Jenny Ware (Hughes, Liberal Party) Share this | Hansard source

I rise to give support to the Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) Bill 2022. I've spoken in this place multiple times now about the current housing crisis, and I'm passionate about increasing affordable housing opportunities for all Australians, whether they be families, single parents or young couples. Most of my professional career before entering parliament was geared towards how local and state government planning laws and policies can be used to provide housing choice, housing supply, for end users, both potential homeowners and tenants. The federal government also has an important role to play and can address affordable housing problems. This bill demonstrates one of those ways. If enacted, the bill will benefit both potential new home buyers and current home-owning pensioners and other income support recipients. This legislation will support pensioners during the sale and purchase of a new home, by extending the existing assets test exemption for principal home sale proceeds which a person intends to use to purchase a new principal home from 12 months to 24 months. The bill will change both the Social Security Act and the Veterans' Entitlements Act. This means that this bill will support both our pensioners and our veterans.

Home sale proceeds are currently subject to deeming provisions, with a lower deeming rate of 0.25 applied to the value of financial assets up to a deeming threshold of $56,400 for singles and $93,600 for couples, combined. However, for assets above these thresholds, a deeming rate of 2.25 per cent currently applies. The legislation, if enacted, will also begin to apply on the lower threshold deeming rate of 0.25 per cent to assets which are the proceeds from the sale of a home.

Having regard to our current housing affordability crisis, we in this parliament must do all that we can to remove barriers of entry to the housing market. This means that we must increase the supply of available homes on the market. We must increase the variety of choice for new homebuyers. We must be innovative in the ways that we approach and address the housing supply and housing affordability issues currently facing Australians. This bill, if enacted, will provide some answers and assistance to these people.

We know that 85 per cent of renters aspire to own their own home, and this has always been part of the great Australian dream. A home is not just a financial investment; it is also an investment in the family. It is an investment in the local community. Homeownership provides security. Homeownership provides a sense of place. Homeownership provides financial stability. Understandably, as a core tenet of being Australian, families want to grow in a home which they know they can call their own. Owning your own home allows families the flexibility to make renovations, to paint walls and to hang picture frames.

As a parent, in many ways I dread my children growing up and moving out of the home, although, as a parent currently of 16-year-old teenagers, some days I think that day will not come soon enough! It is, however, an unfortunate, unavoidable part of the circle of life that children must leave the nest and find their own independence. When this happens, the once-full family home becomes much larger and emptier. Although a home that you've worked your whole life to pay off is an emotional attachment, it is often no longer necessary for a retiring couple to continue living in a large home, often also with a very large outdoor garden. Indeed, it can become a burden, particularly into older age.

As families transition into a well-earned retirement and begin to rely on an age pension or other income support, it becomes a question of whether or not it is worthwhile to sell the principal home, an asset which they have spent their whole life paying off. Many of these couples might otherwise consider downsizing into a smaller, more manageable property. However, there might currently be a disincentive for these couples to downsize into a property which, although smaller, could also have a much lower value than their original property, leaving a couple with a cash surplus which will affect their ability to receive the age pension.

Currently, the existing arrangements allow an exemption on the proceeds of the sale of a home for up to 12 months, so long as the person still intends to use the proceeds to purchase, build, repair or renovate a new principal home. This bill extends, from 12 to 24 months, the assets test exemption for principal home sale proceeds which a person intends to use to purchase a new principal home. That 12-month extenuating circumstance will be available on a case-by-case basis.

Whilst this is currently a government bill, this was a coalition policy promised at the last election. The coalition firmly believes in reducing the cost of living and adopted this policy to give seniors and also veterans who are selling in the current property market greater confidence to downsize into something more suitable. This then provides greater confidence and certainty for their future financial planning. The coalition estimates that, as a result of these measures, around 890,000 Australians will now have greater certainty in their fortnightly social security payments. On our estimates, this benefits 450,000 age pensioners and 440,000 recipients of other payments with financial asset tests.

The coalition has a strong track record helping older Australians who want to downsize, freeing up family homes in the market for younger families. Evidence of this track record was a major change in the budget of 2017-18, where the coalition government first announced that those aged 65 or over could use up to $300,000 from the proceeds of selling their home to make a non-concessional contribution into superannuation. Under this measure, more than 36,000 individuals have contributed a cumulative total of $8.9 billion to their superannuation. Earlier this year, the coalition further enhanced this measure by reducing the eligibility age for making downsizing contributions into superannuation from 65 to 60 years of age. This is providing far more flexibility for people as they are financially planning their future. During the recent federal election, the coalition announced that, from 1 July 2022, eligibility will be reduced to 55 years, further increasing the opportunity for older Australians to downsize. This is now a policy which the Labor government has adopted.

The coalition has also supported almost 60,000 first home buyers and single-parent families into homeownership through the First Home Loan Deposit scheme, the New Home Guarantee and the Family Home Guarantee. The New Home Guarantee allowed prospective homeowners to purchase a home with a deposit of as little as five per cent, and the Family Home Guarantee allowed prospective homeowners to purchase a home with a deposit of as little as two per cent. If re-elected, the coalition would have established the Super Home Buyer scheme, allowing first home buyers to invest up to 40 per cent of their superannuation, to a maximum of $50,000, to help with the purchase of their first home.

To conclude, I have now spoken on a number of occasions about housing affordability, housing supply issues and providing better choice for Australians. For all of the reasons mentioned, I congratulate the Labor government for adopting this excellent initiative of the coalition, and I reaffirm my support for this bill.

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