Recent Question/Assignment

MBS686 Economics and Business Strategy
An Application of Basic Economics Concepts to Home Ownership and Superannuation
Using the following press release as a starting point show how the economics concepts can be applied to a contemporary economics issue.
Harnessing super to realise the Australian dream of home ownership
The great Australian dream of home ownership will be unlocked sooner for thousands of first home buyers who will now be able to harness their superannuation to get into the property market.
Under the Super Home Buyer Scheme, first home buyers will be able to invest up to 40 per cent of their superannuation, up to a maximum of $50,000 to help with the purchase of their first home.
It will mean Australians can buy their first home sooner by slashing the time taken to save a deposit by three years, on average.
The scheme will apply to both new and existing homes with the invested amount to be returned to their superannuation fund when the house is sold, including a share of any capital gain.
This means that a person’s super is harnessed to purchase a first home while also protecting their long-term savings plan for retirement.
Prime Minister Scott Morrison said supporting first home buyers was a key part of the Morrison Government’s Plan.
“Our Plan for the future is focused on supporting more Australians to realise their dream of home ownership,” the Prime Minister said.
“Super should be harnessed to support the aspiration of many thousands of families who want to buy a home.
“Our Plan makes it easier for first home buyers to save for a deposit, reducing the time people need to pay rent, and also means a smaller mortgage with less debt and smaller repayments.
“It’s a Plan that gets the balance right – it utilises money that’s currently locked away to transform a family’s life, with the money then responsibly returned to the super fund at the time of home’s sale.”
Assistant Treasurer and Minister for Housing Michael Sukkar said the Super Home Buyer Scheme would be a gamechanger for aspirational Australians and provide hope and opportunity to first home buyers.
“The Liberal and National Government are fundamentally committed to helping more Australians achieve their dream of home ownership,” Minister Sukkar said.
“By allowing people to access their super and buy a house, we are providing the opportunity to turn that dream of home ownership a reality.
“Allowing your super to work for you to purchase your first home and then being returned to your super at a later date achieves the best of both worlds - home ownership and retirement security.”
Minister for Superannuation Jane Hume said this is a two for one win for Australians - a home and a return on retirement savings.
“Under the Super Home Buyer Scheme you keep building your super savings - in the home you live in. When you sell, the amount you invested is returned to your super - plus a share of any capital gain,” Minister Hume said.
“It gets the balance right, helping first home buyers break into the market but protecting their retirement savings.
“The Liberals know it’s Australians’ money, not the super funds’ and not the governments. Australians work hard to earn it. They work hard to save it. One dollar in $10 of everything they earn is saved in super right now.
“Superannuation is there to help Australians in their retirement, and the Super Home Buyer Scheme will ensure Australians can use those savings they are responsibly building up to improve their quality of life now and standard of living in retirement.”
The Super Home Buyer Scheme will start by 1 July 2023.
There are no income or property caps under the Super Home Buyer Scheme with eligibility restricted to first homebuyers who must have separately saved five per cent of the deposit.
Over the last three years, the Morrison Government’s housing policies have supported more than 300,000 Australians into home ownership.
Only the Coalition Government has a comprehensive plan to help Australians realise the dream of home ownership.
Under the Liberal and Nationals plan, the Home Guarantee Scheme will next year help 50,000 Australians into a home, including 10,000 places for new homes in regional Australia and the First Home Super Saver Scheme is already helping Australians make voluntary savings to put towards their first home.

The following economics concepts may be considered in your analyses:
• Choice
• Good bundles
• Budget constraint
• Preferences
• Supply and Demand
• Opportunity Cost
• Indifference curves
• Consumer equilibrium
• Marginal rates of substitution
• Axiom
• Externalities
In your analyses consider, for example, ranking of the importance of these concepts to the present problem, measurement issues associated with the concepts, and intemporal stability or variation with the concepts e.g., preferences, budget constraints. It is not necessary to consider all the economics concepts, but their exclusion needs to be justified.
Develop logical and coherent responses to the issues raised above. The opinions or decisions that are presented should be supported by references to appropriate texts, articles, websites, and current economic practices. It is recommended that at least five (5) more articles be reviewed.
The following lists of deadline and requirements should be adhered to. Failure to do so will result in a lower grade on the project.
The paper should
• be typed and double spaced;
• flow as a well documented coherent, committee paper;
• cite all sources;
• have correct formats for the bibliography, footnotes, and references;
• have on the first page of the paper, the title of the paper, the author’s names; and
• have an executive summary.
Quality is the most appropriate determinant of the grade awarded but it is suggested that approximately 2,000 words be a suitable length.
Dr Dominic Gasbarro
18 May 2022