Labor shadow minister for economic ownership Mark Latham told theFinancial Planning Association’sSydney Chapter yesterday that all Australians should be owning assets beyond superannuation.
Latham told the gathering that an elected Labor government would launch two initiatives aimed at getting the nation’s poorest families involved in owning assets.
“The top 20 per cent of households owns 65 per cent of Australia’s wealth while the bottom 20 per cent owns nothing at all,” Latham said.
The first idea Latham posited to get the bottom 20 per cent into economic ownership was the establishment of Nest-Egg Accounts, “a savings plan by which families can provide for the future needs of their children”.
Latham calls the plan “the youth equivalent of superannuation”, and the plan is designed to set up government seed funding for newborn children followed by top-up funding before maturity. However, eligibility to the accounts will be means-tested, while additional payments will attract tax breaks.
The assets Latham has in mind to be invested by funds in the nest-egg accounts will be in diverse portfolios of the managed funds industry. Latham also says education will be provided for account holders as they develop.
The second idea of Labor’s was for the set-up of Matched Savings Accounts, an echo of similar plans in the UK and the US.
Such accounts would see a government or financial institution matching savings of account holders, who are encouraged to reach a certain level of savings before they can access the institutionally-matched portion of the account.
“In the past, governments have under-estimated the capacity of disadvantaged people to save. Programs overseas, however, have shown that the poor can save and invest, once they receive the right support and incentives,” he said.
