12 May 2024

Coalition's super housing plan is a first home owners grant on steroids: Don't fall for it

| Ian Bushnell
Join the conversation
LJ Hooker auction

The hopeful gather for an auction. Raiding nest eggs would push up prices and undermine the superannuation system and the budget. Photo: LJ Hooker.

I have every sympathy for young people staring at the implacable cliff face of home prices and mortgage repayments who may be tempted by the prospect of raiding their superannuation nest egg to get a foot on the housing ladder.

If it got back into government, the Coalition would unlock these savings for first-home buyers, and those desperate to leave the soaring rental market could see it as their only chance.

Such is where Australia’s housing market has landed after decades of policy failure, mostly at the hands of Coalition governments, that shamelessly fed the bubble that shows no signs of bursting.

READ ALSO Rents are surging again: see the highs and lows across the ACT’s suburbs

Now, it is promoting a first homeowners grant on steroids to prise open the door for people locked out of the market it helped to create.

A Coalition-dominated Senate committee this week recommended that first-time home buyers be able to withdraw their entire super balance for a deposit, capped at $100,000 or $150,000.

This would expand the Coalition’s 2022 policy, allowing super withdrawals of up to $50,000.

But there are plenty of people saying this is a bad idea

Like the first-home owners grant, allowing people to use part of, or clean out their savings would put another fire under house prices. While some whose savings might cover the cost of a deposit would skip through, the door would soon slam shut again as prices surged.

Super Members Council modelling found that letting first-time home buyers access up to $50,000 could cause price rises of between $69,000 and $86,000 in the major capital cities of Sydney, Melbourne, Brisbane and Perth.

You can bet Canberra would not be left out.

Deloitte has also modelled the impact of cracking the super piggy bank, finding this would blow a hole of up to $2.5 billion a year in the federal budget by the end of the decade, rising to $15 billion a year by the mid-2060s, when the cumulative cost of the policy would be $200 billion.

Its work for the Super Members Council released last week found a 30-year-old couple who withdrew $35,000 each from their super could retire with about $195,000 less in today’s dollars.

They could be expected to receive $3270 more a year from the aged pension, costing $88,400 to the budget over their lifetime.

Many young people won’t care – they’d argue they need it now, not in their dotage.

They might also argue that it is more important for them to be secure in their own homes than to be short on their super when they retire.

However, the Coalition’s plan would only be a temporary fix for some and would fail to address the underlying problems in the market.

It also undermines the very principle of superannuation, which is designed to provide dignity in retirement and reduce the dependence on the age pension.

An idea like this could blow up the whole system, and maybe that’s at the back of the Coalition’s mind anyhow, given their antipathy towards industry-based super funds and their connections with unions.

READ ALSO North Curtin will be denser than Singapore with no facilities, warns residents association

The nation would be better served if the superannuation funds’ investments were directed towards building affordable and social housing that would put a roof over the heads of the increasing number of Australians paying exorbitant rents and/or at risk of homelessness, as long as they could achieve a return for their members.

This boost to supply would provide relief to the market in general and help ease price pressures.

Tempting as it may be for some, the Coalition’s opportunistic and economically irresponsible policy should be dismissed.

Join the conversation

All Comments
  • All Comments
  • Website Comments

Both the Coalition and Labor politicians have self-interest in pushing property prices high and higher. Even the Reserve Bank had its hands tied when an increase of rates is required, resulting in persistent high inflation.

The future of Australia becoming a banana republic is fast drawing near.

Except that even bananas won’t be cheap here.

Incidental Tourist10:28 pm 13 May 24

Directing superannuation to “social housing” amounts to tax on super accounts. The purpose of super is to deliver some retirement support to those who built it. Directing super to personal house deposits will end up in house price growth but also in more house owners. Yes homeless people need houses. But it is not a purpose of superannuation to run charity. “Investment” in social, community and public housing has neither yield no benefit to investor. It is a form of tax or charity. It will have devastating impact on superannuation balances. These social housing “investments” will not yield any profit. Everybody will see their super accounts going backward. The more you have super and the longer you keep it the more you loose. How will these super “investments” in social houses be traded to retirement pension? It is like trading Salvation Army (read Tax liability) shares on stock exchange which have guaranteed negative value. Who will buy them if they guarantee loses? This crazy policy of directing super to social and community housing will deliver equal misery to everybody. I can’t help recalling Churchill’s words that capitalism is uneven distribution of wealth and communism is equal distribution of misery.

