Superannuation is a key issue amid Australia’s housing affordability crisis. With soaring property prices and rising living costs, home ownership dreams feel increasingly distant for many Australians.
This frustration has heightened scrutiny of policy proposals to ease access to home ownership, sparking intense debate. Against this backdrop, Opposition Leader Peter Dutton’s latest proposal to allow first-home buyers to withdraw up to $50,000 from their superannuation has sparked significant backlash.
A new poll indicates that a staggering three-quarters of Australians oppose the idea. The proposal, a key feature of the Liberal Party’s campaign launch, aimed to provide a new avenue for Australians to break into the increasingly elusive housing market.
‘We will allow Australians to access up to $50,000 of their super towards a deposit for their first home. Your super is your money—not the government’s,’ Dutton declared.
However, the reception has been less than enthusiastic, with many Australians concerned about the long-term implications for retirement savings and the potential exacerbation of already soaring house prices.
A survey conducted by the housing welfare group Everybody’s Home shed light on the public’s sentiment, revealing that 75.68 per cent of respondents are against allowing Australians to withdraw from compulsory employer super contributions for housing.
Maiy Azize, the report’s author, warned that the policy could further inflame the housing affordability crisis by driving up prices, echoing the concerns of economists and housing advocates alike.
Saul Eslake, the principal of Corinna Economic Advisory, has been vocal in his criticism.
‘The idea that you can take up to 40 per cent of your superannuation savings – up to a maximum of $50,000—and put that towards the purchase of a home, will inevitably result in people taking out bigger mortgages than they otherwise would,’ Eslake said.
‘This will result in higher house prices, which will be to the benefit of those who already own homes and the disadvantage of those who don’t.’
The survey also highlighted that many Australians are ‘extremely concerned’ or ‘very concerned’ about the policy.
Respondents indicated that it fails to address the root causes of the affordability crisis. Instead of providing a genuine solution, it could inject more money into an already overheated market.
In contrast to the Liberal Party’s approach, the Opposition has proposed additional measures, such as allowing first home buyers to claim interest repayments on tax for properties up to $650,000, provided certain conditions are met.
Once approved for the tax deduction program, it will be accessible for individuals with incomes up to $175,000 and couples with a joint income of $250,000.
According to Opposition housing spokesman Michael Sukkar, this initiative is designed to help renters transition to homeownership.
‘We know there are a couple of really big challenges for first-home buyers—they can’t service a mortgage and therefore they can’t get finance; and the deposit hurdle is too high,’ Sukkar said.
‘Our plan is the only plan that seeks to address both and not by providing them a grant but by giving them some of their own tax back.’
Meanwhile, the Labor government, led by Prime Minister Anthony Albanese, has introduced its policies to support first-time home buyers, including the possibility of securing a mortgage with a mere 5 per cent deposit.
The debate over housing affordability and superannuation is not new. Eslake, a former federal president of the Young Liberals, pointed out that first home buyer grants have inflated house prices since the 1960s, with little to show in solving the underlying issues.
‘We have 60 years of evidence that shows that anything that allows Australians to spend more on housing than they’d be able to results in more expensive housing and a small proportion of the population owning it,’ he said.
‘And this is just another example of the sort of policies that, far from solving the housing problems we’ve had for a long time, have actually made them worse.’
However, the Everybody’s Home survey was not a scientific poll. The housing welfare lobby group acknowledged that the 740 responses came from ‘supporters of the Everybody’s Home campaign,’ indicating a biased sample focused on housing affordability.
Nevertheless, the strong opposition it uncovered cannot be ignored. Australians cannot access compulsory employer super contributions to buy a first home.
However, this is set to change, with the superannuation guarantee increasing from 11.5 per cent to 12 per cent on 1 July. The First Home Super Saver Scheme allows first-home buyers to make voluntary contributions for this purpose.
How do you feel about the proposed changes to superannuation? What solutions do you believe would best address the housing affordability crisis? We invite you to share your thoughts and experiences in the comments below.
Also read: Expert reveals how Dutton’s latest energy plan might skyrocket your gas bills
Superannuation should not be used for other purposes.
Obtaining additional funds just provides more money to increase house prices.
It would not help young people anyway. They wouldn’t have sufficient funds in super to be able to take an amount which would make a difference.
The smaller amounts in superannuation are there to build on for the future.
If home ownership is important to young people perhaps they could consider a modest property, in another more affordable area (regional) to get into the property market.
I totally agree with you, Judy. Superannuation was put in place to help to live a better life in retirement, and to ease the social security burden on governments to pay pensions. We as workers had to go years with restrictions on pay rises to help pay for super contributions. It should be made clearer how much you could lose in the long run, if you take out money from your super. I do not know what we would have done if we had not had super. We would probably have had to downgrade and sell our family home to be able to live reasonably now. Please think ahead what it will mean for your and your families futures if you take funds out of you super
This will exacerbate an already seemingly unsolvabale problem. It’s a well known fact , that when a government starts making it easier for couples to buy a house, greedy R.E. agents encourage vendors to increase the price of their property and join the greed gravy train.. How this mess started, I can’t recall. This problem didn’t happen when we paid 14.25% interest rate mortgage in the 1970s . Remember when it went uip to 17% ! We were fortunate to be able to hang in there, but many went to the wall, with reposessions occuring widely. I think Tte low low interest rate sparked this problem off. We used to live in Deception Bay Qld. We left there in 2019 and moved to Tassie. within 15 months, our old house price rose by 72%. Others around that area also jumped up highly. If that isn’t greed, what is.
I agree FrankC. Back in the 17% interest rate era most of us did not have a mega mansion, huge TV screens, mobile phone, overseas holidays, buy now pay later plans and even credit cards were not common, and the list goes on. We saved like mad and got our second hand homes and upgraded when salaries and savings improved. We lived within our means.
“This will be approved for indivduals with an ioncome of $175,000.” Surely if they;re earning that much ( “or two of them combined $250,000 “), they should be able to save for a deposit.