Meg's Musings - April 2025

As many others have said already, by announcing the date of the next Federal Election (3 May 2025), the Government has effectively called time on all legislation not yet passed by Parliament. This includes the contentious Division 296 tax, which was still caught in the Senate at the time the election was called. That said, the revenue from this tax is still in the Federal Budget, with income due to flow from 2026/27. That suggests the ALP would seek “something like this” if returned and the Coalition will need to find “something to generate that revenue” if they win instead. 

All in all, it’s unlikely that super will feature much in the campaigning but we’ve nonetheless provided a summary of the major parties’ views on our part of the world in one of our articles this month. 

If super does feature at all, I suspect it will be as a bit player in the broader debate on one of the top issues – housing affordability. The Coalition would like to expand access to super to help people buy their first home while the ALP would not. If you thought it was already possible to access super to buy a first home you’re right – we already have the First Home Super Savers Scheme. A challenge under that scheme, though, is that it only allows access to up to $50,000 of “voluntary” contributions, not the core of most people’s super (the amount built up from their compulsory employer contributions - Super Guarantee contributions). Since people saving for a first home often haven’t added to their super voluntarily, access is limited. That said, over 13,000 payments were made under this scheme in 2023/24. We don’t have a lot of detail on the Coalitions’ ideas (other than some they released back in 2022 before the last election), but it would seem they favour access to up to $50,000 (capped at 40% of the total balance) of all super, not just the voluntary amounts. 

The argument against widening the scheme, of course, is that it basically encourages people to steal from their own future security in retirement to fund their housing today. Those against it would say we should solve the housing crisis differently and leave retirement savings alone. The argument for widening the scheme is that one of the most important factors in having a financially secure retirement is to own your home. So, releasing super to fund this is entirely consistent with focussing on retirement. 

Whatever your persuasion, I certainly hope the major parties have more up their sleeves than super to fix housing. 

On a more uplifting note, April often feels like a paradox to me. The plethora of public holidays often inspires all of us who worked over summer to take some leave and enjoy a break. But it’s also the final month before the 15 May deadline for lodging SMSF annual returns. Nothing brings down a holiday high better than a deadline. Whatever your focus, I hope you enjoy this month’s edition of Heffron Highlights.