Opposition leader Taylor rules out using super to pay down mortgages as shadow housing minister parrots One Nation policy
Australia's opposition party is divided over whether Australians should be able to tap their superannuation to help with a mortgage, after opposition leader Angus Taylor distanced the Coalition from shadow housing minister Andrew Bragg's new One Nation-lite proposal.
The divide comes on the same day new research shows first home buyers' borrowing power sliding just a week out from the Reserve Bank of Australia's (RBA) next cash rate decision.
The split adds confusion to a live debate over super and housing that is playing out alongside a One Nation push to let workers redirect part of their compulsory super into take-home pay.
Speaking on Tuesday, Coalition leader Taylor said Bragg's idea – allowing super to be used as collateral for a home purchase – was "not our policy," while stressing that Australians should have choice over their own super.
“Superannuation is Australians’ money,” said Taylor. “They should have a choice in it, that’s why we strongly support self-managed super funds. But the proposal you’re talking about there is not our policy.”
Speaking to the Financial Services Council earlier in the day, Bragg suggested that the Coalition could go further than its 2025 election policy of letting first home buyers withdraw up to $50,000 from super.
He said: “If people are looking at paying very hefty interest costs – particularly in an environment where we have stubbornly high inflation and high interest rates under this government – for some people, it might make sense for them to try and reduce their interest costs and pay off their mortgage earlier.”
One Nation's wage-boost plan gains traction
The debate comes amid intense competition in the polls from Pauline Hanson’s One Nation party, which has proposed letting workers access three percentage points of their compulsory 12% super contributions for up to three years, provided they are paying rent or a mortgage.
A Compass poll commissioned by One Nation found 62% of voters support using super to boost take-home pay, including 67% of Liberal voters and 60% of Labor voters, with support highest among 25- to 34-year-olds.
Federal treasurer Jim Chalmers has rejected both ideas, accusing the Coalition of "coming after superannuation" and pointing to this week's Intergenerational Report, which projects superannuation will cut $31 billion from age pension costs by the mid-2060s.
Shadow treasurer Tim Wilson accused Labor of prioritising super funds over aspiring Australian homeowners.
“Part of the challenge is the government and the Labor Party continue to prioritise superannuation over home ownership, which means people are buying later and at higher prices, which means that Australian families are being kneecapped from the start,” said Wilson.
“Instead, the Labor Party has consistently tried to rig the rules to favour superannuation funds and the scale of investments they hold against young Australians buying a home earlier and cheaper.”
But Mary Delahunty, chief executive of the Association of Superannuation Funds of Australia (ASFA), said super was "Australians' money, put aside during their working lives" and warned against "weakening one of the policies" helping meet the cost of an ageing population.
Speaking up against One Nation’s policy earlier this month, Delahunty said: “One Nation’s policy to allow people to access their super to help with their living costs would be economically disastrous. This policy would push up inflation and make people poorer in retirement. It’s as simple as that.
“Most Australians understand the basic economics. When you pour more money into a high-inflation economy, it makes everything more expensive. This proposal would not alleviate the cost of living; it would drive the cost of living higher.
“It is unfair to ask everyday working Australians to sacrifice their retirement savings to fix policy problems they didn’t cause, like inflation and the housing crisis.”
First home buyers squeezed as rate decision looms
New research commissioned by the Mortgage and Finance Association of Australia (MFAA) highlights how first home buyers are caught between falling prices and shrinking borrowing capacity.
Money markets are pricing a roughly three-in-four chance the RBA lifts the cash rate from 4.35% to 4.6% next Tuesday, which would add close to $100 a month to repayments on a $600,000 loan and cut about $13,000 from that household's borrowing capacity.
Read more: Commonwealth Bank hikes fixed mortgage rate ahead of RBA call
At the same time, national home values have fallen for five months straight and now sit around $34,000 below their March peak, according to research from Cotality.
MFAA chief executive Anja Pannek said the combination creates a complicated picture for buyers. "A home that fitted the budget last month can suddenly sit just out of reach. That's why the question we hear most isn't just what the Reserve Bank will do next. It's: 'How much can we actually borrow now?’”
The YouGov survey commissioned by the MFAA of 2,057 Australians planning to buy within three years found two in five prospective first home buyers lack confidence navigating the home loan market without professional help.
The survey also found brokers are now the most trusted source for prospective buyers, with almost six in ten naming a broker as trusted, ahead of financial advisers and banks.
"Every 38 seconds, a residential home loan is written through a mortgage and finance broker somewhere in Australia," Pannek said. "Whatever the RBA decides on 29 September, the most useful step is the same: sit down with a mortgage broker and understand what your borrowing power looks like under different scenarios."
Caroline Jean-Baptiste, a mortgage broker with Mortgage Choice and newly appointed MFAA Life Member, said servicing capacity and rate anxiety are the biggest hurdles facing her first home buyer clients, alongside thin deposits and lenders' reluctance to count gifted funds as genuine savings.
First home buyer Garry Cunningham, who bought with his partner last year, credited his broker with helping the couple buy within budget despite the tighter conditions of the time.
