2025 budget set to draw the election battle lines on housing and super

The Albanese government isn’t finished with its pre-election moves to prove to voters it has distinct ideas on housing and superannuation.

Shadow Treasurer Angus Taylor will push super for housing. Picture: Nikki Short/NewsWire

A late move by Labor to beef-up its shared homeownership scheme confirms the two investment sectors set to become battle lines in the May election – housing and superannuation.

With little wriggle room in Tuesday’s federal budget, the ALP has nonetheless pushed ahead to enhance its long-awaited Home Equity Access scheme by allowing higher earners to qualify for shared ownership of a first home with the government.

Meanwhile, both sides of parliament are in virtual agreement over parallel concerns surrounding medical costs and pension access.

The Coalition has decided to copy ALP policy on any handouts relating to medical benefits dollar for dollar, while both sides are also effectively co-operating on keeping the deeming rate unchanged at an artificially low level of 2.25 per cent. (The deeming rate is the rate of return the government “deems” retirees have made on their investments for pension purposes).

With younger Australians frustrated by low housing affordability – and the ALP’s signature Housing Accord dramatically behind target – the upgrade in the shared ownership scheme allows the ALP to bring something new for younger voters to the election.

The Help To Buy program will be open to almost all first-home buyers after an extra $800m has been earmarked for the program. First-home buyers will now be able to choose between shared home equity and a string of existing programs, including the First Home Guarantee Scheme, where the government covers mortgage insurance.

Under the Help To Buy program, anyone earning up to $100,000 a year can buy a home up worth up to $1.3m – the share of the house held by the government (which runs up to a maximum of 40 per cent of the property price) must eventually be sold at the prevailing market price.

The program, which covers both new builds and existing homes, is finally due to start this year. The government had previously announced a salary cap of $90,000 a year – the program is expected to offer about 40,000 places.

A brick house for sale in Gladesville. Picture: Max Mason-Hubers/NCA NewsWire

In contrast, the Coalition’s new move on housing is to allow super to be used for a home deposit. With early signs, this policy will be popular with younger voters – there is a strong chance the concept of “flexible super” will be expanded in the coming months by the opposition.

In fact, super is the area where the two sides of politics are most seriously split – The division is most clear on the issue of the proposed new tax on super earnings over $3m.

Despite widespread opposition to this unprecedented tax on unrealised gains – the government is not letting go of the concept.

The Coalition has continually blocked so-called ‘Division 296’ legislation as a groundswell of opposition among advisers over taxing unrealised gains builds.

However, the protests seem to have made little impact, with Treasurer Jim Chalmers again reiterating he is pressing on with the concept.

The government is also trying to distinguish itself from the Coalition with the reform of financial advice.

That’s why it rushed out the next leg of Delivering Better Financial Outcomes package before the budget.

The reforms include a clean-up of adviser statements, but the new package did not cover the most significant issue, which is the ‘new class of financial adviser’ planned for big super funds.

James Kirby hosts the twice-weekly Money Puzzle podcast

Originally published as 2025 budget set to draw the election battle lines on housing and super