Master Builders Australia chief executive Denita Wawn, who sits on the board of industry super fund giant Cbus, is urging Josh Frydenberg to allow first-home buyers early access to $50,000 from their retirement savings to build or purchase a home.
Ms Wawn’s proposal, in addition to the building industry lobby group’s push for $5.1bn in construction stimulus at the October budget, is likely to be fiercely resisted by industry super funds, including Cbus, which have long opposed early access schemes.
Her comments come as new forecasts show slower migration and the wider economic impact of the COVID-19 pandemic will push home construction rates far lower over the next decade.
Estimates show there will be 172,000 new home starts in 2030, compared with 234,000 at the industry’s peak in 2016. “The multi-unit market will bear the brunt of the COVID-19 shock.”
Victoria – a homebuilding powerhouse in recent years – was forecast to “decline largely due to a rapid slowing in apartment construction,” the HIA said.
Ms Wawn said Mr Frydenberg should allow compulsory super to be used “to help people enter the housing market as quickly as possible as well as having adequate retirement savings”.
“Giving people a sizeable chunk of their super, for example up to $50,000, will make a substantial difference,” she told The Australian. “Access to anything less would be a meaningless gesture that won’t go any way to solving the problem.
“The deposit gap will be accentuated in this current recession, yet we know that if people can get out of the rental cycle and into their own home, it can provide a valuable financial foundation for their long-term future.”
Under the COVID-19 early super access program – heavily criticised by Labor and industry super funds – retirement savings could be accessed twice, with withdrawals of between $1000 and $10,000.
As of August 9, about three million Australians had pulled $31.1bn from those funds. The Australian reported last month that Treasury estimated $42bn would be withdrawn by the time the scheme came to an end.
At the time, Industry Super Australia chief Bernie Deane said the early access scheme should be “closed after Christmas if the nation is going to avoid a big headache down the track”.
The government also introduced the First Home Super Saver Scheme in 2018, allowing access to voluntary contributions — up to $30,000 — to buy a new home. The government has already put in place other programs to stimulate the purchase and construction of new homes, including the $688m HomeBuilder scheme.
Housing Minister Michael Sukkar said HomeBuilder, providing $25,000 for new homes and renovations through to December 31, would “keep the pipeline of construction flowing”.
“Although still in its initial stage, the success of HomeBuilder is highlighted by the fact that since its announcement in June, builders have reported new home sales have increased by more than 64 per cent over the preceding two months,” he said.
“We will continue our work with the construction industry to protect the jobs of tradies as we get to the other side of the pandemic.”