Turnbull still believes superannuation for housing is a ‘thoroughly bad idea’

Australian Prime Minister Malcolm Turnbull reacts as he speaks during an official function for the Liberal Party during the Australian general election in Sydney, Australia, July 3, 2016. Reuters/David Gray

Australian Prime Minister Malcolm Turnbull supposedly discouraged some members of the government to permit the young ones utilise their superannuation to make a home purchase. He opted to join the budget debate on his last day of visit to India by saying he stood by his previous remarks that allowing people to use their super to get into the property market is a “thoroughly bad idea.”

The Federal government is likely to launch a housing affordability package next month, but there are different views on how to help within the coalition. One of the proposals was to allow first-time homebuyers to make use of some of their super to supplement other savings and help pay for the expenses of house deposit. However, opponents argue that it would drive up prices while diminishing the long-term superannuation savings of young people.

In 2015, the Australian leader stressed the dangers of utilising super to buy into the property market. He addressed the same issue on Thursday, insisting that he will not contribute to it. “Standing here in Mumbai I won't contribute to it, although I've expressed fairly strong views about it in the past,” thewest.com.au has quoted him saying.

Government MPs obtained data from AMP Capital on Thursday, arguing against allowing super get into the housing market. The move was perceived as an ineffective policy that would hurt the Budget as people are not able to recover the amount lost from their accounts. Meanwhile, data from the tax office indicates that the number of people that claim negative gearing deductions against five properties rose 10 percent between 2012-13 and 2014-15.

Defence Industry Minister Christopher Pyne and Immigration Minister Peter Dutton have also expressed disagreement, lining up with the Australian leader, Finance Minister Mathias Cormann and Revenue Minister Kelly O'Dwyer. Meanwhile, shadow treasurer Chris Bowen argued that the Turnbull government was gripped by "dysfunction and chaos at the heart of the Turnbull government's economic policy.” Bowen forecasted that one of two things might occur- it would either be a bad policy would be chosen or the Treasurer will be rolled again.

Cabinets minister Matt Canavan and MPs Ian Goodenough and George Christensen are okay with the proposal. In an interview on Sky News, Canavan explained that there are specific reasons why people would be against the proposal or would be for it. He recognised that it was not a "magic bullet" and that "there are a number of things you can do" to help people struggling to purchase their first home, Sydney Morning Herald reported.