Speaking at an event hosted by PritchittBland Communications in Sydney on Thursday evening (27 January), the shadow assistant treasurer and the shadow minister for financial services and superannuation, Stephen Jones MP, outlined that more tailored and sophisticated solutions were needed to help improve housing affordability in Australia.
While the Morrison government is currently undertaking an inquiry into housing affordability in Australia, given that a federal election is expected to be held in May, the Labor MP was asked what the Australian Labor Party’s stance was on the role that the family home and housing had in the financial system.
In response, the member for Whitlam outlined that while retiring Australians should be able to live off the value of the equity in their homes (and be facilitated to achieve that), they should not be mandated to do so.
However, he added that much more is needed to be done on making more homes affordable to more people, suggesting that the Labor Party believed a multipronged approach was necessary to reduce the barriers to home ownership.
Mr Jones elaborated: “I want to see the next generation of Australians who are in their 20s and 30s to be able to find a house that they’re able to live in, or a home that they are able to live in, within an hour of the CBD.
“It’s beyond trite to say it [the housing affordability problem] is a supply issue. It is in part a supply issue. It’s also an ownership model issue. It’s also about removing obstacles to downsizing. It’s a whole bunch of things that need to be looked at and I’ve been working closely with my colleague Jason Clare [shadow minister for regional services, territories and local government and shadow minister for housing and homelessness] on it.
“So, I think if you’re looking at it from a ‘putting-a-roof-over-every-Australians-head’ frame, which is what Labor does, bespoke solutions are needed for people in different demographics, in different points in their life.
“There are Australians who will never be able to own a home [and] we need to ensure that they still have a roof over their head, [and] secure a roof over their head.
“There are Australians who – under the existing arrangements or the existing financing arrangements – will never be able to buy a home. We need to provide some creative financing, ownership solutions and ownership model solutions for them so they can get a start in the housing market.
“And then there are Australians who… would be reluctant to move from their existing home to one that was more appropriate to them.
“Some of the [solutions] are levers at a federal level and some of them aren’t.
“I think we’ve had so many snappy answers in the housing space – whether it’s raid your super, or this or that – but when you look at it deeply, [you need] different solutions for different demographics.”
Indeed, the shadow assistant treasurer was critical of the notion of using superannuation savings for housing deposits, which has been pushed by various Liberal politicians in the recent past – including MP Tim Wilson and senator Andrew Bragg – who have touted the idea as a solution for first home buyers struggling to enter the property market.
The Morrison government also introduced the First Home Super Saver Scheme (FHSSS) in 2017 to enable prospective first home buyers to save for a deposit inside their superannuation and then withdraw their voluntary contributions, along with associated earnings, to help them purchase their first home.
The COVID-19 early release of superannuation scheme, which allowed up to $20,000 to be accessed before retirement to people facing financial hardship due to the pandemic, also saw more than a quarter of released funds used for mortgage repayments in 2020.
The member for Whitlam suggested that the current government was expecting superannuation to “provide so much ballast and support” to a range of issues.
He explained: “We were battling the pandemic and, at the same time, there was a war going on superannuation at every level of the three pillars of superannuation; the inputs through the Superannuation Guarantee levy; the preservation rules… superannuation [was] being called upon to answer everything from smallpox to university debts. And there were some really wacky crazy ideas…
“What was different this time around though, is that they were seriously being considered at the highest levels of government. In the past, we’ve had Treasuries of all sides whack them away and point out the nuts of some of the propositions; whether it is super for housing, super for domestic violence or super for this or super for that – we’ve had Treasurers say: ‘No, this is just crazy, think about it for 10 seconds and you will see just how nutso it really is’. This time around it was seriously being considered; Fact.
“The war on superannuation as an institution and those who are responsible for the governance of it... We didn’t need it. It actually detracted from some serious policy debates that we needed to have around all of those things; around inputs, around governance, around capital deployment. At a time when we should have been having serious debates around that, the whole bandwidth was being directed around the existence of the system as a whole.
“For somebody who’s deeply fascinated and engaged and passionate about the sector as a whole, I’ve been incredibly disappointed because I think there were lost opportunities and a bunch of things that we could have done that would have made the recovery stronger, and the duration of the economic impact a lot shorter.”
Later in the event, the shadow minister for financial services and superannuation also told Mortgage Business sister brand The Adviser that the Australian Labor Party had no intentions of changing the current broker remuneration structure, adding that commissioner Kenneth Hayne “probably wasn't right” on his recommendation to move to a consumer-pays model.
[Related: Housing values grew 22.1% in 2021]
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.