Economist John Quiggin describes a species of “zombie economics” – “dead ideas” that “still walk among us”. After its demise along with John Hewson’s failed Fightback! policy document at the 1993 election, few expected the idea Treasurer Joe Hockey floated this week – that first home buyers could “dip into” their superannuation to raise a deposit – to ever be revived. Yet revived it was, albeit as a thought bubble rather than actual government policy. Tony Abbott described it as a “perfectly good and sensible” idea, and even put his hand up as having suggested it to Hewson when Abbott was the then Liberal leader’s adviser in 1991.

Perhaps predictably, Paul Keating, who as prime minister ushered in the policy of compulsory superannuation in 1992, rejected the idea in an op-ed in the Fairfax press this week. Less predictable, from a partisan perspective, was former Howard government treasurer Peter Costello’s opposition. It is difficult to find a supporter of the idea outside the government’s inner circle. Even Malcolm Turnbull has called it a “thoroughly bad idea”.

There are problems with the operation of Australia’s superannuation guarantee, the most obvious of which is the generous tax concessions associated with employee contributions that overwhelmingly favour the already-wealthy and yet cost the budget up to $30 billion every year. But Hockey’s thought bubble would only further redistribute wealth from poor to rich: those on lower incomes would end up with less superannuation savings and more private debt, while existing home-owners would benefit from higher house prices at the expense of renters. In other words, two months out from their second budget, Hockey and Abbott have not learnt from the political failure of their first.

Super Zombie