Let there be no mistake, the LNPs objective here is to 1) push up prices, and 2) weaken superannuation as a means to weaken Labor. The land and housing you can’t afford are in effect the financial assets of the LNP and their rent seeking donors. If you are not bidding up their asset values, then the LNP’s message to you is: stop being poor / spend more.

HiddenDragon8:45 pm 13 May 24

A target of returning home ownership levels to where they were a generation, or two, ago – and all the subsidiary policies which would work towards that – could be a compelling election policy platform.

In that context, (very) early access to superannuation balances might make some sense, particularly if balanced by other policies which reduce the competition faced by first home buyers, but as what currently looks like a standalone policy, or possibly the centrepiece of a fairly unambitious suite of housing policies, the idea does seem flaky and short-sighted.

GrumpyGrandpa7:00 pm 13 May 24

Drawing money out of Super for housing purchases is simply idiotic.

Firstly, increasing demand by cashing up more buyers will push prices higher, but secondly, drawing money out of Super results in smaller Super balances at retirement putting more demand on the Old Age Pension. With an aging population, putting extra pressure on the Budget is a disaster waiting to happen.

But it not just the Liberal Party who own the stupid ideas. The ALP have been bringing in record numbers of immigrants at a time when we have a housing crisis. Crickey, without the higher intake of immigrants, our housing crisis mightn’t have got bad enough for the Libs to come up with a stupid solution?

I am convinced that neither of the majors don’t think beyond the next election cycle. Promise anything to win a vote. I distrust them both.

As for the Greens….give me either of the majors before the Greens!

Keyboard Warrior4:56 pm 13 May 24

All of our own doing; we flood Australia with migrants at numbers well in excess of new home builds, they then bring over their parents, and we then wonder why we have record numbers of homeless.

devils_advocate2:37 pm 13 May 24

Heaven forbid anyone actually try to address the underlying problem of housing affordability.

No let’s just keep redirecting more and more of our wealth towards unprofitable asset speculation

What does the author of this article think about the ACT “governments” success in improving housing affordability? They have after all been inn government for some decades now. Surely that’s enough time to have made inroads on the problem?

Or does the fact they are nominally a Labor Government grant them immunity from criticism?

Releasing super for home purchases is the definition of redirecting more and more of our wealth into asset speculation, and the assets of the young specifically.

Capital Retro1:48 pm 13 May 24

Sounds good to me.

It will cripple the liquidity of the Labor aligned Industry Super Funds like it almost did during COVID when the then coalition government let people draw down their super up to $30K.

These were mainly young people and most of them had their super with an Industry Fund.

So you care more about hurting Industry Super that actually getting people into houses. The house prices will just go up to whatever people can afford with the addition on super, so for most people that will mean the same sized mortgage and also no super.

Capital Retro3:26 pm 13 May 24

But you are happy for the ACTU/Industry Funds to use your money to provide social housing for renters?


Capital Retro asks if people are happy for Super Funds to make for-profit investments in housing that actively benefit their members?

Um, yes, isn’t that exactly what Super is for?

You do also realise that you are free to choose your own Super fund right?

Capital Retro9:42 pm 13 May 24

No, Capital Retro asked areaman but chewy14, the self-appointed expert on all matters has to have his two bob’s worth.

Yes of course, the funds make money and more people in need get houses, how is this not win/win?

@Capital Retro
“These were mainly young people and most of them had their super with an Industry Fund”
Got any facts to support that assertion, CR – or is it your usual fabricated BS? I know many retirees, including myself, who are with industry funds, such as Aus Super, and doing very well with them.

Capital Retro, you didn’t ask anyone, this is a public forum with a reply button.

