interest rates, almost 300,000 mortgage borrowers might be at serious risk of default.
We also have an ageing population whose care in retirement will need to be serviced.
We have mind-boggling government debt, which reached $787.7 billion in 2020-21, that will have to be paid for generations to come.
We have a higher education system savaged by lack of government support during the pandemic, losing an estimated 40,000 staff in 12 months.
We have a fragmented and dysfunctional vocational education and training system.
Add to this the prospect that young people could now eat into up to 40% of their superannuation to buy a house in a hostile housing market with rising interest rates. The capacity to service a mortgage is inhibited by glacial increases in wage increases.
These factors are all connected. What will they look like in the future without a long-term, national cohesive policy plan?
In this election campaign, the major parties have shown us none.
