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Finance Investment, Political

Super for a house could cost taxpayers $1 trillion

Super Members Council 3 mins read

New modelling shows a push for young Australians to raid all their super for a house deposit could cost taxpayers a cumulative $1 trillion1.

And a policy to encourage super withdrawals capped at $50,000 could still create a $300 billion cost to federal coffers across coming decades.

The modelling – commissioned by the Super Members Council - shows pension costs climb exponentially as first home buyers start to retire with far less super in the coming decades and are forced to rely more heavily on the taxpayer-funded age pension.

To meet the rising Budget costs, future Governments may have to increase taxes or cut services to offset the extra fiscal pressure created by the bigger age pension outlays.

At its peak, the capped super for a house policy could cost taxpayers an extra $8 billion per year, while the latest push to uncap it would cost taxpayers an extra $25 billion a year.

Previous Super Members Council modelling also shows the policy would simply raise capital city house prices by $75,000 – forcing future generations of young Australians to wait even longer to buy.

Super Members Council CEO Misha Schubert said a growing body of expert evidence showed the policy would not lift home ownership rates – it would only make housing affordability worse while eroding retirement savings and leaving all Australians a tax bill.  

“It’s economically reckless. It sets a policy trap for young Australians because it hikes house prices and blows a Budget blackhole in the decades ahead mostly by pushing up age pension costs – which every taxpayer would pay,” she said.  

“Ideas to break the seal on super just leave people with less savings in retirement and a bigger bill for all taxpayers.”

“We all desperately want more Australians to own their own home, but this idea won’t achieve that. It’s unfair to lump the next generations of Australians with a policy that would only make the housing affordability crisis worse by driving up house prices.”

“We urge a sensible rethink on any policy ideas that undermine the strength and success of super to continue to deliver for all Australians in retirement.” 

All credible economists confirm that a push to raid super for house deposits – whether capped or uncapped would just drive-up house prices - overheating the inflated housing market and pushing the dream of home ownership further away. 

The modelling – completed by Deloitte - is based on a rigorous microsimulation model accounting for population change, super contributions and balances, tax and pension expenditures.

It finds a capped super for a house deposit policy risks:

  • costing the Budget more than $300 billion by the end of the century and $40 billion cumulatively by 2060 - mostly due to the rising age pension bill but also a loss of tax revenue on super earnings
  • adding an extra $320 million a year in costs to the Budget by 2030, more than $3 billion per year at 2060, and peaking at an extra $8 billion a year.

The latest uncapped super for a house deposit policy push risks:

  • costing taxpayers around $1 trillion by the end of the century and a cumulative extra $200 billion by 2060
  • adding an extra $2.5 billion a year to the Budget by 2030, $15 billion per year by the mid-2060s, and peaking at $25 billion a year towards the end of the century.  

SMC analysis predicts the current capped policy proposal would unleash a massive price hike that would push up prices by 9% or $75,000 for median house in Australia’s major capital cities. An uncapped scheme would set off an even bigger property price hike and cost future taxpayers billions in higher pension costs.

The creation of super is a remarkable Australian achievement that delivers a dignified retirement for millions – and it is rightly the envy of the world. Any time politicians float using super for something else, it undermines its purpose to deliver strong returns for all Australians.

SMC analysis shows a 30-year-old couple who withdrew $35,000 each from their super could retire with about $195,000 less in today’s dollars.

Table 1: Property price hike from proposal that allows first home buyers to use up to $50,000 from super

Capital city

Median house price*

Supercharged price hike

Median after price hike



























Weighted five city average





Notes: *CoreLogic Hedonic Home Value Index as at 31 December 2023. Prices rounded to the nearest hundred. Property prices encompass both houses and units. First home buyers typically enter the housing market at more affordable price points. However, increased demand from first home buyers will flow through to median property prices as represented in the table.

Source: SMC analysis.


About us:

About the Super Members Council: We are a strong voice advocating for more than 11 million Australians who have over $1.5 trillion in retirement savings managed by profit-to-member superannuation funds. Our purpose is to protect and advance their interests throughout their lives, advocating on their behalf to ensure superannuation policy is stable, effective, and equitable. We produce rigorous research and analysis and work with Parliamentarians and policy makers across the full breadth of Parliament.


Contact details:

James Dowling: 0429 437 851,


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