Why are you against Super funds investing in housing to make profits for their members?

Seems a very weird hill to die on, although not unexpected that you haven’t thought it through.

Capital Retro8:40 am 15 May 24

Too lazy to do your own research again, JS?


Good luck with Aus Super.

Capital Retro8:51 am 15 May 24

You obviously didn’t know this JS but Industry funds have funnelled more than $114m into union coffers since mid-2006, and almost $10m was pocketed before the 2022 election.

You are obviously a rusted on lefty and condone this but a lot of retirees like myself are no longer with Australian Super as a result.

@Capital Retro
I challenged your comment that mainly young people had their super with an Industry Fund.

The article to which you just provided the link is about draw down and has nothing to do with mebership of any type of super fund.

So to exactly what “research” are your referring, CR? Your inability to substantiate your claim simply confirms my comment about your usual fabricated BS.

And thank you for the good wishes on Aus Super. Given industry funds have a proven history of out performing retail funds plus they generally have lower fee structures, I think I’ll continue to do well with Aus Super.

@Capital Retro
“… a lot of retirees like myself are no longer with Australian Super as a result“
Well it doesn’t surprise me that your political ideology would have you foregoing the obvious benefit of industry super funds, CR? You obviously have more money than sense.

“You obviously didn’t know this JS but Industry funds have funnelled more than $114m into union coffers since mid-2006, and almost $10m was pocketed before the 2022 election.”

Wow, sounds a lot. Well unless you actually realise that this only equates to around $6million a year in Australia’s multi trillion dollar Super system and is almost wholly around payment of directors fees.

But you’re right, in that Super funds shouldn’t misuse their members money, which is why the regulator can and does enforce the obligations these funds have.

On average, industry funds have lower fees and make higher returns than non-industry funds.

So you must be horrified at the “management fees” many of these funds are paying themselves to underperform right?

Although it’s funny that in your last sentence you say you moved funds because you didn’t like something about your previous one. Congratulations, now maybe you understand that your choice of Super fund is open and free.

Yes, just flooding a high-demand market with extra cash is a recipe for a bubble, not a solution. But this article’s author, Ian Bushnell, simply reaches for another tired solution: bring back the housing commissions. Great if you believe central planners know best. What Bushnell didn’t mention is that the housing market’s overpricing problems could also be resolved by 1) making tax deductions in mortgage repayments available to first home owners, 2) negative gearing on housing made available only for new housing, and 3) reduce immigration rates — which currently is a Ponzi scheme primarily benefitting the 1%.

Allowing first home owners to claim their mortgage repayments as a tax deduction would just push up the cost of housing because they would have extra cash for loan repayments and would be able to, and forced to in order to have a chance to make a successful bid, offer more at auction. Home owners & builders would just jack up their prices to meet that extra payment capacity. They’d be fools not to. Allowing new negative gearing claims on new properties only would encourage extra housing supply, the absence of which is the cause of the problem. That and the absolutely incompetent housing policy from 10 years of Federal Liberal government.

Bushnell is 100% right here, using Superannuation to fund housing deposits for young people is madness.
It is the exact opposite of what we should be doing, it will only further increase unproductive housing prices and saddle future generations with higher taxation to fund increased pension payments.

Quite possibly the worst policy suggestion possible in this situation.

Agree that Bushnell is 100% correct. Federal Coalition has failed those trying to get a foot in the housing market.

Now if he could also turn his attention to ACT Government inaction that has put a handbrake on land release, rezoning and new construction, he might help better inform readers of the bigger picture of housing affordability in Canberra.

Capital Retro4:17 pm 13 May 24

Bushnell is 100% Labor.

“Many young people won’t care – they’d argue they need it now, not in their dotage.

They might also argue that it is more important for them to be secure in their own homes than to be short on their super when they retire.”

Well yeah… exactly. Who knows if people will even live long enough to retire as retirement age is pushed further and further upwards.

Ask your average 25 year old if they need secure housing now or money potentially in 45 years time when they’re already elderly and quite likely not far out of a nursing home anyway? I think you know the answer.

