Scott Morrison has made senior homeowners the centerpiece of the federal liberal election launch, promising to allow homebuyers to break into their retirement for home purchases and expanding access to retirement tax concessions for wealthy seniors who sell their properties.
In an acknowledgment that home ownership has become more difficult, Morrison announced what he called a “comprehensive housing plan.” The retirement changes will allow more seniors to direct $300,000 from the sale of a family home to retirement, lowering the age limit to 55. It will also allow seniors to keep the proceeds from home sales for two years without affecting their pension.
Morrison has also adopted a policy – long championed by enemies of retirement within liberal ranks – of allowing retirement access to buy homes: First-time homebuyers will be able to steal their super balances up to $50,000 or 40% of the balance of your account to buy houses. This will inject billions in retirement into the housing market, pushing up home prices significantly.
This means that older wealthy homeowners will enjoy the benefit of higher home sales prices and may have access to more favorable income tax treatment. This would represent a major shift in wealth from the current generation of taxpayers and low-income people to wealthy retirees, and would see first-time homebuyers impoverishing their pensions to fund even richer pensions for aging homeowners.
Morrison made the announcement as the centerpiece of a lengthy speech to launch the liberal federal campaign in Brisbane. Unusually nervous in his speech to a sluggish audience, Morrison devoted much of his 50-minute speech – he ended up apologizing for its length but said “I’m just warming up” – to sprucing up the government’s handling of the pandemic and the economy since 2020
In addition to a cancer center in Brisbane and the promise of building a new generation of drones (unmanned aerial vehicles have been the subject of persistent Defense failures under the Coalition, such as the australian has repeatedly pointed out), the speech was light on new commitments.
While consistent with liberals’ long-term hatred of retirement and their pursuit of anything that would undermine the relentless growth of industry superfunds, the targeting of wealthy seniors suggests that there is genuine alarm in liberal ranks at the defection of traditional liberal voters in well-off urban constituencies. With wealthy older voters in wealthier parts of Sydney and Melbourne defecting to independents, the Liberal operation clearly believes it needs to appeal to their financial interests as much as possible to retain those seats.
For young people and low-income people struggling to buy their own homes, however, the policy will present the illusion of greater affordability that will evaporate as a result of increased competition. As always in Australia, the real winners are the owners.