Independent economist Saul Eslake has issued a stark warning about the Coalition’s proposal to allow Australians to use their superannuation for housing deposits, predicting it could worsen the housing affordability crisis. A report by Corinna Economic Advisory, commissioned by the Super Members Council, indicates that such a policy would inflate house prices, reduce retirement incomes, and potentially impose a long-term burden on the national budget.
Eslake’s analysis suggests that a long-standing pattern of demand-side policies aimed at helping Australians purchase homes has historically backfired, resulting in higher property prices. He believes that allowing access to superannuation for home deposits would be the most harmful of these measures.
The proposal, dubbed the ‘Super Home Buyer Scheme,’ would let individuals withdraw up to 40% of their super savings, capped at $50,000, for use towards a deposit. Eslake argues that while it might appear to help buyers in the short term, it would ultimately drive prices even higher.
“We’ve seen over 60 years that any policy allowing Australians to pay more for housing inevitably leads to more expensive homes, not more homeowners,” Eslake noted. “This one would be the worst of them all. If enacted, it could rank among the poorest public policy decisions in the last six decades.”
The report also draws on evidence from New Zealand’s KiwiSaver scheme, which allows early withdrawal for home deposits. According to the report, KiwiSaver has not improved home ownership rates; instead, it has coincided with rising property prices and a 5.7% decline in home ownership for people in their early 30s.
Eslake points out that the Australian scheme would similarly favour wealthier, older buyers who can already afford to enter the market, leaving younger Australians struggling. For example, a median couple in their 40s and 50s could access enough super to add $400,000 to their purchasing power, while younger buyers in the 25-34 bracket would only see around $90,000 in additional purchasing power.
“The scheme wouldn’t help those who need it most,” Eslake said. “It would only exacerbate existing inequalities, with younger Australians bearing the brunt.”
The report also warns that using super for housing would lead to lower retirement balances, forcing more people to rely on the age pension. Additionally, it could place further strain on government resources in the long run.
Eslake stresses that instead of focusing on demand-side solutions, the real answer lies in boosting the housing supply—especially for affordable housing.
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