Australians are withdrawing hundreds of millions of dollars in superannuation to pay their mortgages, but some still fear it won't be enough to stop them losing their homes.
Brendan Coates from the Grattan Institute predicts accessing super early is likely to be a much bigger issue going forward as people struggle to meet their mortgage repayments."The 7 per cent mortgage rates today — what we'll get when the cash rate hits 4 per cent — are the equivalent of the 17 per cent plus mortgage rates that borrowers were paying in the early 1990s."Mr Coates thinks there is a good case for allowing greater access to superannuation before retirement.
He said he would support people being able to cash out of their superannuation, each year, any contributions above 10 per cent of their wages. It is estimated superannuation tax concessions will cost the Australian government $52.5 billion this financial year, according to the Australia Institute. At the moment, earnings from superannuation are taxed at up to 15 per cent — that will increase to 30 per cent for around 80,000 Australians, on the portion of their balance that is over $3 million.Reforms needed but early access to super not advisedThe director of Super Consumers Australia, Xavier O'Halloran, agrees.
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