Allowing young Australians to tap into their super for a house purchase could cost taxpayers billions (even potentially a trillion) of dollars by the end of the century, a new modelling by Super Members Council shows.

The modelling, completed by Deloitte, 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. 

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

  • Costing the federal 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; and
  • 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; and
  • 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.