E&OE 

HANNAH WOOTTON:

This super for housing policy really seems like it’s going to be a core plank of the upcoming election platform from the Coalition. And it speaks to a lot of issues, there’s house prices, there’s the cost of living crisis. On that front, how do you see this playing into broader questions around housing supply, affordability, I can’t help but thinking that it’s potentially just going to increase demand?

 

ANGUS TAYLOR:

With so many of these issues, you’ve got to go back to basics, you’ve got to go back to the underlying economics. If you’ve got an elastic supply curve, then demand’s fine. It’s not going to drive up prices. And so, we announced just a few days ago, an incredibly important policy. A $5 billion fund, cracking open those bottlenecks that are preventing the supply of new housing. So, my electorate in south western Sydney, currently out to central western NSW, I get to see a lot of different, from regional towns to outer suburban Sydney, there are a lot of housing opportunities there that are not being delivered. And they’re not being delivered for different reasons as you go across the country – in some areas, it’s water and I’ve got a big development in my electorate where Sydney Water is the big hold up. Some areas it’s planning approvals and some areas it’s power, distribution networks. It’s a whole lot of different things. And this fund is designed to crack open those bottlenecks, to accelerate and get supply going.

We’ve gone across, I won’t quote the exact number because Michael Sukkar’s done this work, but a large number of councils across Australia – and developers – and said to them, what is the thing holding back more housing supply. They’ve come forward to us with specific projects that will get a certain number of houses on the market. And we’ve seen a $5 billion fund, that we believe will deliver 500,000 homes. That will make a big, big difference.

So the supply side is something we absolutely have to nail. But we also think that housing is a really important investment class for most Australians. We know from the Retirement Income Review that the single best indicator of whether Australians have a good retirement is whether they own their house going into retirement. Now, superannuation has, don’t get me wrong, an enormously important role to play in retirement as well. But it’s not one versus the other, we believe in both.

 

HANNAH WOOTTON:

Do you see this partnering with other possible policy changes, I’m not going to go as far as suggesting the Coalition will touch up capital gains tax or negative gearing, but Labor is starting to look more collectively at some of those tax settings. Where do you see your own possible government wading into some of that taxation on the wealth side, that may be contributing to housing issues or stalling that generational transfer of wealth?

 

ANGUS TAYLOR:

I don’t understand how negative gearing on housing has created less houses. It’s an incentive to invest in a house. I’ve got to say, I don’t understand the argument on that. We’ve got a very clear position on that, and you’ll have to ask the government if they’ve got a clear position on it.

 

HANNAH WOOTTON:

On the superannuation front, while we’re on the topic of tax, obviously you did note that in this room there’s some support for that, taxing $3 million accounts. The issues with that tax seem semantic, but they do continuously keep coming up. The big one is the taxation on unrealised gains. Where is the Coalition at on this, and [inaudble] that there might be any solution being reached? We’re conscious there’s not many sitting days left this year.

 

ANGUS TAYLOR:

Well, our position has always been clear, we’ve always been dead against it. We’ve seen two very significant problems with this legislation. One is taxing unrealised capital gains. Now, I think that’s crossing the Rubicon, big time. This is, if we’re living in a world where we have a government that believes it’s ok to tax unrealised capital gains, it’s a government that does not understand how business works, because cash flow matters. And unrealised capital gains are unrealised. They’re unrealised. So you’re going to have to free up the cash some way or another. And it’s why governments around the world have always been very reluctant to go after unrealised capital gains, unless there’s some kind of crazy, left wing Communist dictatorship. So this is really, seriously, crossing the line. It’s absolutely crossing the line. And I think anyone with a good commercial, who understand business, I don't know how you can possibly support it.

The other thing that I think we find really unacceptable, is having the thresholds not indexed. You know, here’s a government that’s overseen price increases that we haven’t seen in a generation, and they’re saying we’re not indexing it. The truth is, that must be because they want to collapse it down so that there’s ultimately two brackets...

 

HANNAH WOOTTON:

And I think they want it to cover more people as time goes on...

 

ANGUS TAYLOR:

Yeah. But it does mean young Australians, a large proportion of young Australians are going to be affected by this. Now, people say that’s not for years. And I say to them, well, superannuation isn’t for years. That’s the point. So I think there’s really, serious problems, in tax terms, with both of those components. And that’s why we’re opposed to it and we’ll continue to oppose it in the parliament.

 

HANNAH WOOTTON:

If you’re elected, is that, is taxing high balance accounts at some level, something that you will not pursue, all together?

 

ANGUS TAYLOR:

Yeah, I mean we’ve already said this is something we’re dead opposed to, as it stands. Peter said that within hours of the policy being announced. That’s our position.

 

HANNAH WOOTTON:

I was hoping for your views on this question we’ve around governance and the regulation of funds. This is something where both Luke, as you said has been engaged, and so has, in the Senate, it’s something Andrew Bragg has been engaged with for some time. Do you have a view on how the governance question at super funds is developing, and being resolved? They’re [inaudible] huge amounts of Australians’ money, are you happy with how it’s being overseen?

