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Withdrawing super for first home a very good investment, says Bernie Fraser

“In my view … the long-term return of owning a house rather than having to be renting one would outweigh the return of even a good performing super fund,” he said. Mr Fraser has fronted advertisements for Industry Super Australia in the past and is a former director of several large industry super funds.


He said there should be limits on the amount that could be withdrawn for a deposit but was not convinced there would be so much demand it would lead to a surge in property prices.

“It wouldn’t be anything like those kinds of pressures [such as capital gains tax benefits and negative gearing] on house prices which are there now and are very real and are part of the reason why it’s so difficult for people on more modest means to even contemplate the prospect of owning a house these days,” he said.

“I just think, particularly as house prices are going up and rent prices are going up, the opportunity for some modest-income people to have a house would be a very good investment.”

But Mr Rudd criticised proponents of such a scheme as “right-wing ideologues” who wanted to hollow out retirement savings, not make housing more affordable. He said withdrawing $30,000 at age 35 for a home could leave a worker $400,000 worse off in retirement.

“It’s also fiscally reckless. This would push up house prices, drain national savings, put pressure on Australia’s credit rating and force more Australians onto the age pension,” Mr Rudd said.

Former prime minister Paul Keating on Monday evening also warned about deleterious effects on super balances from withdrawing funds earlier than planned.

“Compulsion and preservation are the two keys. That is not draining the bath,” Mr Keating said on ABC’s 7.30.

“That is, not taking money out for housing deposits, not taking money out for education or health but leaving it in there to compound for retirement income.” Mr Keating did not respond to request for comment from this masthead on Monday morning.

As house prices are going up … the opportunity for some modest-income people to have a house would be a very good investment.

Bernie Fraser

Financial Services Council chief executive Sally Loane agreed home ownership helped ensure financial security in retirement but did not support using super to buy property.

She said “this may be counterproductive and further inflate house prices” and would “simply mask the underlying cause of unaffordability”.

Association of Superannuation Funds of Australia chief executive Martin Fahy said it was dangerous to conflate superannuation payments with affordability challenges in the housing market.


“The housing affordability issue is really, unfortunately, a result of a failure of successive governments to address well-documented supply-side issues,” Mr Fahy said.

Industry Super Australia chief executive Bernie Dean agreed.

“If you make super voluntary or allow people to tap into it for a house deposit – you just increase demand and jack up house prices, pushing the dream of home ownership further away for many Australians and forcing others to take on massive mortgages,” Mr Dean said.

Minister for Housing and Assistant Treasurer Michael Sukkar said in 2014 letting people access super to buy housing would increase demand and drive up prices, but later said doing so alongside increased housing supply measures could work.

Mr Sukkar said existing schemes helped with home ownership, including a first-home superannuation saving program that lets prospective buyers voluntarily contribute extra into their super to take advantage of tax concessions and later withdraw funds for a deposit.

Job-boosting programs aimed at stimulating housing construction have been a focus of the federal government through the coronavirus-induced recession. The First Home Loan Deposit Scheme, which helps first-home buyers get into the property market with as little as a 5 per cent deposit, was doubled this year to allow an extra 10,000 applicants for new homes. HomeBuilder grants worth $25,000 for new properties or substantial renovations were “designed to help even more Australians get into a home of their own”, Mr Sukkar said.

A joint statement from Labor housing spokesman Jason Clare and superannuation spokesman Stephen Jones said accessing super for a housing deposit would “push prices up” and leave people retiring with less.

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