MARK LEVY: Well we’ve been talking about the first home buyer’s scheme that’s been announced by Prime Minister Scott Morrison and given the response I’m getting this afternoon and right across the network today, it is being well received. I think it’s a cracker of an idea. Let’s bring in Senator Jane Hume, who’s the Minister for Superannuation. And the Minister joins me on the line right now. Minister, good afternoon to you.
JANE HUME: Great to be with you, Mark. I’ve had the same response as you. We’ve been mobbed by people who have been enthusiastic about this policy.
LEVY: Well, let's talk it through, Minister, because I think there's no doubt a lot of people driving home, they may even have kids in the car saying, gee, this sounds alright. For those people that have been struggling to enter the housing market, how is this going to help them?
HUME: Well, this policy is all about getting Australians into their first home sooner, by allowing your super savings to invest in your first home. So you take money out of super to put together your deposit much faster. And it actually reduces the amount of interest and principle that you pay off on your loan too. And then when you sell your house, you put that money back into superannuation, plus any profits that you make on that amount that you've taken out of super. You're allowed to take out either 40% of your superannuation or up to a maximum of $50,000. It doesn't matter what your income is, it doesn't matter what the value of the property is, it doesn't matter how old you are, as long as you're buying your first home. It's all yours, your super fund helps you buy it. Certainly the government doesn't own your home, you own your home.
LEVY: And that's the thing, isn't it, that this is what I love about this, we own super, it's our money. It's been run by, you know, industry super funds or wherever you've got your super, whereas we take control, we can use this money to enter the housing market if you're buying your first home. And then if you decide to sell that home, the money you use, then gets paid back. So it doesn't really affect anyone and it doesn't affect the bottom line.
HUME: Well, that's exactly right. You know, you're already saving a lot of money, you're saving one dollar in ten of everything that you earn and putting it into superannuation, potentially locking it away for up to 40 or 45 years, if you're very young. This allows you to crack open your superannuation to help you make that really important purchase of your first house, which we know owning a home is one of the best indicators of economic security, both in your working life and in retirement.
LEVY: One of the criticisms from Labor on this, and their housing spokesman Jason Clare claims it's the last desperate act from a dying government and this would increase property prices, wouldn't the Labor housing policy do exactly the same?
HUME: Well you'd think so, except they'd be increasing property prices, and they would also own 40% of your house. So that's a lose-lose situation, I would imagine. The most important thing is that we've announced this policy alongside some supply-side measures. So if you're an older Australian, you're an empty nester and you're looking to downsize your property, you can now do that as early as age 55. And you've got two years to get your affairs in order where that won't be included in the assets test and won't affect your pension. So that should open up the property market and put some more family homes onto the property market for people to look at.
LEVY: I know the Prime Minister has been out and about today, Minister, he said he simply doesn't agree with the assertion this would have a negative impact. You have to look at the balance of policies that this is addressing. It deals with supply and it deals with demand. And the same criticisms have been levelled at every single housing policy that he's brought forward. And on every occasion they've proven to be wrong on those criticisms. I guess my question here, though, Minister is why have we waited to until a few days out from the election to announce what a lot of people think is a great idea. Why wasn't this announced in say week one, week two of the election campaign?
HUME: Well, this is a great idea. And I think that getting the policy, right, making sure that it's calibrated just right, so that you have the quality of life now by getting into your home but you're also making sure that you are putting that money back into your superannuation savings and earning the returns on that money from the growth in value of your house – that's what's most important about this policy and why it's different from anything else that's ever been proposed before.
LEVY: But do you understand where I'm coming from, Minister, do you understand and see where I'm coming from? I mean, you know that this has been a pretty nasty campaign. There's been a lot of personality attacks from both sides of politics. I just sit here and I know Ray Hadley said the same this morning, Ben Fordham, my colleague, Deb Knight as well, that the Prime Minister could have used this early days to get plenty of love, to get a few voters across to his side of politics, whereas you've sort of left it a little late to say, well, okay, this is what we're going to take to the election. But that elections coming up on Saturday.
HUME: Well, I think there's still plenty of people that will be voting this week and voting on Saturday that this policy will really appeal to. I don't think it would have stopped the character attacks. This has been one of the nastiest campaigns I think I've ever fought. I've never seen such character assassinations from the opposition as I have in this campaign. But good policy will win the day.
LEVY: All right. Let me ask you this, because this is one of the questions that I seem to be getting on the text line and the open line. When you sell this house, you have to put the money back into super. So a question a lot of the listeners are asking is do you have to pay capital gains on that as well?
HUME: No, because you don't pay capital gains tax on your owner occupied home. So you don't have to pay any capital gains capital gains tax on the money that you put back into super.
LEVY: Okay, that's good news and hopefully answers a few of the questions out there. How are you feeling about this election coming up on Saturday? It's been a long, few weeks, but we're nearly there.
HUME: Really good actually. I'm pumped. And I was at the campaign launch yesterday, the Prime Minister was there. He was really enthusiastic, massively energetic, he's ready to fight it out this week. I actually think that the quiet Australians haven't spoken yet. In 2019, they came back with a roar. I think they'll come back again with another roar this time around.
LEVY: Alright, Minister, thank you very much for your time and explaining this new scheme. I think it's a win win for all concerned and good luck Saturday to the Federal Government. Hopefully, thanks for your way. Appreciate your time.