Interview with Jamie Burnett on 6PR Drive

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Subjects: Superannuation and housing

E&OE....

Jamie Burnett:

Is super shaping up to be a key election battleground? Seems that way to a degree. Today the Coalition firmly entered the chat. Shadow Housing Minister Andrew Bragg throwing around ideas that super could be used as collateral, maybe you could withdraw from your super as well for a deposit to get into a home, or to help pay off your mortgage early. A range of options there. I'd love your thoughts: 133 882.

Now, obviously this comes after One Nation pitched for the option for workers to take a quarter of super payments as income—have it now instead of later, still hold on to that 9%, but not the full 12. Labor smacked that down, but it is shaping up as a key issue. Early doors I know, we've got some time to go, but you can see the writing on the wall here. Let's go to Senator Andrew Bragg, as I said, the Shadow Housing Minister from the Opposition. G'day, Andrew.

Senator Bragg:

G'day, how are you?

Jamie Burnett:

I'm doing all right. Is super the key to unlocking home ownership across Australia now?

Senator Bragg:

Well, look, supply is going to be the key, but ultimately, if there are sensible ways to help people better calibrate their retirement, super, and housing policy, then we should be open-minded about that.

Jamie Burnett:

So what's sensible? Are we looking at collateral for loans, are we looking at being able to withdraw for a deposit or paying off mortgages? How far does this run?

Senator Bragg:

Well, I think ultimately it comes down to what can you do that's going to be helpful to people, that is going to actually help them to either get a first house, or to reduce their interest bill, or to reduce the encumbrance on their house so that they own it outright. And so what the Intergenerational Report found this week was that the key test of your success in retirement is your housing status. So that's why we want to prioritise home ownership.

Jamie Burnett:

So what's on the table here? I know you're flagging it, this is, you know, far from a final policy heading to an election, but what is on the table? How far are you considering pushing this?

Senator Bragg:

Well, the main point is that we think that it's important that these silos, if you like—super, housing, Age Pension, whatever—that they're all calibrated to give people the choice that they need to maximise their prospects of home ownership, because we're going to hit close to a million retired renters over the next 10 years. We've seen a doubling of the amount of retired renters over the last few years, so we're changing the character of the nation. If we're going to have a lot more retired renters, it's going to change what retirement is like, because when super started there was an expectation that people would own their own house. So we're trying to move the debate into sensible territory and look at all the different options. The Labor Party just want to raise donations off the back of scare campaigns, which is very unhelpful.

Jamie Burnett:

So do you think times have gotten more difficult? Is that why we're now in a position where we're having to look at accessing super earlier just to be able to purchase a home?

Senator Bragg:

Well, effectively, as superannuation has grown, home ownership has shrunk. Now, I'm not sure there's a direct correlation there, but it is a large diversion of people's resources. It does impinge on some people's ability to muster together a deposit. Certainly, a lot of your listeners would think, "Well, why am I paying interest costs and high fees simultaneously? I'd rather just net them off." So I just think it's really about trying to have a sensible discussion about what can we do that's going to help people get that first deposit, which establishes a sustainable mortgage, and how can we help people that have mortgages to ensure that they own their house as fast as possible?

Jamie Burnett:

Are you playing with fire here a little bit? You know, how do you balance that risk of taking from something today that's really designed to use tomorrow?

Senator Bragg:

Well, I mean, your house is going to be your principal retirement strategy, right? As the Retirement Income Review found and as the Intergenerational Report found, your house is your key test of a successful retirement. So if you can avoid renting in retirement, then that's going to be the number one priority. So that's sort of the focus.

Jamie Burnett:

I mean, but you're assuming that you access your super now, you get into a home, and you make good decisions and pay the thing off. That's a fair assumption.

Senator Bragg:

Well, I just think the assumption we're heading for is that people will have maybe decent super balances, but won't be able to buy a house. And the Labor Party's policy is that the big super funds should be big landlords and that people should rent out their house from the super fund. And I just think that's a perversion of the Australian dream. We want to flip that around because we've always been a strong home-owning democracy, certainly since the 1950s, and I don't want to lose that.

