Tony Abbott says his government has no plans to allow young people to use superannuation to buy their first home – but is happy for the idea to be debated.

Treasurer Joe Hockey said Australia needed to make the super system more flexible, even suggesting it could be used to help first home buyers.  Labor and industry groups have criticised the idea, saying it would push up house prices and erode retirement savings.

But the prime minister described the proposal as "perfectly good and respectable", and one that had been adopted by countries like Singapore.

"It is something that I am very happy to see further debated but there are obviously some issues around it, and let's fully consider it," he told reporters in Perth.

"At this stage we don't have any plans to introduce it."

Labor's treasury spokesman Chris Bowen dismissed the idea as a "thought bubble" that would only harm the superannuation system.

"We need superannuation more than ever before because we are living longer," he told ABC radio.

"It could have the perverse impact of making housing affordability worse and undermining retirement incomes for people on lower and middle incomes."

Chief of the Australian Institute of Superannuation Trustees, Tom Garcia, welcomed debate about retirement savings.
"But I think opening up for home loans or anything else is not the way to start," he told ABC radio.

The Association of Superannuation Funds of Australia warned that raiding the nest egg early could come at the expense of a comfortable retirement later on.

  • This has been happening in Canada for years with great success. Funds are required to be repaid back in retirement savings within a term or face a penalty; as such, in the short term it helps first time how buyers, and in the long term, helps with retirement… win-win.

    ironically, affordable housing in Canada is not an issue. That said, I do realise that land allocation in Australia plays a major role in driving up costs.

  • It works in Singapore because there is accountable, stable and well-managed public housing. They also have good intra-government collaboration and policies to make sure it works out smoothly, your country does not have that Abby! You are too busy picking old politics and really loosing touch with your people.