Interview with Chris O'Keefe on 2GB Drive

Chris O'Keefe

Well, Liberal Senator Andrew Bragg is on the line for us now. Senator, thanks for your time.

Senator Bragg

G'day, Chris.

Chris O'Keefe

So talk us through the proposal. Did I pretty much get it right?

Senator Bragg

Pretty much. I mean, the whole idea is that after 13 interest rate rises in a row, we want to see more Australians keep more of their own money rather than pay it all in interest to banks. And we think that super would be a very good way to reduce that interest burden. And effectively, in a place like Sydney, where you've got people with mortgages of around a million bucks in many cases, someone in their 40s with a couple of hundred grand in super, that would make a really big difference to their monthly disposable income.

Chris O'Keefe

How? Because an offset account doesn't necessarily reduce your fortnightly or monthly payments.

Senator Bragg

Yeah, but it would in this case because you would have a lower amount of debt that you owe the bank. So therefore, your interest cost would be lower. That's how it would be configured.

Chris O'Keefe

And would it need to be legislated? Is that the idea?

Senator Bragg

Yes, we'd need to bust open the super system to do this. Now, I believe that super should be deregulated, at least in part, because it's the people's money. And the key point here, the key driver here, Chris, is really the single point. The key determinant of whether your retirement is going to be successful is whether you own your own house. It's not the size of your super balance. So I think we should be doing everything we can to maximise the ability of Australians to own their own house. First home buyers, sure, but also for people to get rid of the debts on their houses.

Chris O'Keefe

Would you propose that people could draw down on that offset account if necessary?

Senator Bragg

Well, I've got a very liberal view on super, and that is that it's the people's money. It doesn't belong to the government. Now, some of the data coming out from the prudential regulator APRA now shows that a lot of Australians are using their super to pay off their mortgages when they retire. So why do we force these people to pay all that interest to banks for decades? So I think that's a compelling point, Chris.

Chris O'Keefe

Understood. But if it is there to help with people's monthly payments and interest payments and everything, should you not put some checks and balances so people then can't draw down on that account to say, pay a dentist bill or pay the kid's school fees?

Senator Bragg

Look, I think it would be worth looking at integrity measures. It always is. But my starting point is it's the people's money. So if we're trying to maximise first-home ownership or home ownership in general, fine...

Chris O'Keefe

Yeah, but I understand you're saying it's the people's money. I don't disagree with you. But either you lock it up in an offset account for the express purpose of lowering interest rate payments on people's mortgages, or you just let people put it in a bank account and use it however they want.

Senator Bragg

I think the first preference would be we try and look at some integrity measures to maintain it around first home ownership and home ownership in general. Basically, the government have introduced legislation which will define the purpose of super. Now, I don't think that's a big priority in the street when I meet people. It's a priority for Labor because Stephen Jones and the Labor Party are very keen on trying to help the super funds and their agenda. So their legislation to define the purpose of superannuation is an opportunity for us as an opposition to develop some of our own policies and test some of the concepts here and model them. And that's what I'll be seeking to do.

Chris O'Keefe

Do you not see—and I hear this out of the labour movement, L-A-B-O-U-R movement—where they say that the truth is Andrew Bragg and all the other Tories don't like the idea that the workers have control of all this capital through Industry Super Funds.

Senator Bragg

No. I mean, I really believe in first-home ownership and home ownership in general. And we believe a bit like Darryl Kerrigan did...

Chris O'Keefe

But can't you have both?

Senator Bragg

Yeah, you can have both. But I mean, a bit like Darryl Kerrigan's statement about it's a home, not a house, a house, not a home, that we want people to have a house because that gives people a greater stake in society. And I think given home ownership is lagging amongst Millennials and Gen Zs, this is one way to arrest the decline. Now, obviously, supply is the main game here, Chris. But super can help. And the house is the foundation. What else you have on top of the house in terms of investments is secondary.

Chris O'Keefe

Isn't that an issue then structurally, where we've got to the point where it is a financial investment. It is an asset, not just a roof over your head, somewhere to raise your family.

Senator Bragg

Yeah, that's true. Look, it is concentration. There's no doubt about that, Chris. But I think you would agree with me that it's not a good situation that we're now seeing so many Millennials and Gen Zs in a position where they feel like they will never own a house. And the biggest pool of capital they do have...

Chris O'Keefe

But you don't also want to see those Gen Zs and millennials in their 60s and 70s on the pension again.

Senator Bragg

Yeah, but we're now heading into a situation where people are not going to have a house and they're going to have a bigger super balance than they need...

Chris O'Keefe

But what does that look like? Why is that a bigger super balance than they need? What is, what is the definition of need?

Senator Bragg

Well, it's not a good outcome to have that from a tax and social security viewpoint, because if you are a retiree and you own your own house, you're eligible for the pension. Now, it's much harder for people who are retired renters in general. So the system biases homeownership. So we don't want to see a generation of young people who will become older people locked out of that opportunity.

Chris O'Keefe

Right. Well, it's something to at least have a conversation about. I'm waiting for Anthony Albanese and the Federal Government, to come up with some idea to re balance after the disaster that was the Voice Referendum, because big ideas were supposedly the ballpark of the Labor Party, Senator Bragg. But it's only you lot that seems to be coming up with them at the moment, so keep going.

Senator Bragg

Thanks, Chris, Thanks very much.

Chris O'Keefe

That's Liberal Senator, Andrew Bragg.