NSW Premier Dominic Perrottet pledges major future fund for kids
Dominic Perrottet has announced a NSW government-contributed future fund worth up to $49,000 will be established for every child aged under 10, if the Coalition is re-elected in March.
Premier Dominic Perrottet has unveiled an $850m plan to give every child in NSW a superannuation-style future fund to buy their first home or pay down the costs of post-school education.
The Liberal’s opt-in future funds will see every child given $400 in a fund when they are born and then the state government will match parent contributions of up to $400 until they turn 18.
With parents allowed to make up $1000 of their own contribution every year, some children could end up with state government funds worth almost $50,000.
With the Coalition asking for a historic 16 years in government, Mr Perrottet was surrounded by dozens of children as he unveiled the policy to hundreds of the NSW Liberal Party’s faithful clad in blue paraphernalia and gathered at the Liverpool Catholic Club in Prestons, in Sydney’s southwest, for the party’s campaign launch on Sunday.
The absence of Peter Dutton and Mr Perrottet’s two predecessors – Gladys Berejiklian and Mike Baird – was notable, as the Premier was greeted by thunderous applause and alternative American rock band Cake’s song The Distance, telling the crowd that three successive Coalition governments had “not wasted a minute in transforming our entire state”.
Yet the attention was on the future fund policy, which Labor immediately refused to back.
Mr Perrottet compared the fund to the nation’s superannuation scheme, saying the announcement was the “most significant financial security investment” in the state’s history at a cost to taxpayers of about $850m over forward estimates.
“This account will help set our kids up for life, by giving them a head start on the two most important things they need to secure their future: buying a home and acquiring the skills and education they will need to succeed in a globally competitive and changing world,” he said.
“I say we must pass on to our kids the gift of opportunity.”
In the under-siege seat of Holsworthy – with new Liberal candidate Tina Ayyad trying to repel Labor’s Mick Maroney – dozens of Liberal Party ministers, MPs and candidates came together to launch the party’s election campaign just 13 days out from the election.
Former prime minister John Howard was the only Liberal luminary present for the launch, with the Opposition Leader, federal deputy leader Sussan Ley and federal opposition Treasury spokesman Angus Taylor absent.
Nor did any of three former Liberal prime ministers – Scott Morrison, Malcolm Turnbull or Tony Abbott – attend the launch.
Under the proposed policy, parents with children aged under 10 will be able to opt in to a future fund, with the government kicking in $400 to begin with and then matching parents’ contributions up to $400 each year until they turn 18.
Parents will be able to contribute up to $1000 a year, which if done every year would see the fund reach about $49,000, under an assumed yearly growth of 7 per cent. If parents decide only to match the $400 contribution, it would reach an estimated $28,500.
Labor swiftly announced they would oppose Mr Perrottet’s scheme, with opposition Treasury spokesman Daniel Mookhey saying the government was ignoring crises in the state’s hospital and education systems in favour of a policy that would take years before families saw the benefits.
“It seems as though the Premier’s grand vision is Australia’s most complicated term deposit,” Mr Mookhey said. “The best thing we can do for kids today when it comes to education is to fix the crisis in our schools.”
Grattan Institute’s economic policy program director Brendan Coates said while the concept of putting savings away to support children's educations down the track was not bad policy, co-contributions rarely worked and generally favoured wealthier families.
“Inconsistent with what the purpose of the policy will be, it largely won’t support better access to universities for lower income families,” he said.
Mr Coates said wealthier families were more likely to be the beneficiaries from the scheme as they had the disposable income to chip into the future fund.
A Newspoll survey at the end of February revealed the Coalition had halved Labor’s lead, with Mr Perrottet strengthening his lead over Labor leader Chris Minns as preferred premier and in satisfaction ratings.
“It is the undisputed truth NSW is a much better place today than it was 12 years ago, and I am proud to say it is Liberal values that made that possible,” Mr Perrottet said.
The future fund will be controlled by NSW Treasury Corporation – with the government guaranteeing a minimum yearly growth of 4 per cent – incurring interest over the period of time. The child will be able to withdraw the funds once they turn 18.
“Imagine right now what you might have done with a $28,000 nest egg to get you started in life. Imagine what that will mean for your children and the peace of mind you will have as a parent knowing that our state is as invested as you are in the success of your kids,” the Premier said.
Children will be able to draw down from the fund only as a contribution towards purchasing a residential property, or on education costs like textbooks, paying down HECS debt, laptops or tools required for veterinary qualifications. For low-income families eligible for the commonwealth’s family tax benefit, the government will contribute $200 a year to each child’s fund.
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