The government split over the idea of allowing people to use their superannuation to buy houses has turned into yet another divide within the government along moderate/right lines. Behold the list of backers of the idea, at least according to The Australian: Tony Abbott, Michael Sukkar, Zed Seselja, Craig Kelly, Angus Taylor. All from the Liberal’s right faction. Right-wing LNP minister Matt Canavan backs the idea too.
The idea is quite profoundly dumb, given it would involve yet another wealth transfer from young people to older Australians and further accelerate house price growth. It has received near-universal condemnation from the superannuation sector, the property sector and economists — and even by the Prime Minister and the right’s own Mathias Cormann (the one senior minister with political judgement and a functioning brain). So why is it being pushed?
You could argue that it’s still another front in the right’s war on Turnbull, but there’s an interesting clue in the work of one of the right faction’s favourite mouthpieces, The Australian’s Simon Benson. On Monday, Benson led heavily with a gushing prediction of an astonishing “cradle to the grave” housing affordability policy in the budget, only for internal opponents of Treasurer Scott Morrison to emerge rapidly and kick the “package” to death the following day. But in a comment piece accompanying his effort on Monday, Benson, who as a policy analyst makes a fine stenographer, justified using super for housing on the basis that super is simply people people ripped off by “union-run funds”.
A somewhat chastened Benson returned to the theme today, to again devote a column to justifying using super for housing. It’s riddled with too many errors and inconsistencies to detail, though our favourite is his claim that it would reduce the cost of the age pension to future governments. But he got one thing right, saying “the Coalition has always regarded [superannuation] as socialism”.
This handily gives away exactly why the right is lining up to back an idea that is universally regarded as a dog: it’s not just about the war on Turnbull, but about the long-term Liberal war on superannuation. For many Liberals, mention superannuation and a red mist descends, they start frothing at the mouth and screaming about “venal unions”. So irrational is the hatred that they ignore the fact that industry super funds are equally run by both unions and their own allies, employer groups, as well as ignoring that those employer/union funds oufperform funds run by the big banks. You’d think the Liberal party would be playing up the remarkable and consistent contribution of Australia’s businesses to a retirement incomes system that is well-regarded around the world in spite of its high fees — but no.
Indeed, the hatred is so intense, they appear not to care that allowing super to be used for housing would not merely harm industry super funds, it would hammer the big bank-run retail funds as well (all at the same time as Morrison wants super funds to take a look at investing in affordable housing). That the effect would also mean even higher asset prices for older, wealthier people and housing investors is just the iceing on the cake. This is really about attacking a hated sector created by Labor and the unions that is now worth $2 trillion.