Waleed Aly mocked for backing Scott Morrison housing pitch on The Project

Home Economy Waleed Aly mocked for backing Scott Morrison housing pitch on The Project
Waleed Aly mocked for backing Scott Morrison housing pitch on The Project

The Project host Waleed Aly’s support for one of the PM’s most controversial policies was mocked by a guest who quickly pulled the presenter up on his facts.

Prime Minister Scott Morrison’s plan to allow first homebuyers to unlock their super to buy a house may be a futile last-ditch attempt to win the election but at the very least it is winning some support.

The PM’s controversial policy announcement to allow Aussies to use up to $50,000 from their superannuation was panned by Labor as a stunt.

But according to The Project host Waleed Aly, it has some merit.

Speaking on the idea on Monday night’s show, Aly said it should be looked at as a sound investment. He said it makes sense that a person’s super should be used to invest in “the property market” as opposed to what many super funds do – invest on a person’s behalf in stocks.

“Ten years ago I’d much rather have had my money in housing than on the stock market,” he said.

But the comment was quickly shut down by guest Shane Wright, who is an economics journalist for Nine newspapers.

“That’s why you’re a TV presenter and not in the property market,” Wright responded.

Aly’s co-host joined the pile-on: “That’s why you’re not an economist or real estate agent,” he said.

Aly’s support for the plan is based on the idea that the housing market has outperformed shares.

“One thing that is interesting about this policy is that if you were to take your money out to spend on a house and you sell that house, you have to put the money back with the relevant proportion of capital gains,” he said.

“So once you think about it that way, couldn’t you look at this as just another investment, instead of putting money aside for superannuation that gets invested in the share market, it’s being invested in the property market.

“And so it’s the same as shares except it has the benefit that you could live in your investment but you are not throwing your money away, you’re not losing the investment.”

Aly said the “share market is probably less reliable than housing”, but Wright corrected him.

“If you’re in superannuation with growth fund, you have made 9.5 per cent over the last 10 years. You have outperformed the property market by about $200,000,” he said.

“People think that house prices never go down. We are actually experiencing that right now.”

The question about which is better – super or a house – has been explored by economists.

The Australian newspaper ran the numbers and says that it is “a close run thing, super wins by a nose, a fractional 0.5 per cent”.

“That’s assuming future super returns are as good in the future as they were in the past,” the newspaper’s wealth editor James Kirby wrote on Tuesday.

Stream the news you want, when you want with Flash. 25+ news channels in 1 place. New to Flash? Try 1 month free. Offer ends 31 October, 2022 >

Steve Mickenbecker from Canstar research group told the newspaper: “It so close you can’t really call it, using your super money to finance your home is going to be up to the individual and their assessment of the deal.”

Ray White chief economist Nerida Conisbee was more blunt. She told the ABC that it was a bad idea.

“Using superannuation from early on in a person’s life cycle for a home can also lead to far less at retirement, particularly if the family home can’t be easily sold to downsize or does not increase in value as hoped,” she said.

“Having to hand back a big chunk of equity to the government at this stage, or back into superannuation, will make it difficult for first home buyers to get into their next homes.”

The PM’s announcement at the Brisbane campaign launch on Sunday will allow Aussies to access 40 per cent of their super until July 1, 2023.

“Under the Super Home Buyer Scheme, first homebuyers will be able to invest up to 40 per cent of their superannuation, up to a maximum of $50,000 to help with the purchase of their first home,” Mr Morrison said.

There are no income or property caps under the scheme, with eligibility restricted to first homebuyers who must have separately saved 5 per cent of the deposit.

The proposal was first floated when Mr Morrison was Treasurer and championed by Housing Minister Michael Sukkar but vetoed by former prime minister Malcolm Turnbull.

It’s also been championed by Liberal MP Tim Wilson under a “home first, super second” policy.

For many under 30s, the scheme would wipe out their super savings but for older workers not buying a home until their early 40s, it would have less impact.

Read related topics:Scott Morrison

Leave a Reply

Your email address will not be published.