 

ANGUS TAYLOR:

Well, I think there’s some very simple principles, some of which I laid out in what I had to say. There shouldn’t be conflicts of interest, that’s important. And they’ve got to be managed very carefully and people in this room will now how well that’s being managed. I think it’s clear there’s got to be transparency. Absolute transparency. Transparency on expenses is something we’ve always supported, and I see a very good speech this morning on this exact topic. And I think transparency on performance.

Look, the benchmarking that we initiated in our time in government I think was a really important step forward in helping people to understand the performance of their super fund. It’s very easy when you know you’re not going to actually need or get access to this money for 30 years to just not take any notice of it. But I think there’s no better regulator of any industry than the customer – the government is usually the worst!

It’s the customer who, given transparency and given a deep knowledge of what they’re buying, what they’re investing in, that can make the calls. And that transparency is unbelievably important, and I think ultimately transparency is always the best way towards better governance.

 

HANNAH WOOTTON:

Just on compulsory super, you caused a little bit of a stir a week or two back, where you gave a speech that referenced other overseas models of superannuation, retirement income, that you might be looking to pick up some lessons from. One that you drew out was the US system which then caused a flurry of suggestions that perhaps you were open to make superannuation non-compulsory. Is that something that’s on your radar?

 

ANGUS TAYLOR:

You know, one of the things, beware everybody in the room, Labor is going to run endless scare campaigns for the next, however many months. Fake news. I mentioned those countries again today. The point I made in that speech and the point I made today is that there’s a whole range of other countries that allow you to invest in your house from your pension schemes. And one of those is the United States, there’s others as well. I don’t think that’s a controversial point, it’s a statement of fact. But, beware of scare campaigns because Labor’s running out of things to do here. It’s not going well for them right now. So they’re going to run scare campaigns.

 

HANNAH WOOTTON:

Regardless of how Labor packages it, there’s no plan to...

 

ANGUS TAYLOR:

No, no [inaudible]. I don’t think I could’ve been clearer in that speech, I’ll be clear again.

 

HANNAH WOOTTON:

A lot of people raised it at the time.

 

ANGUS TAYLOR:

There’s a lot of people who would love to run a scare campaign and will make stuff up. And it’s unfortunate, and I’m not accusing you of that, of course.

 

HANNAH WOOTTON:

I know you’re not accusing me, and would I accuse of the Coalition of a scare campaign as well? We won’t go into the fact everyone plays that game. A question from my colleague Michelle. She’s asked is the Coalition committed to keeping the super guarantee rate at 12%?

 

ANGUS TAYLOR:

Yeah there’s no, we’re not proposing changes to that.

 

AUDIENCE:

Luke Barrett, Gilbert and Tobin. Really interested hearing your comments on the five drivers of wealth creation and the role the super industry has in relation to all five, it’s an industry which does a lot. Very interested too in your comments and observations going back to 1992 and 1993 when compulsory super was introduced and what the original intention and purpose might’ve been. Fast forward, take 30 years, there’s a new formulation of the purpose of super which is with the Senate at the moment, and I think that current 2024 statement of purpose is used by the other side of the debate to oppose the idea that super can be used to purchase a first home. I’m interested in hearing your comments, do you see the Coalition’s proposal as being consistent with the 2024 statement of purpose, or inconsistent but justifiable because of what was said in 1992 and 1993. And if you see it as consistent, do you think it’s interesting that we’re getting behind a statement of purpose which can be utilised to take diametrically opposed positions?

 

ANGUS TAYLOR:

Look, of course we see it as consistent otherwise we would’ve opposed it, but we do think it’s consistent. But more broadly, just look at the asset base of the economy. I mean, housing and owning your own house is a big part of the asset base. And it always seemed to me to be a bizarre proposition that I can use my superannuation to invest in anybody's house except my own, which is the situation.  But others will use what they might, I’ll just remind everyone in the audience that it was Labor, who back in 1993, supported home ownership being part of superannuation and that’s an important part of history.

 

HANNAH WOOTTON:

That was something Labor put forward in 93. They quickly reversed course in 94 [inaudible] and they’ve stuck, since then, for 30 years of not supporting it. Do you think, is it kind of a fair call to say this was Labor’s [inaudible] all along?

 

ANGUS TAYLOR:

Well, it was an election commitment. Now it’s true, election commitments seem to be getting devalued right now but it was an election commitment. And a very fundamental election commitment. It was an important election commitment. Remember, the 1993 election, that was not one that people expected Labor to win. But they did and this was an important promise as part of that.

Look, the final comment I’d make on this is I have huge respect for the superannuation industry and the investment industry more generally in this country. You play such an important role, you are custodians of investors’ money. You are capital allocators. And the impact of that for Australians is unrivalled, really. I mean, it’s enormously important. But, the KPI for the industry shouldn’t be funds under management.

The KPI for the industry is to deliver great outcomes for its members. They want, and they will have, a broad portfolio. And they should. And that will include home ownership. And it’s incredibly important that it does. And that’s why I think this debate, and what we’re proposing here is pretty measured, it will never be an overwhelming part of investment portfolios of course it’s not possible that that will be the case. But it’s measured, it’s balanced and I think it’s consistent with what we’re all trying to achieve, by delivering Australians a really good retirement.

 

ENDS.