Interview with Thomas Ortiti on ABC News Radio

Thomas Oriti

But first, this half hour, the Federal Government has been frustrated in the Senate this week, failing to get its ‘Help to Buy’, a housing scheme, through the chamber. The idea behind that is that the government would take part ownership in a house or apartment, making it easier for low-income earners to buy their own place. Well, the Coalition says it's super to buy policy, is a better option. That would allow people to access their retirement income early to buy a home and get enough to afford that deposit. Well, a new report has found that plan would actually heavily favour older and wealthy people, those with higher superannuation account balances. Andrew Bragg is the Shadow Assistant Minister for Home Ownership, who joins us now from our Canberra studios. Good morning, Andrew. Thank you for your time.

Senator Bragg

Thomas, how are you?

Thomas Oriti

I'm well, thank you. How does your policy tip the scale in favour of first home buyers and not simply push the price of homes higher?

Senator Bragg

Well, the bank of Mum and Dad is becoming the sixth biggest lender in Australia, and that's a very worrying trend. Everyone has superannuation, pretty much, who works. We want to open up superannuation for people to use that as a first home deposit because that is the key to a safe retirement. The bedrock of a safe retirement is a house, not a superannuation balance. That's why we prioritise housing over super.

Thomas Oriti

Just for people who might not be across the plan, your policy allows people to withdraw up to $50,000 of their super, to a limit of 40% of their superannuation balance, with the aim of helping them buy their first home. But who's set to benefit from this policy the most? One would argue younger Australians are finding it difficult to get into the housing market. They also have low superannuation balances.

Senator Bragg

Well, if you look at older millennials, for example, a 38-year-old has an average balance of $90,000. That is a person who may want to use this policy, and this is a choice that would be available to them. At the end of the day, this is the people's money. Labor describes this as raiding your retirement savings. I mean, this is people's money that they've earned from working. If they want to use it for a first home, then that is entirely reasonable. We're in a position now where Gen Zs and millennials are on a trajectory not to own a house. We want to make sure that the Australian dream doesn't slip away from them.

Thomas Oriti

I guess the point made today in this report, and yes, I do know that it's commissioned by the Super Members Council. We had Saul Eslake, who looked at the data earlier, and we put that to him, this argument that hang on, if they're paying you to do the research, not removing your super, surely that benefits the very organisation who paid for this research. We put that to him. He said, okay, sure, but I've been saying this stuff since 1980. But looking at the numbers, he argued, is this relevant anyway? I mean, a single person aged between 24 and 34, which would arguably… 25 and 34, arguably, they're the people who probably find it hardest to get into the housing market. They could only withdraw about eighteen grand if they were a couple. That's nowhere near that mark of $50,000. How would that help them buy a house?

Senator Bragg

Well, asking the super industry what they think of super for housing is like asking Dracula what he thinks about the blood bank.

Thomas Oriti

Sure. We did put that to Saul, though, and he said, I've been saying this stuff for a long time, though. Yes, they commissioned this research, but I've been saying this for 40 years.

Senator Bragg

Sure. But to your point about the average balances, as I just said, if you're 38 and your average balance is $90,000, then I would have thought that a $50,000 threshold would be quite appropriate in the sense that you could take out $50,000 and put it into a deposit for a first home. So, I'm not really sure what he's talking about there.

Thomas Oriti

I guess his point is the more money you've got in your super, the more you could take out of it to buy a home, and that would benefit wealthier Australians. It would allow them to spend more money on housing than they would otherwise, and that would price younger people out of the market who can't take that much out.

Senator Bragg

Well, I don't accept that because it's an $11 trillion market, and most economists would say that that is not going to make a material difference to the overall market position in terms of prices. So, I would say to you that unless you've got access to the bank of Mum and Dad, this is your best chance of bridging the massive deposit cliff, particularly in a big city like Melbourne, Brisbane, or Sydney. If you are that 38-year-old and you can take out $50,000, that is going to be your best bet.

Thomas Oriti

The Mum and Dad, the bank of Mum and Dad argument, which you brought up a bit, surely those Australians who don't have access to the bank of Mum and Dad, they wouldn't have a large pool of superannuation funds to dip into either.

Senator Bragg

Why do you say that?

Thomas Oriti

Well, I mean, based on the age of the people, simply by the age of the people trying to access the housing market, the younger you are, the lower the super that you've got.

Senator Bragg

Yeah, but I understand that's what the super industry is saying in their commissioned reports. But as I say, but the ABS says, the average 38-year-old has 90,000 bucks in their super.

Thomas Oriti

Yeah, but when we're talking about a hot housing market, with single—and double-digit thousands to take out of it, will that actually make a difference in terms of buying a house?

Senator Bragg

Well, of course, it will. Even in Sydney, if you could take out $50,000…

Thomas Oriti

In Sydney, in a hot housing market like Sydney to make a difference?

Senator Bragg

No one's saying that the super withdrawal will be your whole deposit, but it will help you get there. That's what we've always said. At the end of the day, if you can take out $50,000 to help you get a first home deposit to buy that first flat or buy that first house, I think that is an entirely reasonable policy. The super funds are just so desperate to keep all our money under a lock and key for 40 years that they will do or say anything and commission anyone to say anything.

Thomas Oriti

We have put the fact they commission that research, to Saul Eslake. I'll make that point. Can I just play you just a quick snippet of him because he says providing this relatively small amount of money is like providing a first home buyer's scheme, and that doesn't work to help people secure a house. This is just a quick snippet of what he said earlier.

Saul Eslake

We now have 60 years of evidence, going back to the first homeowner's grant scheme introduced by the Menzies government in 1964, that says anything that allows Australians to pay more for housing than they'd be able to otherwise, results in more expensive housing rather than higher homeownership rates.

Thomas Oriti

Saul Eslake there, he commissioned that data. I think we've made that point to him about who commissioned this report. But is 60 years of evidence conclusive enough to say things should be done differently?

Senator Bragg

But this is not a grant, Thomas. This is people's own money, and they've been forced to save it into a vehicle under legislation. Our policy is that they can leave it in super or they can use it for a first home deposit.

Thomas Oriti

Can I ask you as well, because this has obviously been political.

Senator Bragg

This is pretty desperate stuff from them.

Thomas Oriti

Yeah, well, it's different to a grant, but I guess the grant support is from the government rather than tapping into your own money.

Senator Bragg

Well, it's your own money. I mean, the whole idea of Labor saying that you're raiding your own money. How do you raid your own money? You use your own money.

Thomas Oriti

Can I ask you just quickly, why not work more constructively with the government and try to get some form of compromise on housing policy? Because both your Party and the Greens, it seems like they'll continue to be accused, yes, of those opposite of trying to whip up political leverage on this ahead of the election. We could end up in a situation where nothing's done.

Senator Bragg

The government wants the super funds to be given tax concessions and other handouts to be able to invest in the housing market as institutions, but they don't like the idea of them doing it as individual people. That makes no sense to me whatsoever. All the while, the government is governing for vested interests, so it's going to be very hard to find a compromise with them. More broadly, their policies on ‘Help to Buy’ and the like are just policies that are effectively giving up on home ownership. Look, we've always had home ownership at the core of our offering, going back to the Menzies years, which is why we make no apology for allowing people to use their own money to get into the first home market.

Thomas Oriti

Andrew Bragg. It's great to have you on. Thank you very much for joining us.

‍