Tanya Plibersek (Sydney, Australian Labor Party, Minister for Housing) Share this | Hansard source

That is right. They did not have a housing minister so it would be impossible to name a housing minister. It shows how important they thought this was.

The homebuyers have been shut out of the housing market. We know that now, across Australia, they account for barely one in six of all home purchases. The figure was 16.4 per cent in March 2008 compared with over one-quarter of home purchases five years ago. The size of the typical first home mortgage has more than doubled in 10 years, from $104,000 in December 1997 to $230,000 in March 2008. According to the Real Estate Institute, median house prices continue to escalate and increased by 12 per cent across Australia in 2007. That is great for people who own their own homes already. What we are missing is an entry-level product and the ability for first home buyers to enter the market at that affordable level. I get letters all the time from people who despair of ever being able to own their own home or indeed parents and grandparents who despair of their ability to see their children and grandchildren own their own homes. One letter was from a lady in Perth who wrote to the Prime Minister. She said:

Myself and everyone I know can not believe how much the prices of houses ... are at the moment. It is a really sad thing, as I am happily married with a beautiful baby and would love to have a house of our own, as we live with my parents. Our dream is to have our own house, but ... I doubt it if we will ever have a house of our own. My husband works long hours, 7 days a week ... but there is still no hope. So, it would be absolutely fantastic if the government could do more to help with first home buyers ...

Well, we are. First home saver accounts will help aspiring homebuyers like this young family from Perth to save a bigger deposit. The new accounts will be available from October this year. The shadow minister criticised that as well, asking: why only from October? You could ask: why not from last October or the October before or the October before that?

The government will provide a 17 per cent contribution on the first $5,000 of individual contributions made each year. That means someone who manages to save $5,000, which I agree is a lot of money to save, will receive an $850 deposit from the government. The thing is that, if you are not able to save those bigger amounts, it will be hard to save for a deposit and pay your mortgage down the track. We do have to encourage people to engage in serious saving if they aspire to own their own homes.

I notice that the shadow minister is now critical of the flat rate because it benefits an apprentice on $10,000 a year more than it does a person earning $180,000 a year. The point to make here is that the apprentice is more likely to save for a number of years. If you start saving when you are 18 or 19 you might be saving for eight, nine or 10 years but, when you are in a position to pay the mortgage on your property, you will have saved a substantially greater deposit. That young person might be able to put away hundreds of dollars every year from the government contribution. Someone on $180,000 a year is not going to save for 10 years to buy a house. In fact, they might not even take up these new accounts—and we accept that—because they might think: ‘I don’t really need to save for four years; I can put away a lot more money over the next two or three years, and I’m going to go down that path.’ Good luck to them if they can manage without us.

The 15 per cent tax on contributions as they are accumulating interest within the account is a terrific measure. It means that the accounts will be more tax effective as the money collects in them than if they had the money in an ordinary savings account. It is the same amount as if they were older people putting money into their superannuation, and I think that that is a very fair approach to take in helping these young couples save for their first home. A couple on average incomes that save 10 per cent of their incomes would be able to save a deposit of more than $88,000 after five years. I understand that it is a big ask for people to save that proportion of their income, but what I also need to say is that we find a lot of young people who set themselves the target of saving for their first home are very prepared to make some sacrifices. The government seeks to help and reward them along the way so that, instead of being caught in a rental cycle as more and more young Australians are today, these young couples and young individuals will be able to begin to save a deposit for their own home. This is not just good for individuals, for couples and for families but also very, very important for our national savings. We need to encourage people to get into a regular habit of saving. We all know that having a mortgage come out of your weekly pay packet and being in the habit of living within your means is much easier than taking the initial step of saving the deposit in the first place. So we hope that this will encourage a culture of saving. We expect that people will save and that, by 2012, the government contribution will have accumulated to about $6½ billion.

This is absolutely vital in our efforts to bring down the inflationary pressures in the Australian economy. We do not just need these individual savings, though it is very important to encourage a culture of saving. Tto increase our national savings by $6.5 billion by 2012 is phenomenally responsible, well-judged policy that does reflect our commitment before the last election.

I thought it was very curious that the shadow minister was somehow criticising public servants for saying that they are in the business of helping the government to deliver on election commitments. I thought that is what the people of Australia would expect of the government: to deliver on our election commitments. This was one of our election commitments. It was designed to help young Australians who are increasingly finding it difficult to buy their first home save a bigger deposit with a little bit of government help. I am very proud of that aim and very proud that this policy delivers on it.

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