Jamie Burnett:

So the knock on this stuff is it's too risky, right? And you create a situation where you're not left with enough in retirement, and that can cause real problems. Do you think that narrative needs to change? Do we have to give people more credit for their ability to plan down the line?

Senator Bragg:

Look, it's a good question. I think we just need to be very clear that the number one priority in retirement is actually getting a house. And so for a lot of people who are growing up now with 12% super, they're going to have a lot of super, but they might not be able to buy a house. So if there's some recalibration of their resources across their super and their private savings that allows them to buy a house, then that's just a conversation that we want to have. So this is not a final policy in any form, but this is really a discussion that we think is sensible and practical. A lot of people would say, "Well, it's all my money, and I want to make sure I get the best outcome for me."

Jamie Burnett:

Shaping up as a key battleground, super, isn't it?

Senator Bragg:

Well, Jim Chalmers is such a desperate man. I mean, he's running around trying to run scare campaigns and trying to raise donations for the Labor Party off the back of the discussions that we've been having. When Paul Keating designed superannuation, one of the initial design features was that you could take money out for a house. Now, they later changed that, but at least you have to give Keating some vision for having some bigger-picture thinking, whereas Chalmers is just a desperate man trying to run scare campaigns and raise money for Labor off the back of people's policy ideas. I mean, that's really a low-rent debate from his point of view, I think.

Jamie Burnett:

Paul Keating has also been critical of accessing your super earlier for housing schemes like this.

Senator Bragg:

Well, he's changed his mind, as I've said. So initially, he had housing as part of the super scheme, and then he's changed his mind. That's fine. There's a lot of groupthink on this, and I just think the groupthink is dangerous. And we want to have a debate where people can get the best outcome for them, not the best outcome for the super funds and the unions and the banks.

Jamie Burnett:

So do you think withdrawing from super as part of a deposit, you know, and let's use the scenario of maybe a younger couple trying to get into the market for the first time, is that something you could live with? Are those the parameters that you're looking at here? Is that a good idea?

Senator Bragg:

Well, you wouldn't necessarily have to withdraw it. I mean, you could leave it in super and use it as collateral for a loan, or you could leave it in there as cash to be an offset. Now, under Jim Chalmers's economy, we've got high interest rates, high inflation, because he's hopeless. And so if we're going to have higher interest rates, people are going to be paying more interest on their mortgages, and so some people might like the idea of being able to offset that and pay off their loan more quickly. So those are all options. As I say, they're not policies, but they're certainly things that are worth kicking around.

Jamie Burnett:

So Andrew, you'd be more comfortable with that if it was used as collateral as opposed to a withdraw?

Senator Bragg:

Well, it just depends. I mean, I just think there are pluses and minuses about all these different ideas. And the Senate has done a number of inquiries into these in the past and has shown how they can be done or not done. And it's a debate worthy of a great country like Australia.

Jamie Burnett:

All right, now's the time for the debate. I mean, you've raised it before, haven't you? You know, you've had a couple of cracks heading into elections talking about super, the ability to use that and withdraw for housing as well. There was the idea at the last election around first-home buyers taking up to $50,000 out of their super to purchase a home. Do you feel that situation has changed since then to make that something more exciting or more of a draw for voters?

Senator Bragg:

Look, I haven't given that any thought. I just make the point that in general, supply is going to be the key to solving the housing crisis, but also people who do want to buy a house and have access to their own money in some form through super would probably want to use their own resources to access a house, because that's something that's important to the Australian people. And I just think it's a no-brainer, quite practical discussion to have.

And as I said in my speech today, we've got to be wary of using data and relying on the talking points from the super industry, because they have created a huge ecosystem of bloodsuckers who rely on this system for their incomes. And that's legitimate, because they want to argue their own case, but they're arguing for a system where they collect high fees, whether that be the investment managers, or the asset consultants, or the consultants, or the lawyers, or the funds themselves, or the trustees. They all benefit from this scheme.

So I think we've just got to be objective in how we look at the data. And as I say, the ABS is saying that 32% of lump sums coming out of super last year were used to pay off mortgages, so I think that's a pretty telling stat.

Jamie Burnett:

All right, let's see what the listeners think: 133 882. Really appreciate your time today. Thanks, Andrew Bragg.

Senator Bragg:

Thanks, Jamie. See ya.

[Ends]

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