Another flow on effect is that a number of people that I have known over the years are putting off having children later and later or not at all because they have no security in their housing and don’t feel they can. This could go some way to help our flagging birth rates.

“However, the Coalition’s plan would only be a temporary fix for some and would fail to address the underlying problems in the market.”

Exactly, which is why they have said they will be drastically cutting back on the Labour party’s disastrous, unsustainable immigration levels as well.

I take it you refer to immigration rates lower than at any time since last century, lower than 1950-1972 (I have no figures before 1950) and lower than most the time from 1973-1999. Oh, and most of those 74 years had Liberal-National coalition governments.

Was that what you were trying to say, or were you just bleating on the right of the flock?

I’ve seen you say this a few times over the last week, I’m interested in where your figures are coming from?

Net overseas migration would seem to be the most relevant metric to consider the impact on infrastructure and housing demands.

Figures 1901-2015 I have found here:


The last few years, here:

Looking at this net overseas migration as a proportion of Australia’s population by year, the figures in 2023 are higher than anything seen in that period at around 2% of the population.

2022 would look to be around equal to the 2008 peak, which itself was an outlier. The average since 1950 has been around 0.75% per year. Even since migration programs were expanded in 2007, the average to now is only 1% per year.

What am I missing, genuinely interested. I would have thought post pandemic immigration rates have been very high, which my numbers seem to show.

No problem chewy14. Note that my text above uses the word “rate” and in my first post on it I said more specifically “in proportion to population”.

My source is macrotrends, here: https://www.macrotrends.net/global-metrics/countries/AUS/australia/net-migration

Ten people joining one hundred is different from ten joining a million. Without proportions, no sensible conversation can be had on many subjects and (alluding to some others, not to you) learning is supposed to start in upper primary school with ratios, proportions and percentages.

Chewy14 – You beat me to it. It is positively mystifying to me how people think they can repeatedly post outright lies and not be called out on it given the government posts all the figure on official government sites and regularly releases this information to the public.

Um, Bob, you’re wrong again. See my post just before yours.

My numbers were also already as a proportion of population, which I’ve calculated myself using the net migration numbers and Australia’s population by year sourced from the ABS statistics.

I’ll have to look a bit closer at your link to see where the difference lies.


Fair enough. I used only the one source for the comment.
To be comprehensive, I hope you’re up for covering the last 75 years by hand 🙂

Haha, Excel is a wonderful tool and most databases are exportable these days.

Looking further at the numbers, I have a feeling there may be issues around the definitions of net migration (ie. how or when to include temporary migrants into the overall figures).

The UN data tracks the ABS data reasonably well from 1950 but seems to be averaged over a set period, compared to the raw ABS data. The UN data does seem to lose this correlation from about 2017 though (lower numbers), nor does it seem to include pandemic or post pandemic effects over the last few years.

The last 2 years have had particularly high net migration but this seems to be mainly around temporary migrants whose numbers have increased as well as the length of their stay increasing. It’s yet to be seen whether this is just a blip in the data because if you average the last 4 years (2 pandemic, 2 post pandemic), the overall rate is very similar to the period for 2010-2019. So seems like the last 2 years might simply be catch-up years from pent up demand during the pandemic.

Interesting. I may have time to dig into it a little more myself tomorrow. I was expecting either a timing (base month) or a smoothing issue, if the numbers did not match.

byline – No, I am not. Just because you can find a random site on the internet to support your assertions, doesn’t mean they are somehow more credible than the figures published on multiple official government websites.

These are not even fully up to date figures. We haven’t seen any numbers since the RECORD 125,000 permanent and long-term arrivals that were allowed in, in January this year alone.

We built around 170,000 dwellings nationally last year and then allowed 125,000 into the country in one month. This is complete insanity.

Daily Digest

Want the best Canberra news delivered daily? Every day we package the most popular Riotact stories and send them straight to your inbox. Sign-up now for trusted local news that will never be behind a paywall.

By submitting your email address you are agreeing to Region Group's terms and conditions and privacy policy.