Submission to the Senate Standing Committees on Economics

Blueprint Institute welcomes the opportunity to provide a submission to the Senate Standing Committees on Economics regarding improving consumer experiences, choice, and outcomes in Australia’s retirement system.

Home ownership today remains out of reach for many Australians. This submission investigates the idea of enabling Australians to access mandatory superannuation contributions to buy their first property.

Our analysis indicates that permitting withdrawals of mandatory superannuation payments for the purposes of purchasing a home would substantially broaden access to the housing market for 25-44 year olds at different income levels, allowing several hundred thousand more people to be able to, in theory, afford their first home purchase. However the reality of insufficient dwelling stock severely constrains the actual number of people who could benefit from these changes. We estimate that demand for low-cost housing (priced around $300,00-$500,000) under the new scheme would outstrip supply four to one. 

The scheme enables couples aged 25-44 on median incomes to purchase a first home under the scheme. Singles, however, are still constrained by income, even when granted access to mandatory superannuation contributions.

We recommend that, contingent on addressing supply side issues, first time home buyers should be permitted to access their mandatory superannuation contributions, which should be repaid to their superannuation prior to retirement. Implementing a repayment mechanism for withdrawals would preserve participant’s superannuation savings in the long run whilst enabling home ownership earlier. 

Independent of these recommendations, we also suggest that the existing First Home Super Saver Scheme annual and total withdrawal caps be abolished and that withdrawals under the scheme be simplified.

Our full submission is attached