Graham Perrett (Moreton, Australian Labor Party) Share this | Hansard source

I rise to speak in support of the two bills before the House, the First Home Saver Accounts (Further Provisions) Amendment Bill 2008 and the First Home Saver Account Providers Supervisory Levy Imposition Bill 2008. Unlike the member for Paterson, I took the time to actually do some research before rising to speak on these bills. I understand that those opposite would have been a little bit busy over the last couple of days, but he would have been guided by the joint media release coming out from the Prime Minister, Kevin Rudd, and the Minister for Housing and Minister for the Status of Women, basically detailing a program that maps out what the member for Paterson was complaining about. So it is unfortunate that he is not here in the House so that we can set him straight on what he was talking about.

It was interesting to hear his comments, because one of the great claims to fame of the coalition’s time in government and of the member for Higgins’ time as Treasurer stretching back to 1996 was the elimination of government debt. And while those opposite would have us believe that it was because of their shrewd economic management, it was actually more to do with the sell-off of public assets like Telstra and also those significant reforms made by the Hawke and Keating governments.

However, that is only half the story. At the same time as John Howard and Peter Costello were flogging off assets to reduce government debt, household debt was on the rise—and I mean on the rise and on the rise. When the Howard and Costello Show left office, household debt had reached a record $650 billion—up more than $70 billion or 12 per cent since 2002. And the ratio of household debt to disposable income had risen to 110 per cent—higher than in the United Kingdom and higher than in the United States of America. For the economically illiterate amongst us, that means that for every $100 we earned we owed $130. So, while government debt is nil, the burden has been shifted onto households, with every man, woman and child in the country owing about $32,500 on average. That means that my three-year-old son owes $32,500, on average. It will come as a shock to him; I have not broken that news to him yet!

At the same time, the cost of home ownership has risen beyond the reach of many young families. In the Australian Bureau of Statistics article ‘First home buyers’ it is reported that the average mortgage of first home buyers rose from $165,400 in 1995-96 to $310,000 in 2005-06. That is nearly a 90 per cent increase in 10 years. Obviously, that is not too bad if you are a home owner—if, say, you have a house in Point Piper or wherever, that is not too bad because, obviously, it is an asset that is accumulating value. Obviously, it is not so good if you are a renter—very tough if you are a renter or if you do want to chase that dream of owning your own bricks and mortar.

In Australia we often talk about that great Australian dream of owning your own home. But what does that mean? I just want to unpack that concept for a minute. I remember seeing a show on the ABC, I think it was last year or the year before, and the name of the show was Race—the Power of an Illusion. It was all to do with African Americans in the United States and talked about that progression from slavery to the present where we might soon have an African American President. It talked about how that had been such a difficult journey for African Americans in the United States.

The final episode talked about how important inheriting bricks and mortar is in giving people an opportunity in life. It seemed to make the point that—I apologise to the makers of the show if I am recalling it incorrectly—in communities into which African Americans moved, sometimes the housing values would decrease. If there were too much of an African American community in an area, the housing values would decrease and, therefore, people would not be able to keep up the mortgages and then pass on a capital item to their children. It is certainly something to be explored another day, but it goes to show how important bricks and mortar are in giving Australians an opportunity to improve their lot in life. It does not matter if you grow up in a single-parent household renting in Sydney; you can go on to accumulate great wealth. Often it is about that ability to have an asset and then pass that asset on to your children over the years. It is like how MPs in some places, I hear, pass on their seats to their children, Mr Speaker. That does happen in some places!

That capacity to pass on an asset to your children is what the great Australian dream is all about. It reminds me of a poem about how important it is that, when we build something, we pass it on. It is a poem by Percy Bysshe Shelley that many people would have studied at school—I am sorry to stir up old memories for those who had poetry flogged into them. I will read it and then return to it. The poem says:

I met a traveller from an antique land

Who said: Two vast and trunkless legs of stone

Stand in the desert. Near them on the sand,

Half sunk, a shatter’d visage lies, whose frown

And wrinkled lip and sneer of cold command

Tell that its sculptor well those passions read

Which yet survive, stamp’d on these lifeless things,

The hand that mock’d them and the heart that fed.

