Liberals Promise to Property Investors: Tim Wilson - Liberals Treasurer

Sammy Gordon (0:05)

Tim Wilson, mate, Shadow Treasurer, Liberal Party, mate, absolute pleasure having you on the Scouting Australia Podcast, mate.

Tim Wilson (0:11)

Well, thank you, I'm glad, be clarifying, it's not about the scouts though. It's not, no, it's definitely not. Okay. No, no, no, no.

Sammy Gordon (0:17)

I mean, it depends. If you call the Australian Property Scouts, Scouts, then maybe, so.

Tim Wilson (0:21)

Okay, well, I'll just get down to my three-fingered salute.

Sammy Gordon (0:24)

That's it, mate. Well, we obviously got there scouting properties all across Australia, and that's where the name comes from. And mate, it's a very, I think, prudent conversation that we're having today because so many of our listeners and client base, and obviously people who follow the podcast as well, are so entrenched in what happens in property. And obviously everything changed overnight on May the 12th. It was obviously a couple of weeks before that it started getting really getting thrown in the air of all these things might play out and might happen. And then the night of, obviously everything changed.

Tim Wilson (0:53)

Yep, federal budget night. Federal budget night. Changed forever.

Sammy Gordon (0:55)

That's it, mate. And then you fast forward another month beyond that. And then they flipped SMSF on its head as well. Something that most everyday Australians that were trying to get themselves ahead, really utilizes as a investment vehicle to get themselves ahead. And seemingly overnight got flipped as well.

Tim Wilson (1:10)

Well, it's true. But SMSFs are also a really important way that people finance property development, not just to make money, but it's obviously a part of it. No one's pretending otherwise. So essential to the housing stock of the country.

And I don't think the government quite understands the consequences of what they've done there, where they've basically taken a bullet straight to housing development, particularly for the mum and dad's wanting to build stuff. And increasingly, it's being revealed for larger property developers too.

Sammy Gordon (1:37)

Yeah, for sure. And I think, mate, one of the other things which I have heard nothing about really since the back end of this, right? And it all really playing out is, you know, there's this supposed $2 a week modeling that was made off the base, supposedly, rent increase, which is farcical, absolutely farcical.

Tim Wilson (1:52)

I think we can call BS on that one. Yeah, for sure.

Sammy Gordon (1:54)

I think you and I both publicly have as well. But one of the other big things that I haven't even heard anyone even discuss is the modeling of how the SMSF shape up will be of the people who were relying on that to build part of their self funded retirement plan to actually not be a burden on the government and the economy, let's say, in 10, 20, 30 years and beyond. And how that actually looks from a modeling perspective of how much extra that might cost to the government now of not actually having self funded retirees, with that as a strategy.

Tim Wilson (2:20)

I get the point. And normally I'm sympathetic, but I think we need to be realistic. Most people who have SMSFs are already above 500,000, I should say. So the chances that they're still going to be depending on the government is actually quite slight. It is going to have a much bigger impact in terms of the property is developed, the price they go on, and then more importantly, the price that Australians are going to pay.

And that is going to impact the capacity for people to get in earlier, cheaper, and will have a much bigger and longer tail, but that will be very hard to model.

Sammy Gordon (2:55)

One thing I'll throw in, mate, just to challenge you a little bit on that front is obviously we work with, there would be hundreds of clients a year that we have bought properties for through the SMSFs that might have had between 150 to 250,000. So it was, and they're people ranging from 30s, 40s and 50s. And we've had literally clients in their 50s, especially self-funded people, sorry, self-employed people who hadn't really built anything, trying to make something for themselves, starting with a small nest egg. And there's people like that man that really was a crucial part of their, of their sort of investment vehicle as well.

Tim Wilson (3:21)

It was absolutely part of their strategy. I'm not just here with that, but they tend to be more sophisticated and I'm not defending the change. I think they're a disaster. But whether or not they're going to have a long-term impact, because if they're not able to invest in through their SMSF into housing, they're not absent the capacity and some investments return better returns than housing. The real question is, what are we doing for the housing market to increase supply?