One thing that has been overlooked is that the money is put into superannuation "with the rest of it", which is dangerous. It's using "one account for two principles", as part of the money is needed in the shorter term (house) and part is needed in the much longer term (retirement).

The capital is therefore subjected to what it is actually invested in; as a younger person saving for their first home, their super is likely to be (and should be) in a growth option and thus, short-term capital is going to be subject to the vagaries and volatility of the stockmarket. It's all very well and good in a rising market, but if there is a correction or a crash before they go to withdraw the money, it might cost them more than any 15% or 30% saving that they make on tax.

It's only really an option for those with the money and the foresight to start saving some 7-10 years in advance (because that's how long an average market cycle is to iron out volatility) and if you need the money sooner than that, you shouldn't BE risking capital in growth assets.

The other side of the coin (sic) is that you switch into the defensive option of bonds, cash and fixed interest to preserve your short-term capital, but that's not going to cut it either in the longer term for your superannuation, which again, as a younger person, should be in the growth options.

This is a very badly thought out / thought through policy, obviously made by people who don't understand simple financial principles like "short term debt" versus "long term debt".

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Why not just reinstate the First Home Saver Accounts that were a Federal Government initiative to help people save for their first home abolished 1 July 2015. The interest earned on these accounts was taxed at 15% the same as a superannuation fund, the amount able to be contributed could still be capped but it would keep the funds separate from retirement savings and allow appropriate levels of investment risk for the time frame. From what I have read this new scheme could have some interesting administration issues.

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