Interview with The Project on Channel 10

Subjects: Home Ownership, Super for Housing

E&OE………

Waleed Aly

…Opposition Housing Spokesman Andrew Bragg is with us now. Andrew, every policy it seems that we've tried that tries to put more money in the hands of people who want to buy their first home ends up having the overwhelming effect of just increasing house prices. That's the major consequence of this? Why would this be any different?

Senator Bragg

Well, fundamentally, we need to build more houses. You need more supply. But you also need to allow people to use their own money to buy a house. The key determinant of your success in retirement is not your superannuation balance, it is your home ownership status. So we want to make sure that people can get access to a home by using their own money.

Sarah Harris

But aren't we putting the cart before the horse here? I mean, isn't the problem that we've got a critical shortage of houses? We need to increase supply. We need to do that first.

Senator Bragg

Well, you can do all of the above. I believe that we need to build more houses, which is the supply piece, but you also need to find a way to tilt the scales in favour of first-home buyers. That's where super comes in. But that's also where we need to look at the lending laws and the cost of regulation, because if first-home buyers can't get a mortgage, they can't get a house.

Waleed Aly

But isn't the point this doesn't tilt it in their favour? Because what it does is it puts more money in the hands of everyone who's bidding. The end result is you get a higher bid...

Senator Bragg

Well it does...

Waleed Aly

And people struggle to be able to buy the house they were after anyway. It just cost them more if they managed to get them into the market.

Senator Bragg

As I say, you need to build more houses. That's a key part of the solution. But all the independent economists that haven't been bought off by Big Super would say that allowing people to use their own money would have a small impact on prices. But what it would do for people, for example, in their mid-30s who are a couple, this is probably the sweet spot for the policy, it would allow them to get onto the ladder of home ownership, which is incredibly hard in cities like Melbourne and Sydney. It's absolutely worth having as part of the debate.

Waleed Aly

Bought off seems like strong language, but let's talk about the Reserve Bank, who I assume hasn't been bought off. They spoke about those who withdrawn $20,000 during COVID, when they were allowed to do that for emergency measures. They estimate that they lost about $120,000. If you withdrew $20,000 you lost $120,000 in retirement savings. With this plan, and I take it you're not a fan of superannuation, but with this plan, wouldn't we see superannuation accounts being drained? Then ultimately, the government having people who might have bought a house, but they have no money, and now they're going to be on the pension instead of being self-funded in retirement. The government's going to have to fund all that.

Senator Bragg

Well, the idea that superannuation is the only vehicle for retirement is very narrow thinking. I don't think Australians are stupid. I think people can organise their own retirement. For many Australians, the best retirement plan is to actually have a house. What I'm trying to stop is the trajectory where millennials and Gen Zs will never own a house, and they'll be locked into having super. But as I say, the key determinant of your financial success in retirement is actually your home ownership status. If you are a retired renter on the pension in retirement, you're going to have a very hard time. I would rather see us retain the Australian Dream. I think that is the most important objective here.

Waleed Aly

Andrew, thank you so much for your time.

Senator Bragg

Thanks a lot. See you.

[Ends]