Interview with Trent Nikolic on 2GB Drive

E&OE....

Trent Nikolic:

In a speech to the Financial Services Council, Andrew Bragg has suggested that the Coalition could go further than a 2025 election proposal to enable first-home buyers to take up to $50,000 out of superannuation for a home purchase. This is what Andrew Bragg said: "If people are looking at paying very hefty interest costs, particularly in an environment where we have stubbornly high inflation and high interest rates under this government, for some people it might make sense for them to try and reduce their interest costs and pay off their mortgage earlier." That's what Andrew Bragg had to say. Opposition Leader Angus Taylor said he supported choice in super, but that Bragg's idea was not official Coalition policy—that's Angus Taylor's words. Andrew Bragg is on the line. Hello, Andrew, thanks for joining us.

Senator Bragg:

Hey Trent, how are you?

Trent Nikolic:

I'm really well, thank you. Just quickly, and I've had a few messages to this effect, what we've read that you've had to say today, is this Liberal Party policy, or is this Andrew Bragg policy?

Senator Bragg:

Well, the whole point of this is to say that we don't want to become a nation of retired renters. We want people to have more choice. This is the start of a debate, this is not a final policy decision. This is really just trying to get the debate back on track, because you may recall that Jim Chalmers has been running scare campaigns and trying to raise money for the Labor Party on the back of false claims that were made on the back of my recent National Press Club speech. So the point is that we want more choice, and there are some important facts to get on the table here about the direction we're heading in.

Trent Nikolic:

My guest is Opposition housing spokesperson Andrew Bragg. Andrew, can you just explain in essence what it is that this proposal entails and how it might work?

Senator Bragg:

Effectively the main point is that we're getting to a point where 32% of lump sums coming out of super are now going to pay off mortgages. So we're seeing people effectively have to pay a lot of interest and then a lot of fees to super funds simultaneously. And so home ownership is the principal test of whether you have a safe retirement, and so we are continuing a debate on improving the options that people might have available to them to ensure that they can actually get into a house of their own in retirement.

Trent Nikolic:

Are you saying therefore, Andrew, that you're doing it proactively? So I guess what you're saying is that at the end of your working life you take money out of super to pay off a chunk of the mortgage. You're just suggesting that you'd do that proactively or use it to get the mortgage earlier?

Senator Bragg:

Look, there are a range of ways this has been looked at in the past, and these are not our policies. But effectively, the last couple of elections we said look, you can take some cash out of super, but there are other ways you could do it, such as allowing the money to stay in the system and being used as collateral to lower the amount of money needed to get a loan. Or you could use the money to be leveraged for an offset to reduce the heavy interest costs people have to face under Jim Chalmers' economy. So there are a range of ways it can be done. The main point about today is to say look, we're heading in the wrong direction here, we're going to have too many retired renters, we want to calibrate the housing and the retirement policy options that people have to buy a house.

Trent Nikolic:

I guess, Andrew, as well, this does go to the theory that a lot of listeners have—I get feedback on this whenever we talk about it—that your super is your money, my super is my money, I should be able to do with it what I want. Is that fair or is that simplifying it a little bit too much, or does that play into exactly what you're suggesting?

Senator Bragg:

Well, it is the people's money. I mean, it's deferred wages, it's part of the compensation that you receive if you're working, and obviously it should be working for you. Now, Labor have a policy of trying to get the big super funds to become landlords, but we want people to be their own landlord. And I think that the character of Australia is going to change if we're going to have more than a million people retired and renting, because home ownership is more than just an economic thing, it's a psychological thing. And I just think it gives people peace of mind if they've got their own house to live in in retirement, they've got more certainty, and I think it's ridiculous to imagine a scenario where people might have quite a lot of super, but can't afford to buy a house. So we just want to make sure that these things are properly calibrated, so it's the start of a debate, not the end of it.

Trent Nikolic:

Andrew, is there a risk if we allow people to take money out to put into the purchase of a property that it fundamentally changes the nature of the superannuation system, or is it simply the fact that in a country like Australia real estate and the roof over your head is, generally speaking, a pretty safe investment, and there's little risk in this scenario?

Senator Bragg:

Well, at the end of the day, if you take money out of the super scheme and you were to do something else with it like invest it into a house, you'd get a pretty good return in most years, but that's not guaranteed, and I'm not here to give investment advice. But I think it's clear that we could have better calibration between all these different systems, between super, the Age Pension, housing, and I just think people want more optionality, but you've got to get it right. And obviously we've seen different announcements in the last few weeks which are not really going to touch the sides in terms of being able to get housing back on track. And I just think your listeners will be aware that if you are a retired renter, you're going to have a much harder retirement than someone who owns their own house.

Trent Nikolic:

Yeah, it's a fair point. One last one before you go, Andrew. I've got a lot of messages to this effect, and every time we bring this discussion up—and you touched on the housing shortfall there—the open line goes into meltdown. Can you respond, I guess, to the messages I get from listeners who just cannot find anything in any of the Labor policy to indicate that we're getting anywhere near where we need to be for housing supply?

Senator Bragg:

Well, the government have collapsed housing supply by 30,000 a year since they came to office. They've spent billions of dollars on housing to supply fewer houses. Their tax changes will cut supply by 35,000 according to their own figures, and then the cancelling of SMSFs being able to borrow to invest in property takes out another 16,000. So Labor has done everything they can to suppress supply, and that's going to make life much harder for Australians. And I make the point that most of the housing policy needs to be on the supply side, but there are things that we could do to help people get their own house or pay off their own mortgage faster than otherwise. So that's why this is an important debate to have, and we look forward to concluding it over the next few months.

Trent Nikolic:

Keep prosecuting the case, Andrew. Thank you very much for your time.

Senator Bragg:

Thanks, Trent. See you.

Trent Nikolic:

There he is, that's Andrew Bragg, Opposition Housing spokesperson. You heard his prosecution of the case there.

[Ends]

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