Interview with Chris O’Keefe on 2GB

Subjects: Home Ownership, Super for Housing

E&OE………

Chris O'Keefe

Well, Liberal Senator Andrew Bragg is the Coalition's housing spokesman. He's been pushing for this one for a very long time. Senator, thanks for your time.

Senator Bragg

Chris, how are you?

Chris O'Keefe

So you're going to expand it. What does that mean?

Senator Bragg

We're looking at that. There's a Senate Inquiry. Fifty thousand bucks in Sydney will not get you a deposit and so we need to make sure that our policies are actually fit for purpose. So we're looking at expanding it.

Chris O'Keefe

To what?

Senator Bragg

Well, let's see. The Senate hasn't finished its work yet, but obviously it needs to be at a level where people could use their super in a meaningful way in places like Melbourne and Sydney.

Chris O'Keefe

$100,000, $200,000, what's your gut tell you? You know the answer to this. You've been working on it forever.

Senator Bragg

Well, as you know, you need at least $100,000 in Sydney to get a deposit, Chris and so that would need to be considered. And of course, if you get into the market, then over the long term you are much better off than leaving your money in super under almost any analysis. So it is absolutely worth looking at.

Chris O'Keefe

Is Peter Dutton on board with this?

Senator Bragg

Look it's something that the Senate will report on next week, and then there'll be a broader discussion. But I think everyone in the Coalition recognises that the key determinant of your success in retirement is not your superannuation balance, it's your home ownership status, as you said a couple of moments ago. And so we want to make sure that the Australian Dream is still alive, and we think that super can help people get onto that platform.

Chris O'Keefe

Sure, but do you not risk then people just have a home and that's it by the time they get to retirement?

Senator Bragg

Yeah, but the millennials and Gen Zs are on a trajectory never to have a home.

Chris O'Keefe

Yeah, but they'll have super.

Senator Bragg

But as you know, if you're a retired renter on the pension, it's going to be a pretty tough retirement.

Chris O'Keefe

Sure, but I know what you're saying, and I do understand that.

Senator Bragg

We're trying to change the trajectory here, right?

Chris O'Keefe

Yeah, I understand that. And you're giving... Is there money at the end of the day? I completely understand what you're saying, and I do have sympathy for your policy. My question is, if us as a society is giving a tax discount, 15% on whatever you put into super, you're getting that tax discount because it will be used in retirement. And then the idea is you don't draw down on the Commonwealth pension.

Senator Bragg

Sure. It's a nice idea. It's not how it works in practice. If you look at the Intergenerational Report, which looks at Australia in 2062, most of us are still on the pension. So that's after 70 years of compulsory super. So I just say to you, Chris, this Paul Keating dream about super is not going to materialise under any future analysis. And so I would rather that we put the Australian Dream of home ownership at the forefront. I think that's vastly more important.

Chris O'Keefe

Why don't you just do away with it all then?

Senator Bragg

Well, I think there-

Chris O'Keefe

Is there a place for super?

Senator Bragg

I think the idea that government gives people a tax incentive for saving is sound. I'm not sure that putting everything in a locked box for 40 years and saying to young people, good luck, is the right way to go. If you've done all the right things and you've worked hard, you've got a trade or you've been to Uni, and then you start in the workforce, you've got a HECS debt and you've got to pay 11% super, it's hard going getting to $100,000 plus that you need for a deposit in Sydney. Absent to the bank of mum and dad, you're never going to get that deposit for the average person. So super, is going to be for many people as they get into their mid to late 30s, their biggest pool of capital.

Chris O'Keefe

Yeah, okay. But then you get to, say, if you get to 65 under your plan and there is no superannuation in the kitty and you retire and your home is the only asset that you have, do you not put people in the situation where they have to sell that home to sustain retirement?

Senator Bragg

No. The trajectory we're on, even with super, shows that most people are still getting a pension. That's already the reality.

Chris O'Keefe

Yeah, but I understand what you're saying. I know what you mean. That's the trajectory, right? But I just wanted you to address the hypothetical. Will people have to sell their homes regardless because they will need liquidity to sustain their retirement?

Senator Bragg

Well at least they'll have a home. At this rate, there's going to be a lot of people-

Chris O'Keefe

But they'll sell it. So what's the difference? They'll be having to rent anyway.

Senator Bragg

Well, I don't accept that because I think that if you are a home owner, you're in a much stronger position to be on the pension as a home owner than any other alternative scenario. So I think it's been proven that people can manage on that basis. If you're a retired renter on the pension in retirement, I think people will find themselves in a lot of trouble.

Chris O'Keefe

You're stuffed.

Chris O'Keefe

All right, Andrew Bragg. I appreciate your time.

[Ends]