And on the pedestal these words appear:

‘My name is Ozymandias, king of kings:

Look on my works, ye Mighty, and despair!’

Nothing beside remains: round the decay

Of that colossal wreck, boundless and bare,

The lone and level sands stretch far away.

Obviously that poem is about how hard it is for a human to pass on a lasting legacy. Every Australian, when they take on a mortgage, is trying to do something for their family, to do something for themselves, to pass something on to their children et cetera. Many people have studied the poem and the line, ‘My name is Ozymandias, king of kings’. It is amazing how something can be constructed that people think will last forever, but then, as the poem says, ‘Nothing beside remains: round the decay/Of that colossal wreck’. It is probably not dissimilar to Peter Costello’s attack on the Howard legacy with his memoirs coming out, attacking the legacy of John Winston Ozymandias. For the former member for Bennelong, history will judge him differently depending on who writes the history. His former Treasurer has started that process.

To return to that idea of the great Australian dream, it is about passing on security to our children. That is why this legislation before the House is so important. It helps those people on the margins who might not be able to put away enough money to put down a deposit. With the great Australian dream such an important part of Australian culture, it begs the question: what was the coalition government doing to support young families and help them to save for their own home over those 12 years that it was in government? Today many young families are struggling to pay the rent, let alone to save for a deposit on their first home.

As we have seen from the United States mortgage crisis, if you do not get the balance right it can have serious consequences for the rest of the economy. When the United States sneezes, we get the flu over here, so it is very important to get the balance right. I notice the member for Paterson, in his laissez-faire approach to economics, was happy to increase supply and demand with the stroke of a pen here and a bit of number crunching with the New South Wales Minister for Planning there, but it is a much more complicated balance. So many of the jobs in our communities flow from what goes on in the housing sector. I know that in Queensland, where it is still booming even though the market has tightened a little bit, it is still incredibly hard to track down a builder, an electrician or, God forbid, a plumber if you need one. It is a very important part of the economy to make sure we get right, and that is a lesson we can learn from the United States. Thankfully, we have had much better prudential regulation, so we have been spared some of the onslaught that is going on over there.

That is why the Rudd government is introducing these first home saver accounts—to help young people save a bigger deposit for their first home. Obviously, the bigger the deposit, the smaller the mortgage. The smaller the mortgage, the less likely that borrowers will fall into mortgage stress. The passing of the First Home Saver Accounts Bill earlier this year ensured that these accounts would be available from 1 October—not far away at all. Last week, in the suburb of Moorooka in my electorate, I had a meeting with a couple of credit providers to see how they were approaching this initiative. All but one of them were definitely going to be taking on these first home saver accounts. Even though it was only introduced into the parliament not too long ago, they liked the concept, they liked the idea and they thought it was a great product to take to their customers. But for the fact that they had to get the technology right—get their accounts and information processing systems up and in place—they would all be ready to go by 1 October. They were very impressed with this product.

Through the First Home Saver Accounts the government will match 17 per cent of personal savings up to $5,000 a year. That is an annual government contribution of $850. Account holders contribute from after-tax salary and earnings and they are taxed at 15 per cent, the same as superannuation. Government contributions and withdrawals will be tax fee.

The two bills before the House amend the First Home Savers Account Act to finetune this framework. The First Home Saver Accounts (Further Provisions) Amendment Bill introduces changes in four main areas. Firstly, it makes amendments to ensure that the secrecy provisions enable agencies such as the Australian Taxation Office, ATO, the Australian Securities and Investments Commission, ASIC, and the Australian Prudential Regulation Authority, APRA,  to access information while ensuring that privacy is protected. It also allows for information on first home owners to be shared between the Commonwealth and the states and territories.

