James Bidgood (Dawson, Australian Labor Party) Share this | Hansard source

I rise to support the government’s First Home Saver Accounts Bill 2008, which implements Labor’s election commitment to introduce first home saver accounts. The government is introducing first home saver accounts to provide a simple, tax effective way for Australians to save for the purchase of their first home in which to live through a combination of low taxes and government contributions. People in my electorate welcome this bill because they know that the option of starting a first home saver account will bring the dream of homeownership closer to a reality for hundreds of thousands of young Australians.

The proposed first home saver accounts are low-tax saving accounts to help Australians realise the dream of homeownership. Since this government came to office, my electorate office has ironically been flooded with inquiries about the scheme we are introducing today. I am happy to say that the wait will soon be over and that the detail will undoubtedly satisfy those many constituents who have shown a deep interest in this measure. Many people in my electorate aspire to own their own home. It is part of the great Australian dream, whether they aspire to a house or a unit and whether it is in the city or in the great number of suburbs or towns in my electorate. Thanks to the Rudd Labor government implementing yet another election commitment, aspiring home purchasers will have the option and an incentive to save and turn aspiration into reality.

This proposed scheme rewards those who save to purchase a home of their own. The government is legislating an attractive deal with the first home saver accounts. We are proudly supporting and encouraging Australians to save for their first home. We in the Labor Party understand that one of the biggest barriers to homeownership is the saving of the deposit. This bill offers potential first homebuyers saving for a deposit added financial incentive to purchase their first home. I am proud to be part of a government that is introducing into this place measures to boost savings for people in Dawson. I am proud to be part of a government that fulfils every one of its election commitments—and, in this case, has not just fulfilled its commitment but improved it.

Working families in my electorate have been doing it tough, having endured 12 straight interest rate rises, with inflation now at a 16-year high, and having had 11 years of those opposite spending like drunken sailors, with the member for Higgins asleep at the wheel on the economy and ignoring key investments in infrastructure and skills during an unprecedented minerals boom. In what was to be his final term in office, the former member for Bennelong was more worried about his own legacy than everyday working people.

There is finally some good news, finally a decision by a government that will do something about getting money in the bank that will help people to get a key in the door of their first very own home. Homeownership will always be a part of the Australian dream, and the Australian Labor Party understands this. A home saving plan is one part of showing that we understand, but it is our commitment to responsible economic management that will also get more people into their own homes. We are committed to move on and do what members opposite failed to do in the 11 long years they occupied these benches and address our nation’s skills shortage, build on our capacity by investing in essential infrastructure such as roads and ports, and invest in our young people by putting money into schools and universities. The budget has proved we are getting on with the job of building and growing the economy to meet the challenges of the 21st century with confidence.

This legislation shows that we are serious about delivering for the people of Dawson, serious about encouraging saving and serious about assisting people to own their first home. We are serious about tackling the inflation legacy left by the National and Liberal coalition government. This bill goes above and beyond our election commitment made to the people in November 2007. It takes into account improvements arising from the consultation process to make the accounts simpler and fairer.

In summary, the government will contribute 17c to the dollar up to $5,000 invested in a year into the home saver accounts. This means an individual contributing $5,000 into a home saver account in one year will receive a government contribution of $850. Tax on investments in a first home saver account is capped at 15 per cent, up to an indexed $75,000. By combining own savings, government incentives and tax treatment to boost the deposit, we have made these very attractive accounts for first homeowners, and I know there will be a lot of happy savers in Dawson come 1 October when banking institutions and other eligible finance providers can begin offering first home saver accounts.

Through consultation, we have removed the stipulation in the election commitment that there be a $1,000 up-front contribution to open an account, allowing savers the choice of how much money they have to begin saving for their first home. The potential for these accounts to be used for something other than first home purchasing is minimised with the stipulation that any funds not used to purchase a first home must be transferred into superannuation. Flexibility is ensured as people can freely transfer from one first saver fund to another. Savings into home saving accounts are anti inflation, as young people are saving already. Under the scheme, a couple each earning average incomes and saving 10 per cent of their pay would be able to save more than $85,000 after five years of disciplined saving. This is up to $14,000 more than what they would have saved otherwise, depending on returns. To conclude, it is estimated that these changes will increase savings in accounts from over $4 billion to around $6.5 billion after four years—a tremendous achievement. On behalf of the people of Dawson, I wholeheartedly endorse these bills.

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