Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Hansard source

Labor is committed absolutely to helping people own their own homes. For the overwhelming majority of Australians, owning your own home is one of life’s great milestones. It provides security; it provides satisfaction; it provides sanctuary; and it is a boundary around our families. Within a family home there are usually thousands of happy family memories and experiences.

The biggest step in home ownership is the first. I know that because I am still paying for my first home today. Just a few years ago I took that very big step. For many, buying a first home is a great leap of faith; it certainly was for me. It is a time when families take on a large debt, and many families need support and assistance for this transition. That is why Labor is committed to the First Home Saver Accounts (Further Provisions) Amendment Bill 2008 and the First Home Saver Account Providers Supervisory Levy Imposition Bill 2008, which are a very significant part of the federal budget’s efforts towards helping first home buyers.

The Rudd government will be investing around $1.2 billion over four years in the First Home Saver Accounts initiative. Labor’s first home saver accounts are a policy breakthrough. They are the first of their kind in Australia and will provide a simple, tax-effective way for Australians to save for their first homes. Labor’s first home buyers account policy will be helpful for young families in buying their first home. It will also help older families who thought they had missed out on that opportunity to buy a home; it will resurrect their hopes. Any individual can open an account if they are aged 18 years or over and, of course, under 65. These accounts will operate very flexibly. They are designed to be accommodating and to meet the needs of individuals and families, following a detailed consultation process with consumers, the finance sector and the housing industry. The benefits from these accounts will be derived from a combination of government contributions and low taxes.

There are four key ways that consumers will benefit from these accounts. Firstly, contributions to these accounts will not be subject to tax. Secondly, investment earnings or interest will be taxed at a minimal rate of 15 per cent. Thirdly, withdrawals for the purposes of purchasing a first home will be tax free. And, finally, the first home saver account balances will be exempt from the income and assets test. Withdrawals from a first home saver account will also be tax free where they are used to purchase a first home to live in. An overall account balance cap of $75,000 has been introduced, but the initial stipulation of an upfront contribution of $1,000 has been removed. So we actually have a significant improvement to the benefits in these accounts above and beyond what we promised at the federal election.

There are a couple of other important issues to do with these accounts. Contributions may be made by the account holder or by another party, such as an employer, on behalf of the account holder. The government will make additional contributions which will be paid directly into the account after the individual has lodged their tax return and the provider has submitted the relevant information to the Australian Taxation Office. The government will contribute 17 per cent of the first $5,000 indexed for individual contributions made each year. This means an individual contributing $5,000 will receive a government contribution of $850. No minimum annual deposit is needed to keep the account open.

All I can say is that I wish this policy had been around when I purchased my first home. This is a very good scheme. It has been very well thought through and will help many working Australians to make that first step of buying their own home. I will point out one important thing about the federal seat of Corangamite: the federal seat of Corangamite is a very attractive place for young first home buyers to invest and make that first contribution in their lives. This account will certainly help those individuals to be able to acquire their first home. Transferring the account balance into superannuation for individuals may also apply if those individuals’ circumstances change.

A wide variety of providers will be able to offer these accounts. Public offer superannuation providers, life insurers, friendly societies, banks, building societies and credit unions will be able to offer these accounts. Banks, building societies and credit unions will be able to offer deposit accounts and superannuation providers, life insurers and friendly societies will be able to offer investment linked accounts. Over the first three years, federal Labor’s first home saver accounts will help around half a million people with their first home purchase. That is a lot of help to a lot of people. But the impact and benefits of Labor’s first home saver accounts are broader than just those individuals. It is good for the overall Australian economy. Federal Labor’s first home saver accounts will also help boost national savings, with these accounts anticipated to hold around $6 billion after the first three years of operation. Another legacy left to this government by the now opposition included, of course, the skills crisis and rising mortgage interest rates.

As I said, it was only a few years ago that I was saving a deposit for my first home with my wife. I know how hard it was then; today it is even harder. With escalating housing costs over recent years, saving for a home loan deposit is very tough. It is one of the greatest obstacles to buying one’s first home. This policy will help thousands of Australians to overcome this barrier. It will help more Australians save a larger deposit, and a larger deposit will reduce the debt burden for young first home buyers. It can, for example, help them avoid incurring costly mortgage insurance.

I would like to point out something else. As good as this scheme is, it is not all we are doing to help first home buyers. This policy goes together with a range of other initiatives that will further assist in dealing with housing affordability. As an example, I would like to point out Labor’s housing affordability infrastructure fund, which provides a very significant contribution to helping bring down the cost of housing and land acquisition. Labor, through the housing affordability infrastructure fund, is offering to assist councils to meet the costs of some community infrastructure and services that will help bring down the cost of land. Through these initiatives you can see what a difference Labor is making in government. The government is taking up very early on the policies that we took to the federal election to help working families.

This government has a very strong work ethic in helping people meet the costs of buying their first home. This is a government that knows what matters to working families. This is a government that is creative, a government that has policy initiative. What a difference an election makes. What a contrast we have today. Contrast the fading memory of the tired Howard-Costello government—tied up in policy knots, tangled in ideological obsessions, twisted inward with factional positioning and leadership jockeying, trying to shore up their own job security—with a united, new government with well crafted and targeted policies, looking decades ahead and rebuilding Australia after a decade of neglect.

Labor’s first home saver accounts are not just good policy in themselves. They are a sign of Labor’s creative thinking and our commitment to tackle the real problems that first home buyers face in Australia today. I commend the bills to the House.

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