Treasurer Joe Hockey’s suggestion of allowing young people to access superannuation early in order to buy their first homes would cost the budget as much as $31 billion through until 2050, according to analysis from PwC.
The Australian Financial Review reports that the internal PwC study found between $500 million and $1.1bn would be lost every year in the near-term and potentially $2.1bn annually come 2049 given the government taxes earnings on super balances at 15 per cent.
"It's obviously a relatively significant number and in policy terms, is not a small number to take out of the budget annually," PwC partner Paul Abbey told the AFR.
The analysis assumed any such scheme would be limited to people below the age of 35, with as many as half of the eligible pool opting to withdraw $25,000 over a 10-year period.
The super debate was ignited by the treasurer over the weekend and while Prime Minister Tony Abbott has welcomed an open debate, the government has said it has no intention to make any changes at this stage.
The controversial idea has, however, been panned by former PM Paul Keating, the head of the Financial Services Inquiry David Murray and Mr Hockey’s cabinet colleague Malcolm Turnbull.