Contributed by Jim Hayes

Former Labor prime minister Paul Keating has weighed in on the argument over whether superannuation funds should be used to purchase homes. This is something that Malcolm Turnbull and Scott Morrison have been championing for some time and may soon come to a head.

Keating says this is “policy bankruptcy” and the destruction of one of the great community standards. But is it so straight forward?

Superannuation as we know it now came to Australia during Keating’s watch as Australia’s treasurer. Consequently, there is a vested interest in defending it. But superannuation came in as a means, to eventually replace the age pension and this raises a dilemma.

It was once felt that after a lifetime of contribution to society through work, each had earned the right to be looked after by society in our final years. This was turned over and the age pension became a handout that the country could no longer afford. Somehow, older Australians were turned from deserving the recognition of society to be spongers on younger generations.

Sight was lost of the fact that this generation had paid years of taxes and that part of that was supposed to be earmarked for the pension. It was never a handout. Those who are currently in the workforce are paying taxes too. They are also relying on superannuation, because one of the side effects is that superannuation has helped to diminish the value of the pension. It also means that Australians at work are now paying twice for their retirement and this is where the real burden is.

There is logic to the idea that people should have access to their money during that time in their life when they are raising a family and paying off the mortgage. And fair enough if this is all there is to it. The problem is that there is more. The official retirement age has been raised. Medicare and the cost of drugs are likely to rise significantly. Retirement needs to be protected.

If other changes are not put in place, the release of superannuation funds onto the housing market on a large scale will not make the cost of housing more affordable. It will work to increase prices further, by adding to the demand side. It is no answer to the housing affordability problem. But it would be a boon to the real estate industry. Keating is right about this.

A further concern over using superannuation is that the age pension and other services to older Australians are under attack. While it may have been best if Australians had not been forced to pay twice for their retirement, the reality is that it’s here and at least in the foreseeable future, this is not going to change.

Australia needs to raise the age pension beyond the poverty line and this will only happen if there is a mindset that honours contributions made in the past and contributions yet to be made. Older people are not useless burdens, but ongoing contributors to society. If this is understood, caring for retirees will be regarded as an obligation high on the priority list.

Opponents argue that with an aging population, Australia cannot afford to do this. There is no evidence that this is other than a cyclical problem and it is amazing how well answers can be found for a problem that is considered important enough.

If Turnbull’s and Morrison’s comes into effect, it will be the major financial institutions that will benefit from the millions of extra dollars they will be given to invest wherever they like. This is the real intent of the proposal, which really has very little to do with housing affordability.