Assets for the next generation

The accounts would operate as sub-accounts of the existing superannuation system. They would also be means-tested, along the lines of family payments.

After the initial endowment, government would top up the accounts, say at ages 5, 10 and 15. It would also offer tax incentives, encouraging families to contribute to the nest-eggs and further invest in their children.

With the benefit of compound interest and managed investment strategies, the initial investment would grow over an 18-year period. I envisage a system that delivers nest-eggs in the order of $10,000.

An important part of the program is to provide financial education for account-holders, building a culture of savings and responsibility among young people. At age 18, the holder could access the account only for sound financial purposes - such as home ownership, HECS payments, rollover investments, plus training and employment.

This is an initiative that takes young people seriously, providing adult resources as they move into adulthood. It backs the strong desire of parents to pass on assets and ownership to the next generation.

It also follows the principle of mutual responsibility - government provides an endowment for each newborn child but then the families themselves are expected to add to the accounts. This is not a something-for-nothing program.

For our side of politics, Nest-Egg Accounts are an important way of breaking the cycle of wealth inequality. While welfare support for low-income families is absolutely necessary, it cannot overcome the problem of inter-generational poverty.

There can be few things worse in our society than moving into the adult world without assets, without savings, without hope for the future. Yet this is the prospect tens of thousands of young Australians face every year. It is the reason why inequality is so entrenched.

As asset prices continue to grow, people outside the ownership tent are left further behind. This is what the NATSEM research is saying - young Australians who have missed the housing boom will continue to slide down the ownership ladder.

In a market economy, it is not the flow of money that matters most. It is where the money settles.

The rich, of course, always want the money to settle with them, at the expense of the poor and the children of the poor. The challenge for Labor is to break this pattern of wealth distribution. This is why Nest-Egg Accounts are so significant. They help the outsiders to own assets; low income families to pass on something better to the next generation and the children of the poor to be owners rather than Centrelink customers.

Social justice relies on giving all Australians an ownership stake. Not just in the retirement years, but through all parts of the lifecycle. A nation of asset owners is an egalitarian nation.