Coalition looks to turbocharge super withdrawals, easy loans in battle for first home buyer votes

Aspiring home owners could use their entire superannuation balance to buy a property under an ambitious election pitch being worked on by the Coalition, which is also exploring ways to force states to boost supply and make it easier for people to get a mortgage.

Liberal senator Andrew Bragg will use his first keynote speech as the party’s home ownership spokesman to cast Labor as hostile to individual ownership and too focused on increasing the number of properties leased out by super funds, setting up the dream of owning a home as an election battlefield.

NSW senator Andrew Bragg (left) will cast Labor as hostile to individual ownership as the shadow cabinet wrestles with which policies to include in Opposition Leader Peter Dutton’s budget-in-reply speech.Credit: Alex Ellinghausen

Three Coalition sources said senior opposition members wanted to uncap the party’s super-for-housing scheme to allow first home buyers to use as much of their balance as they liked.

Former prime minister Scott Morrison went to the 2022 election proposing withdrawals of up to $50,000 from super for a deposit. The opposition is expected to retain the requirement for home buyers to return the withdrawn amount to their superannuation fund if the property is later sold.

The sources, who were not authorised to speak publicly, said housing spokesman Michael Sukkar was leading a group of MPs examining how to use Commonwealth funding to force states to free up land and boost ailing housing stock.

The opposition is also considering repealing responsible lending laws – which oblige financial institutions to check how much a potential borrower earns and spends – among other tools to reduce lending barriers for people trying to break into the housing market.

Party insiders said the shadow cabinet was wrestling with what to include in Opposition Leader Peter Dutton’s budget-in-reply speech after months of pressure to produce policies ahead of an election expected early next year, with the Coalition still lagging Labor in polls. The unfinalised super-for-housing push – not yet agreed on by shadow cabinet – could form a component of the economic pitch.

“Addressing this issue will be at the core of our offering at the upcoming election. It is shaping up to be the housing election,” Bragg will tell the Sydney Institute on Tuesday night, according to a draft copy of his speech.

“Millennials and Gen Zs were raised to believe, as were all postwar generations, that if they work hard and save, they will be able to own their own home.

“Australians who have entered the workforce over the past two decades have done everything right. They have worked for their little piece of earth and Australian dream in the same way as their parents, but the dream is increasingly out of reach. The dream is turning into a nightmare.”

Labor is concerned about losing votes on its left flank to the Greens, whose housing spokesman, Max Chandler-Mather, has campaigned on capping rents and upending rules for property investment. The Coalition’s emphasis on home ownership will increase pressure on Labor to come up with new ideas to respond to an issue younger voters rate as their top concern.

Bragg, a superannuation sceptic, will accuse the Labor government of “giving up on individual ownership” and adopting a corporate housing policy by proposing tax breaks for foreign investors to encourage build-to-rent housing.

“In doing so, Labor will subsidise foreign fund managers and institutional investors to construct and rent homes to Australians. Young people will be serfs to foreign fund managers or local union super funds,” his speech says.

The superannuation industry vehemently opposes the super-for-housing idea and argues, along with some experts, that it may further inflate the housing market and deplete super balances.

But Bragg will challenge these arguments by quoting the Grattan Institute’s Brendan Coates, who has said the super sector’s claims about property price rises are excessive. Critics who worry about reducing super balances ignore the immediate and ongoing financial security created by owning a home, Bragg will argue.

The senator will say Labor will fall 200,000 houses short of its target of 1.2 million homes being built in five years, and suggest the Australian Prudential Regulation Authority, which sets lending rules for banks, should loosen mortgage rules.

The Morrison government tried and failed to repeal responsible lending laws, introduced after the global financial crisis, in an attempt to boost the economy after the pandemic-induced recession.

“We can have banks which are both unquestionably strong but easily able to lend to first home buyers,” Bragg will say.

Bragg will also suggest financial penalties from the Commonwealth “when states make laws or implement regulations that make it harder to increase housing supply”.

Prime Minister Anthony Albanese last year struck a deal with premiers at national cabinet that set a new building target with the promise of $3 billion in federal incentives for states that help meet the higher goal.

Bragg also opposes any changes to negative gearing and capital gains tax exemptions, citing research from right-leaning think tank the Centre for Independent Studies that suggests it would have a “minuscule” impact – a claim contested by some economists.

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