Interview with Michael Rowland ABC Breakfast
16th May 2022
MICHAEL ROWLAND: Senator Hume, good morning to you.
JANE HUME: Good morning, Michael.
ROWLAND: What do you say to the super funds who say this is going to pay peter and rob paul down the track in terms of access to retirement savings?
HUME: Michael, we would expect the super funds to push back on a policy like this. In fact, the super funds have pushed back on almost every Coalition policy that we've had in superannuation over the last three years, whether it's been to introduce choice, whether it's been to introduce transparency, lower fees, remove insurance premiums from people that are under 25. They've pushed back on every single one of them and it's a pretty obvious reason - the super funds make $30 billion a year from your superannuation savings. Anything that removes money from super will reduce those fees for the super funds. But we have to keep remembering this is your money, it's not their money. It's not the government's money, it's individuals' accounts and they should be able to do what they need to do in order to create economic security in retirement, but also throughout their working lives. They're already saving $1 in $10 of everything that they earn going into superannuation. This just helps them also buy a house as well as save for retirement.
ROWLAND: it's not just super funds. A lot of respected economists are a bit unhappy with this, including Saul Eslake, a prominent independent economist. He says your policy makes him it want to scream - his words - because he says there is 60 years of history showing that by doing this, by promoting demand for houses, will drive up house prices but not extend housing ownership in Australia. What do you say to people like Saul Eslake?
HUME: Well, Saul Eslake already owns a home, in fact, he probably owns more than one. When Saul Eslake was buying his first home, it didn't take that many years to get together a deposit, but interest rates were higher. Now interest rates are much lower, but getting together a deposit can take up to a decade. This policy will allow people to dip into their superannuation savings temporarily, take it out to help them save for a deposit on a home but then when they sell the house, they put the money back into superannuation, plus any capital gain that they've already made. So it helps them improve quality of life in their working life, giving them security of owning their own home, and stability, but also then they save money for their retirement as well.
ROWLAND: You're asking young people, though, to make something of a bet, aren't you? And that is a bet that capital gains, when they sell the house down the track, will outweigh the magic of compound interest in superannuation over the years, and other returns?
HUME: Actually, over the last 17 years, on average house price have gone up on average around 4.5 per cent, a conservative superannuation fund has gone up around 4.8 per cent. But there are also a lot of other benefits from owning your own home, particularly if you can use a larger deposit, you can reduce the amount of interest and principal that you pay off on that loan. So, actually, it's a win-win at both ends. Today and tomorrow.
ROWLAND: So, how popular do you think this will be for young home buyers? Many are sensible, they are looking 40 or 50 years down the track in terms of their retirement savings as well?
HUME: I think people will see this as an extraordinary opportunity to bring forward decisions that they were already making, but in a very sensible and measured way. Banks will still do a credit check. You still have to have saved at least a 5% deposit. But this will just hasten your decision to get into your first home and bring in that security and that stability that comes with Homeownership. Plus, of course, we know that owning your own home is one of the biggest indicators of economic security in retirement. So, it's actually good for your retired life as well as your working life.
ROWLAND: Ok, the Prime Minister began the campaign by telling voters essentially, you may not like me, but you've got to respect my style and the way I get things done. On Friday, he has acknowledged that people - a lot of people don't necessarily like his style, and he's promising to change if the Coalition’s re-elected. Jane Hume, are the focus groups that bad for the Coalition?
HUME: I just wish that all of Australia could have been at the campaign launch yesterday and seen the Prime Minister's energy, his humility, but also his enthusiasm and his plans for the economy, his plans for the economy and for the future.
ROWLAND: But then why should he change, as he says, change his style, change his style of government, change his approach, at this stage in the election campaign?
HUME: Well, in the last three years - which is when we've all seen Scott Morrison at work - have been some of the most difficult this country has ever seen. We've seen bushfires, floods, a global pandemic, a global recession, then a war in Europe, and now geo instability in our own region. The Prime Minister has had to step up and be a leader. He even said that he's been a bulldozer, I think was his phrase. And he's had to be. But he also has many other gears, and I think that yesterday - and what he's promised - is that here there will be an opportunity for Australians to see that, to see his more empathetic side. But for the last three years, Australia has been looking for a leader at times of great uncertainty, and Scott Morrison has demonstrated that.
ROWLAND: He didn't step up at the bushfires, he left the country to go to Hawaii.
HUME: I think that everybody knows that he has apologised for that, he said he shouldn't have done that. But the global pandemic - that's the test of a man, and he has stepped up and been a leader at a time when we needed him most, when there was incredible financial uncertainty, incredible uncertainty around our health, and our outcomes speak for themselves. A 4% unemployment rate, vaccination rates higher than we've seen in most advanced economies, and growth higher than most advanced economies.
ROWLAND: Can we expect to see Scott Morrison 2.0 visiting seats like Kooyong this week?
HUME: The Prime Minister will campaign everywhere and anywhere. There are 151 seats around the country. He's got an awful lot to get around.
ROWLAND: Your good friend and colleague, Josh Frydenberg, the current member for Kooyong, is in a bit of trouble. Can we expect the Prime Minister to visit Kooyong this week?
HUME: I think Josh Frydenberg is doing ok in his electorate of Kooyong. Certainly, there's an onslaught from the teal independents and all their supporters. Not necessarily those just in the electorate. I think the teal independents are attracting people from outside their own electorates.
ROWLAND: And the Liberal Party doesn't get volunteers from outside electorates as well?
HUME: Well, the Liberal Party works where we need to work. We work as a team. But we work as a team.
ROWLAND: Why is the Prime Minister avoiding seats like Kooyong, like Goldstein, like north North Sydney, like Wentworth? Is he that toxic on the ground there?
HUME: The Prime Minister is going where he needs to go to campaign on the ground, to get those seats across the line and he’s doing a terrific job. I've never seen someone with quite the amount of energy as Scott Morrison. Except maybe Tony Abbott when he did that 48-hour campaigning trip. Scott Morrison is everywhere. If you had have seen him yesterday, Michael, I've never seen someone with such enthusiasm and energy for the campaign.
ROWLAND: Ok speaking of candidates, your candidate for McEwan, Richard Welch, questions have been asked about whether he lives in the electorate, whether he gave a false declaration to the Australian Electoral Commission? What's the story there?
HUME: I don't know anything about that, other than Richard Welch is a fantastic candidate for McEwan, he’s doing a terrific job on the ground. He's an experienced candidate.
ROWLAND: Are you asking him whether he gave the right address to the Australian Electoral Commission?
HUME: That's the first I've heard of it today, Michael. But he's a fantastic candidate. He's doing a terrific job and I really wish him well. We are seeing a shift in McEwan, which is terrific news for the Coalition. I think there's an awful lot of families out there that really suffered during the Dan Andrews lockdown, those new communities where they were only allowed to move in a 5km radius, suffered from the curfew, and there weren't any shops within a 5km radius, and they haven't forgotten that pain.
ROWLAND: We'll find out what the voters think on Saturday. Jane Hume, thank you for coming in.
HUME: Great to be with you Michael.