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Monday, 30 May 1994
Page: 878


Senator FERGUSON (6.54 p.m.) —I rise to speak briefly on this 12th report of the Senate Select Committee on Superannuation. In doing so it is wise to recognise that it is the 12th report. This committee has spent a long time looking at the many vexed questions that relate to superannuation and the way in which the structure of superannuation can be used to the best benefit of all Australians.

  I do not always agree with my colleague Senator Chris Evans but I tend to agree with the conclusions reached by this committee. There was a genuine feeling amongst those of us on the committee that we should come to a conclusion that would most benefit Australians while taking advantage of the current structure of superannuation policies. I am not sure that hastily arranged pre-election promises from any party are a good basis for policy when it comes to deciding the best for future retirees.

  There was compelling evidence from some witnesses that superannuation should not be allowed to be used for housing. I am thinking particularly of evidence given to us by Professor John Piggott of the Superannuation Economics Research Group, University of New South Wales. He has appeared before the committee on a number of occasions and the committee has taken great notice of what he has had to say because he has spent a lot of time looking into the question of what is the best form of superannuation for Australians. It is fair to say that he did not recommend using superannuation for housing. However, a number of other people appeared before the committee and we took all their evidence into consideration.

  We should never forget that the prime purpose of superannuation is the provision of retirement income. One of the downfalls of the system is that people do not think of superannuation as retirement income but as a form of pension, and different connotations apply. If people were to think of superannuation as retirement income, the future interests of Australians would be better catered for. After all, retirement income is there to provide for us when we no longer have the capacity to earn an income.

  The recommendation is that the government give further consideration to the adoption of a highly targeted superannuation for housing policy. It does not say that the government should adopt this policy; it just says that the government should give further consideration to it. I hope that the government will do that because from all the evidence that we received, both written and oral, there was compelling evidence that a certain highly targeted group of people should have access to these funds to help provide the capital required for a deposit on a house.

  As Senator Chris Evans said, the difficulty is that those people who might benefit the most—those on very low incomes—are the ones least likely to be able ever to afford a house because they will never have the accumulated funds from which to borrow to provide the deposit. While that is a different problem, it is important for the government to look into the situation to see if it is possible for a group of people to benefit by accessing a part of their superannuation in order to maintain a house.

  Owning your own house is the great Australian dream. In many other countries people know that they will never own their own house but in Australia it has always been the tradition that the vast majority will at some stage own their own home. It is almost considered their right. It is a right if people are able to do it, but having the money to do it is another thing.

   We were given evidence that perhaps the superannuation industry itself is not particularly geared to lending for housing. Of course, it depends on the way that the policy may be formulated. That is another issue that needs to be addressed.

  Before the last election it was part of the coalition's policy to have a tax-free saving scheme. Professor Piggott suggested a more modest form of the same proposal where people are permitted to save out of net of tax income, but not pay any tax on the interest that accrues to those savings until they have purchased their first home. Once the money has been used as a deposit on the first home that right goes away. That would help to remove some of the inequities that Professor Piggott mentioned.

  We normally compare ourselves with countries such as Canada, the United Kingdom, the United States and continental Europe. Most of those countries do not have a provision to withdraw pension funds or superannuation funds for housing purchases. Switzerland was the only country that we were made aware of that explicitly mentions housing. Switzerland has a scheme quite like our superannuation guarantee scheme, except that it is supported by a modest social security system. On retirement Switzerland permits the withdrawal of a portion of superannuation benefit as a lump sum for owner-occupied housing purchases.

  This committee is trying to address the problem of the finding of the deposit for the initial purchase. This is something that many people, particularly those on low and middle incomes, find so difficult to do.

  The committee did not come to its conclusions without a lot of consideration and hearing a lot of evidence. We probably had as broad a range of evidence as it was possible to get, ranging from those who were totally opposed to the use of superannuation money for housing to those who felt that it was the only way that some people would be able to access housing and that it was a right and proper use of superannuation moneys.

  Taking all that evidence into account, the committee unanimously came up with this report. I think that indicates that the feeling of the committee was that, whatever we did, we wanted to make sure that we did what we thought was best for Australians; to enable as many Australians as possible to own their own home—something that is becoming a dream rather than a reality. I commend the report and I hope that the government will, at some stage in the future, give consideration to adopting a highly targeted superannuation for housing policy.