Secondly, the bill introduces a scheme for dealing with unclaimed money. It might seem hard to believe that people could forget where they have left money, but it does happen. Having worked in the mining and unions sectors, I know that people do move from job to job and leave behind unclaimed money. We do need regulations. The scheme will treat non-superannuation accounts, such as a bank account, the same way that unclaimed money is treated. If an account has been inactive for seven years and no contact can be made with the account holder, the funds will be paid to the Commonwealth. This measure will ensure that first home saver account providers will not have to service small, inactive accounts indefinitely. The bill also ensures that payments under a family law obligation—that is, to an account holder’s spouse—will receive the same treatment as if paid to the account holder. Finally, the bill also makes technical amendments to ensure that taxation of first home saver accounts operates as intended.

The second bill—the First Home Saver Account Providers Supervisory Levy Imposition Bill—will enable the minister to impose a separate levy on account providers. This levy will cover the costs of APRA’s supervision of the financial institutions offering first home saver accounts.

I read a report in the Courier Mail recently that questioned the efficacy of first home saver accounts. The article said that few banks or credit unions had signed up to offer the accounts. That might have been a little premature, because since then the ANZ Bank and quite a few credit unions have signed up. As I said, representatives of significant credit unions and building societies in my electorate with whom I met indicated that they will definitely be signing as soon as they get their ducks lined up. It was reassuring to have the meeting and to see how supportive the people at the front line were of these first home saver accounts. Many credit unions in my electorate will be offering the product.

The first home saver accounts bills build on many other Rudd government initiatives designed to tackle the housing affordability crisis. We have heard all about the benefits of long-term saving rather than short-term spending. That is the problem which we are trying to address and which has crept into our society over the past 10 to 20 years. Some of the other initiatives include investing $512 million over five years to cut the planning and infrastructure costs of new housing developments. This is the information that the member for Paterson seemed to be unaware of. It is certainly part of our assault on red tape.

In my former life as both an articled clerk and a solicitor, I was always shocked about the costs that could creep into the purchase of a house. It is funny because if you said to someone, ‘Can you pull out another $500 so that I can buy some beer,’ they would blanch. But when people are buying a $400,000 house, they do not get up in arms about the $1,000 here and $500 there that is requested because it is a relatively small percentage of the total cost of the house. Thankfully, the Rudd government has got up in arms about it and is doing something positive by investing $512 million.

What will this do? It will reduce costs for new home buyers so that effectively they will receive grants of up to $10,000 per home by working with the local governments and the states. That $10,000 rolls off the tongue pretty easily. What does $10,000 represent? I did some testing last night at the local bottle shop. It would buy 312 cartons of beer at $31.95 a carton—that is what I paid last night. Those 312 cartons represent 7,511.74 beers, which would be more than five beers a night for four years. I suggest that that would keep anyone happy. Alternatively, if you went to a restaurant—I will not name it, but let us say a Scottish fast-food restaurant—you could get a large meal every night for 1,438 nights. If beer or fast food are not your cup of tea and you just want two litres of milk at $3.50, that is eight years worth of milk, or 2,857 cartons. So, $10,000 is not inconsequential.

I welcome the announcement made by the Prime Minister and the Minister for Housing on Monday when they released the guidelines for this program. A lot of them have flowed out of the National Summit on Housing Affordability. These initiatives, ideas and innovative projects have flowed from that. Not only are we helping first home buyers; we have also set up the National Rental Affordability Scheme, providing $623 million to help create 50,000 new affordable rental properties across Australia. Contrast this with the Howard government’s approach, which was about giving a boon to landlords and not extending a helping hand to those in the community who are doing it tough. Over the next five years this government will spend $150 million to build up to 600 new houses and units for individuals and families who would otherwise be sleeping rough.

This is a multipronged approach to tackling the very complex and difficult issue that is the housing crisis. I am proud to say that the first white paper commissioned by the Rudd government in January this year dealt with this complex issue. One of the first tasks the member for Bonner and I had as new MPs was to talk to people who were doing it tough. Tackling homelessness was one of the first initiatives of this government with heart. We were trying to do what we could to address this very complicated problem after too many issues had developed over the years. I am a very strong supporter of first home saver accounts because I believe they will be a significant benefit to young families in my electorate of Moreton. This is a substantial initiative and I commend the bill to the House.

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