Federal MP Tim Wilson has been slammed online over social media posts that have been described as “unlicensed financial advice”.
The Liberal member for Melbourne electorate, Goldstein, on Monday morning issued an identical Tweet and Facebook post that appeared to suggest Australians should dip into their super to buy a house.
“Aiming to buy a first home and struggling to save the deposit? For 4 more days you may be able to access your super savings now to bring a purchase forward: earlier & cheaper,” Wilson stated.
“#HomeFirstSuperSecond - you’ll have a better life & a better retirement.”
Aiming to buy a first home and struggling to save the deposit? For 4 more days you may be able to access your super savings now to bring a purchase forward: earlier & cheaper. #HomeFirstSuperSecond - you’ll have a better life & a better retirement: https://t.co/t22vAyprNC
— Tim Wilson MP (@TimWilsonMP) December 27, 2020
In the social media post, Wilson is referring to the early super access scheme. Applications for the scheme end at 11:59pm AEDT on 31 December.
The legality of the posts quickly attracted criticism from the public, including Shadow Minister for Health Chris Bowen. Bowen was previously Shadow Minister for Finance between 2013 and 2019 and was Federal Treasurer in 2013 under the Rudd government.
“1. Mr Wilson is giving financial advice here. Unless he is a trained and licensed financial adviser he has some explaining to do,” Bowen tweeted in a reply.
“2. The rules state early access is for hardship, not a house deposit. He has advised people to act in breach of the rules.”
1. Mr Wilson is giving financial advice here. Unless he is a trained and licensed financial adviser he has some explaining to do.
2. The rules state early access is for hardship, not a house deposit. He has advised people to act in breach of the rules.
— Chris Bowen (@Bowenchris) December 28, 2020
Twitter user Matt Burke claimed that he had reported the “unlicensed financial advice” to the corporate watchdog ASIC.
“MPs should not be above the law,” he said.
In another tweet, Burke continued: “Authorities should consider whether Tim Wilson is giving unlicensed financial advice in contravention of section 911A of the Corporations Act; or advice not in the best interests of individuals in contravention of section 961B of the Corporations Act.”
VFS Group Global Macro Fund investment manager James Whelan also said that he wanted to “raise [his] concerns too”.
Many Facebook users also questioned the lawfulness of Wilson’s social media post.
“The rules state early access to superannuation is for hardship, not a house deposit. Tim Wilson is advising people to act in breach of the rules,” a user said.
In a video posted to Facebook on 23 November, Wilson stated: “Owning your own home should take priority over superannuation.”
“Every dollar locked into super reduces your ability to save for a home and reduces your time to get and pay off a mortgage.”
Wilson is the chair for the House of Representatives Standing Committee on Economics and was formerly Australia’s Human Rights Commissioner.
Is Wilson doing something illegal?
The ATO’s rules around the Covid-19 early release of superannuation scheme indicates that eligible citizens and permanent residents may be able to dip into their super early if they are “adversely financially affected by Covid-19”.
It is illegal to withdraw your super early unless you meet specific conditions under “very limited circumstances”, the ATO states.
You can only access your super early on compassionate grounds; because of severe financial hardship; a terminal medical condition; temporary or permanent incapacity, or if you’re out of a job and have less than $200 in your super account.
The ATO also warns against people promoting early release of super schemes.
“They might tell you they can help you withdraw your super to pay off credit card debt, buy a house or car, or go on a holiday. These schemes are illegal.”
In a recent statement, ASIC said it was cracking down on people providing advice without an Australian financial services (AFS) licence.
“Financial advice must only be provided by qualified and licensed financial advisers or financial counsellors, not by individuals or corporations who neither hold an AFS licence, nor are authorised representatives of an AFS licensee,” ASIC stated.
However, University of South Australia academic Peter Koulizos noted that houses are not technically considered a financial product under ASIC rules.
“Real property is not considered a ‘financial product’ under the Corporations Act. Anyone can give advice on real property and is not obligated to abide by the Corporations Act nor do they come under the scrutiny of ASIC,” he wrote in a 2013 piece for The Conversation.
Yahoo Finance has contacted the ATO, ASIC and Tim Wilson’s office for comment.
‘Liberals believe in empowering you’: Wilson
Wilson did not provide an email statement to Yahoo Finance, but in a Tweet side-stepped accusations of unlicensed advice and turned the attention to the political opposition.
“Australian Labor will do anything to stop disempowering their fund manager mates. To Labor it should be super 1st, home 2nd,” he said.
“Liberals believe in empowering you through home ownership.”
Its true @YahooFinanceAU: @AustralianLabor will do anything to stop disempowering their fund manager mates. To Labor it should be super 1st, home 2nd. Liberals believe in empowering you through home ownership. #HomeFirstSuperSecond
— Tim Wilson MP (@TimWilsonMP) December 29, 2020
What are the penalties?
Those that encourage illegal early access of super may be prosecuted by the ATO, and may receive hefty fines and even jail time.
“These activities may involve breaches of the following legislation: Superannuation Industry (Supervision) Act 1993; Corporations Act 2001; and Australian Securities and Investments Commission Act 2001.”
“Breaches may include misleading or deceptive conduct [or] giving financial product advice without an Australian financial services licence.”
“We may impose civil and criminal penalties, including significant fines and terms of imprisonment.”