Bill Kelty warns Morrison’s super policy will increase house prices

The former ACTU secretary says the Coalition‘s super policy will drive up house prices and deplete the savings of workers.

Former ACTU secretary Bill Kelty. Picture: Aaron Francis

Former ACTU secretary Bill Kelty says the Coalition’s superannuation policy will drive up house prices and deplete the savings of workers, denying them a decent retirement.

Mr Kelty, one of the architects of compulsory superannuation, said the Coalition had already ­depleted workers’ superannuation by allowing them to make withdrawals during the pandemic.

He said if workers took out $20,000 of their superannuation to fund a home deposit, they would be losing $30,000 because of the compounding impact.

“Fresh from giving the worst fin­ancial advice during the pandemic, they want to do it again,” he told The Australian.

“(Workers were told in the pandemic to) take your $20,000 in super and go buy yourself a car.

“They have put $20,000 into a car and lost $30,000 in super. Go and buy a big TV. Instead of costing $3000, it will cost you $5000. If they were financial advisers, they’d be run out of business. It’s cynical. It doesn’t work.

“They have won first prize for political farnarkling in this election. Having caused the problem by GST increases on homes, participated in a generation of ­neglect, and presided over a very long period where real wages have not increased, they have called on ­people to solve the problem by raiding their retirement savings.”

Mr Kelty, who was ACTU secretary from 1983 to 2000 and a co-architect of the Prices and Incomes Accord, said if employer superannuation contributions did rise to 12 per cent, then super funds should have a direct role in housing to increase supply.

“If you are going to 12 per cent super, then the super funds have got to realise there is one missing link here,” he said. “They have got to establish an investment class called affordable housing and be co-owners and providers of rental properties. You have got to increase supply. That’s the problem, and the super funds should be prepared to be involved.”

He said the Coalition policy was “10 per cent right, 90 per cent wrong … There is the sentiment there which is people get access to their own money for their own home but the truth of it is all it does is force up the price, it doesn’t ­increase the supply.

“People are not better off over the long haul,” he said.

“The second thing is you just deplete people’s super. They will struggle to put the money back in. It has a very big long-term impact.

“It is workers’ money but it’s workers’ money for a decent retirement. You whip it off a young person, they get nothing but the pension. That’s not good enough for this country.”

He said the claim by conservatives that the super funds were “union-controlled” was nonsense.

“Since we developed the industry funds, what’s happened to the rate of unionisation? If they were union-controlled, they are the worst controllers for the benefit of humankind,” he said.

“They don’t like it because it’s not their idea. They don’t like the compulsory nature of it. They don’t like the compulsory nature of anything, be it super, minimum wages or healthcare.”

He said the Coalition focus on superannuation and its criticism of Labor’s support for a 5.1 per cent minimum wage rise showed the government was “finished”.

“When you want to run a campaign in the last week about two things – denying low-paid workers a 5 per cent wage increase as a philosophical thing and when you want to reduce superannuation as a philosophical thing, they are playing on old turf,” he said.

“They are not playing on the turf on which you think they are going to win. This is not them in the last week saying, ‘Be frightened of the taxes’, like the last election … This time they are playing on Labor’s turf. It’s not a good place for them to play.”