Danna Vale (Hughes, Liberal Party) Share this | Hansard source

I rise to address these three bills, the First Home Saver Accounts Bill 2008, the First Home Saver Accounts (Consequential Amendments) Bill 2008 and the Income Tax (First Home Saver Accounts Misuse Tax) Bill 2008. First, all the business that was put before the House last week has demonstrated that this government is forcing through its legislative agenda with insolent disregard to the well-established parliamentary convention here in this place. For decades this practice has allowed the various parties and Independent members the opportunity to scrutinise legislation in the true exercise of the democratic process as it moves through the threshold of initial consideration by this House. The process is essential for the transparency and accountability that our fellow Australians have rightly come to expect from us here in this chamber. Unfortunately for my constituents, there has been no opportunity to fully apprehend the details of several bills that went through the House last week, and these bills were virtually dumped on them by the government late last Tuesday night.

Fortunately, these three bills relating to housing affordability measures were held over to this week and I wish to take this opportunity to speak on the bills because they are aimed at an issue which has engaged my interest for some time and one that is of concern to many of my fellow Australians, especially Indigenous and disadvantaged Australians, who see themselves as locked out of the great Australian dream of owning their own home. The First Home Saver Accounts Bill 2008 is not a supply-side solution; it is a demand-side measure and a modest measure at that, but I do not oppose the measure. It does establish first home saver accounts, it governs their operation, it provides for the payment of government contributions for account holders and it provides for the prudential regulation of account providers. The First Home Saver Accounts (Consequential Amendments) Bill 2008 provides consequential amendments to other Commonwealth laws, chiefly the taxation and corporations law. Finally, the Income Tax (First Home Saver Accounts Misuse Tax) Bill 2008 imposes the misuse tax to claw back benefits obtained by an account holder who inappropriately uses the account.

I note that the government’s proposed model has significantly changed since the announcement of the budget. Pre-budget, the government was to pay a variable contribution of between 15 and 30 per cent of the first $5,000 per annum, depending on the account holder’s marginal tax rate. This would have resulted in higher income earners receiving a significantly larger government contribution than lower income earners, which would have been grossly unfair. It was a point made a number of times in this chamber during question time, to which the minister never provided a straight answer but which we now note has been addressed in this legislation. I am now advised that the first $5,000 per annum saved in a first home saver account will attract a 17 per cent contribution from the Australian government and earnings on the account will be taxed at a low 15 per cent. The overall account balance limit has also been increased to $75,000 indexed, after which no further personal contributions can be made. Withdrawals can only be made after contributions of at least $1,000 have been made in the last four separate financial years, and withdrawals are tax free when the money is used to buy or build a first home in which the couple lives.

During the last election the coalition policy regarding homeownership proposed to introduce tax-free home saver accounts to provide a simple, tax effective way to help Australians to save for their first home. A key difference in the coalition policy is that it was proposed to have two types of accounts: one a tax-free home saver account for children and the other a tax-free home saver account for adults. Tax-free home saver accounts for children were to be available to all Australians under 18 years of age. Parents, grandparents and others wishing to contribute up to a total of $1,000 between them each year could place money into an account. The enticement of this initiative is that these contributions would have been tax deductible and savings in the account would have been available to purchase a first home anytime after the account holder turned 18 years of age. Other initiatives proposed by the coalition last year included shared equity schemes. This included providing a capital gains exemption to individuals who shared equity in a home occupied by a family member and which is the family member’s first time home.

This legislation now before the House represents the Rudd government’s response to the crisis in housing affordability and I repeat that it includes three measures: the Housing Affordability Fund, the National Rental Affordability Scheme and the first home saver account. However, as Australians well know, the major drivers in the housing affordability crisis include the restrictive land release policies of state and local governments, and government taxes, fees, levies, charges and compliance costs which are borne by the new homeowner. These charges make up more than a quarter of the cost of a new house and land package.

I note that the report from the Senate Select Committee on Housing Affordability is due to be presented in mid-June this year. While this government is looking at these three measures to address the current housing affordability crisis, we all know that they will not solve the core problem. It seems to me that what is really required here is that we take a objective, fresh and honest look at the issue, which is a problem that impacts on the most disadvantaged Australians, and find a solution that provides equity and equality in homeownership for disadvantaged Australian families, including Indigenous Australian families. It is possible that such a solution could be framed to be a supply-side solution flexible enough to address, at the same time, several key portfolio areas of concern and, further, be implemented at considerable savings to the government.

If I ruled the world, I would want such a solution to provide affordable housing for our disadvantaged Australians, our disadvantaged Indigenous Australians, as well as mainstream Australians. I take the opportunity provided by this debate to outline a framework that would include three important benchmarks in addressing affordable housing ownership, particularly ownership by my fellow Australians: one, it must provide homeownership for disadvantaged Australian families; two, it must pay for itself through savings in recurrent outlays; and, three, it must include Indigenous Australians.

Members may not be aware, but the federal government spends around $3 billion a year on rental assistance. This is in payments for rental assistance through Centrelink and housing assistance to the states. This is $3 billion a year. It is spent by the government simply to keep people as renters. The Australian government can do much better than this. Home affordability is an issue in all the states and, evidenced by these bills, it is an issue also for the federal government. If this government is serious about addressing this issue, it needs to set in place a national structural change agenda that systematically addresses the reasons for the emergence of home affordability as an issue in the states and one that provides for coordinated and economically responsible long-term solutions.

The idea is this: the federal government should adopt a national housing policy framework to allow it to take a direct leadership position in stimulating the supply of affordable housing through a private-public partnership approach and at the same time address the causes of home affordability issues that have emerged in the states. Let’s face it, the piecemeal approach adopted by the states has proved to be an abject failure. We are all aware that the explosion of state fees and charges on land is one of the main causes of the increase in the cost of housing. Mindful that the federal government contributes around $3 billion each year to keep people as renters, it could allocate a portion of this to fund up to 20 per cent of the cost of a house and land package constructed for a price—let us say, $250,000—and sold to approved applicants who are currently on state government public housing waiting lists or for other low-income earners—

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