Interview With Oliver Peterson on 6PR Radio

E&OE………

Oliver Peterson

To tell you more, the MP behind this is Andrew Bragg. Good afternoon.

Senator Bragg

Good day. How are you going, Ollie?

Oliver Peterson

How would this work?

Senator Bragg

Well, basically, if people have superannuation, they could use that money to offset their mortgage. And I think that would be particularly attractive at this point in time when we've seen 13 interest rate rises under this government.

Oliver Peterson

Wouldn't that maybe force the Reserve Bank, though, to put interest rates up even further? Because then all of a sudden, mortgage holders have got this offset account. They're not having to spend as much of their money on those interest rate hikes?

Senator Bragg

I don't think so. I think you want to set policy for the long term. The idea that Australians can use their own money to pay for their own house is fundamentally sound. I mean, the biggest determinant of success in retirement, financial success, that is, is whether you own your own house. And we're now seeing generations of Australians who are finding that almost unattainable.

Oliver Peterson

You say your own money, but we're not allowed to access it until we retire, Senator. Isn't that the big problem?

Senator Bragg

But that's why I think the system is way too rigid. I mean, it may have worked for some of the older generations, but I think for millennials and for Gen Zs, I think the idea that they can use their own money to suit their own purposes is fundamentally reasonable. There's a big industry here that's galvanising against these policies because it doesn't suit them. But I think it's worth exploration. I really do. I think it is worth a look.

Oliver Peterson

How do you put in some sort of clause, though, that it could only be used in an offset environment for a mortgage, as opposed to me maybe withdrawing that money to go on a holiday or pay the kid's school fees?

Senator Bragg

Yeah, well, look, we have evidence from the COVID crisis when there was early release of super that most people used their money to improve their own personal balance sheets, pay down debts and the like. I think the risk of that happening, I think, is reasonably low. But if people were very concerned about integrity matters, you could build in a provision which requires people to use it only for a house.

Oliver Peterson

Do you need legislation to make these changes?

Senator Bragg

Yeah, you'd need a part of law. It would be a significant reform, and you would do it as part of the bigger package, which is designed to promote more development of supply because everyone knows that supply is really the major issue here in the Australian housing market. We need to build more homes.

Oliver Peterson

The government doesn't want anybody to touch super, though, do they? Do you think they're being narrow minded with it, Senator?

Senator Bragg

Oh, mate, they never do because, of course, their favourite vested interests are the unions and the big super funds, and they don't want to disrupt their commercial arrangements because they pay for the Labor Party's campaigns, they run their pre-selections, they do all that stuff. There's a lot of vested interests here.

Oliver Peterson

And like you said, fundamentally, it comes down to whose money is it? It's your money. It's my money. It's part of your wages, Senator. Should the incumbent on the individual to decide when he or she is able to spend it?

Senator Bragg

Yeah, I think the idea that people can't use their own money for a first home deposit is fundamentally mean. I think the idea that you can't use your own money to reduce your interest bill over the long run, I think, is completely reasonable. People are paying so much money to banks over the years, and now we're seeing data come out that people are using their super money to pay off their mortgage when they retire or when they get to preservation age, at age 60. I think that's bad. I mean, why are we forcing people to pay all this money to banks when they could be getting into their own house debt-free earlier.

Oliver Peterson

That doesn't make any sense, does it? Because if you're saving all that money up until retirement and then using or drawing down on some of that to pay off your house once you've retired, well, why couldn't you have done that 20 or 30 years ago?

Senator Bragg

That's the point of this. And that's why I think we should do some detailed analysis of how this would work. That's what I'm going to be doing in Parliament.

Oliver Peterson

Andrew Bragg, thanks for your time.

Senator Bragg

Thanks, Olly. Cheers.

[Ends]

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