Thread by @michael_read_

Some thoughts on this policy from an economist-turned-super writer:
1) Super for housing renders some funds’ investment strategies unworkable. More than 50pc of members at Rest & Hostplus are under 35. Funds can’t invest in high-return illiquid assets if they need cash on hand.

Other funds with lots of young members include Future Super (70% under 34), Australian Ethical (47%) and Cbus (41%). They will need ample liquidity available under this policy, meaning they will have to invest in lower-risk, lower-return assets to make it work.

2) This policy comes just after the early access scheme, when funds skewed toward the young were given little notice to come up with billions in cash to pay out to members. It's hard for funds to have a long-term investment strategy if goal posts keep shifting

3) For this reason, if you want to let people use super for housing, it seems more desirable to let people use their super as security so it stays within the super system. Funds would just have to provision for the rare case a person defaulted on their home loan.

4) Young people, on average, don't actually have that much money in super. This policy will improve access for some people, but it probably won't go far for many. 40% of the average 30-34 year old male's super balance is $20,470. For females it's $16,896.

This compares to an average dwelling price in NSW of $1.21 million

5) I don't think that letting people access their super to buy property is necessarily bad. But it seems detrimental if it's implemented in isolation (as is proposed) with no policies to boost supply, which would keep a lid on prices.