Liberals consider more ways for superannuation to help home buyers as fight over housing policy heats up

The Liberals are considering letting first-homebuyers use their superannuation to offset interest on their mortgages and boosting how much money could be withdrawn for home deposits as the fight over housing policy heats up. The ideas build on the Opposition’s existing policy, first announced during the 2022 election, to allow those trying to break into the market to withdraw up to $50,000 from superannuation for a house deposit, with the amount to be returned to the retirement fund once the property is sold. Housing is shaping up as a key battleground in the next Federal election as voters feel the pinch from rising rents and mortgages and young people increasingly fear they will never get into the property market. Even King Charles joined in the discussion about the housing crisis and construction skills shortages as he met apprentices at a housing project in inner-city Sydney. “I think there’s something wrong with our system when young people have given up the dream of home ownership,” Opposition Leader Peter Dutton said on Tuesday. He announced at the weekend a $5 billion plan to build roads and utilities, which he says will unlock an extra 500,000 greenfield development sites that are ready to go but for this infrastructure. He’s promised more to come on the housing front as the shadow cabinet develops its suite of policy offerings. The suggestion of using superannuation as an offset account has been discussed, two Liberal sources told The West. The idea is that it would mean people accrue less interest on their mortgages and thus pay them off faster. The party is also looking at increasing the $50,000 or 40 per cent threshold for withdrawals from superannuation. Shadow assistant minister for home ownership Andrew Bragg said they were worthy of debate. “I like the idea of allowing people to make their own choices about their own money. This idea would give people more choice and agency,” he told The West. He leads a committee that last month recommended the Government explore how to design a superannuation mortgage offset scheme. Both suggestions are likely to attract strident pushback from the superannuation industry and the Government. Labor senator Jess Walsh wrote in a dissenting report that the mortgage offset idea was a massive risk, unworkable and “would not help a single person to buy their first home, nor would it result in a single new home being built”. The Super Members Council pointed to analysis showing that someone using $37,500 in superannuation would save $44,600 in interest payments on a $637,500 home loan. But the same amount of money in a superannuation investment account would increase to $328,311 over the 30-year typical loan lifetime. Major bank NAB used a submission to a separate committee inquiry to say the policy intent was good but the complexities of using superannuation as collateral “present several challenges” including what would happen if the buyer defaulted on their loan. Meanwhile, Housing Minister Clare O’Neil labelled stamp duty a “bad tax” after a Business Council of Australia report called for States and Territories to scrap it as part of a policy overhaul to boost housing supply. “It prevents people from moving around the housing market in the way that suits them best, and it creates cost for everyone who’s selling or buying a home. It is a bad tax,” Ms O’Neil said. BCA chief executive Bran Black welcomed the minister’s backing, saying dumping stamp duty in favour of broad-based land taxes would go a long way to boosting home ownership and lifting productivity.