Andrew Bragg has accused super funds of wanting to maintain the status quo for profit, comparing them to “Dracula and the blood bank”.
In a recent interview, the new shadow assistant minister for home ownership reiterated the importance of allowing Aussies access to their super for the purpose of getting onto the first home ownership ladder.
Bragg, who is well known for his insistence on a radical overhaul of superannuation, told 3AW radio this month the Coalition will develop a policy that allows access to super for a first home deposit and enables an increase in the supply of homes.
Responding to questions regarding the policy’s possible inflationary impact on the price of houses, Bragg accused the superannuation funds of running a scare campaign.
“The super funds are against this, so they’ve commissioned dodgy modelling which says that it will massively inflate the prices, but [for] most of the independent economists, they would have a marginal impact or no impact at all,” the shadow minister said.
“Obviously, there’s a lot of vested interest against this policy because, of course, the super funds earned $30 billion in fees each year, and so they love the status quo where everyone’s money is locked up for 40 years and they can charge high fees on it like Dracula and the blood bank. But the reality is that for an older millennial, let’s say, 38-year-old Millennial, they have an average balance of about $90,000. In a market like Melbourne, that would do a lot of the heavy lifting towards a deposit.”
Arguing that “the key determinant of your success in retirement is not your super balance, it’s your [home] ownership status”, Bragg said the Coalition wants to make sure younger generations “can get into a home”.
“That’s going to provide more shelter and more security than a superannuation fund,” he said.
“I think that there will be more pushback on this perverse situation that super can invest in any house except for your own. And that is a perverse rule in a country which believes in first home ownership or believes in home ownership. We’ve always had a system where people could have a house of their own, and the super system was introduced at a time when people mainly did own their own house, but now we’re seeing a decline in home ownership among Millennials and younger people.”
Earlier this year, Bragg called for a new Financial System Inquiry (FSI) to expose and remedy significant “structural issues” that pose risks to the nation’s economic standing, job market, and innovation.
This review, he noted, would also test the influence the superannuation system has on the economy, tax considerations, and housing challenges.
The last FSI occurred almost a decade ago and is considered by some as instrumental in recommending reforms that significantly shaped Australia’s financial landscape.
