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

I rise to support the First Home Saver Accounts (Further Provisions) Amendment Bill 2008 and the First Home Saver Account Providers Supervisory Levy Imposition Bill 2008. The government’s first home saver accounts provide an additional mechanism for individuals in a family to save for a first home in which to live. The proposals in this bill are consistent with the existing financial sector levy framework that funds the supervisory activities of the Australian Prudential Regulation Authority, APRA, on a user-pays basis.

This bill implements an additional part of the government’s election commitment to assist people to save for a deposit on their first home against a background of high home prices and high interest rates. The following are key features of the first home saver accounts. The government will provide a 17 per cent matching contribution on personal contributions, up to $5,000 a year, with an annual maximum of $850. Account holders must save for part of four financial years—that is, the minimum period can be two years and two days, if an account is opened on 30 June in any year, and the maximum contribution limit is an account balance of $75,000. Interest can exceed this amount. Account holders contribute from after-tax salary. Government contributions and withdrawals are not taxed, and earnings in the account are taxed at 15 per cent, like superannuation. Accounts can be provided by banks, superannuation funds, building societies, life offices and credit unions.

Two bills are being debated today. One of the bills establishes a levy to recover, firstly, the APRA, ASIC and ATO costs of regulation that mirror the current retirement savings account model. Secondly, it provides for unclaimed money provisions that will be consistent with those applicable to other financial products. Thirdly, it allows for an exchange of information between the ATO, ASIC, APRA and the states and territories. Fourthly, it contains amendments that facilitate the operation of accounts under family law.

The First Home Saver Account Providers Supervisory Levy Imposition Bill 2008 introduces a framework for imposing a supervisory levy on first home saver account providers. The levy will recover on a user-pays basis the cost of the Australian Prudential Regulation Authority prudently supervising financial institutions that offer first home saver accounts. The proposed levy is modelled on the supervisory levy for retirement savings account providers and will be administered as part of the existing financial institutions supervisory levy framework. The financial institutions’ supervisory levies are set by the Treasurer annually.

The bill will ensure that a scheme for dealing with unclaimed money will be put in place. This is similar to how other non-superannuation investments are treated. Where first home saver accounts have been inactive for seven years and where the provider has been unable to contact the account holder, any money in those accounts will be paid to the Commonwealth. Individuals who are later found will be able to make a claim for their money. The unclaimed money provisions will ensure that the first home saver account providers are not required to service small, inactive accounts. This is expected to ease the compliance burden for providers.

In relation to family law, an amendment is being made to allow individuals to access information about their partner’s first home saver account without the need to formally commence legal proceedings. Amendments will be made to ensure that payments under a family law obligation—for example, to an account holder’s spouse—receive the same treatment as if paid to the account holder.

Other amendments are being made to provide protection to providers who, in good faith, act in relation to a family law obligation and to ensure that contributions made to first home saver accounts under family law obligations which breach the account balance cap are not paid directly to the account holder.

An amendment has been made to the withdrawal rules to provide better protection to individuals who are unable to meet the occupancy rules due to circumstances beyond their control and to ensure that individuals who misuse their first home saver account money cannot avoid the misuse tax by recontributing.

It is pleasing to note that, as of 19 July 2008, eight credit unions and cooperatives had advised APRA that they intend to offer first home saver accounts, which will provide real choice to consumers, and it is almost certain that more of them will offer these accounts in the future. Major stakeholders are broadly supportive of the first home saver accounts. Constituents in my electorate, especially young couples and renters, are over the moon at being able to set up these accounts and make the dream of home ownership a bit closer to reality in the near future.

As of 1 October, constituents can get cracking on saving a deposit, with the government by their side with an attractive option in the first home saver account. To be eligible to open one of these accounts from 1 October, you need, firstly, to be aged over 18 and under 65 years; secondly, to have a tax file number you can quote in your application; and, thirdly, never to have owned a home in Australia that has been your main residence.

If you are eligible, this is what you need to do. Firstly, you must choose the provider you want to have your account with and read its product disclosure statement. Banks, building societies, credit unions, life insurance companies, friendly societies and trustees of publicly offered super funds can all offer first home saver accounts. Secondly, you should remember that your first home saver account must be an individual account, not a joint account. However, if you want to buy a home jointly you can do so, even if none of the other owners has a first home saver account. Thirdly, you must make contributions from your after-tax income. You cannot salary sacrifice into a first home saver account.

I am pleased to support legislation that provides incentives for prospective home owners to own their own home. I would like to draw the attention of the House to the fact that in the seat of Dawson there is less than one per cent rental availability. This is due to various pressures. First and foremost, we have a mining resources boom which has attracted many workers from all over the country. This has taken up virtually all of the rental supply. This government has offered a real helping hand to children in the seat of Dawson who are turning 18 and want to start saving for their dream home.

The resources boom brings many benefits and also causes some interesting social situations. For example, a family would have to pay $350 per week to rent a very basic three-bedroom wooden Queenslander on an 800-square-metre block of land in the centre of Mackay, in the seat of Dawson. With those constraints, people need a helping hand. The Rudd Labor government has done something incredibly positive which over the last 12 years was totally ignored. We have created a housing ministry. We have a Minister for Housing. That is how seriously the Rudd Labor government takes the housing situation. We have not just paid the problem lip-service or thrown it to the ravages of the free market and said, ‘It’s not our concern.’ We have stepped in and said: ‘We are taking this very seriously. We are creating a special ministry for housing.’ Tanya Plibersek is doing a fantastic job in going round the country to find out the real needs of working families, single people and young married couples who are looking to own or rent low-cost, affordable housing.

In the seat of Dawson, while the mining surpluses that are coming through are adding to the bottom line of this nation’s economy, we have people who are struggling. But this government has said: ‘We are going to step in. We are going to do something very constructive.’ There is no better way to do that than to have a special ministry for housing. That is how seriously we take the situation.

This bill is a practical means of encouraging people to save and for us to set an example for our young people that saving is very important. All parents should be setting an example for their children in how to save. This government has said: ‘We are going to give you an incentive to say: “Yes, I want to put some money away. I have a goal, a vision, a dream” And guess what? The Rudd Labor government is going to help you achieve that. We are going to help you in the steps to owning your own home.’ The great Australian dream is to have your own home—to either build, design, redecorate or refurbish one. There is nothing more important to our society and our culture than to be in control of our destiny.

The role of government is to help people who are not wealthy. The role of government is to say, ‘Yes, let’s give a hand to those who really need it.’ We have lots of interesting constraints in our society. Some of them, ironically, come from the second boom that is happening, particularly in the Bowen Basin area and also in the electorate of Dawson, which I represent. We have practical measures on the table right here, right now to deliver for the people of Dawson. I am so proud to stand here today in this House and say this government has a housing minister; this government has a determination and a political will to truly do something to give ordinary working people a hand up, an incentive to save and a chance to realise their dream of home ownership. I commend the bill to the House.

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