Dana Wortley (SA, Australian Labor Party) Share this | Hansard source

The incorporated speech read as follows—

Mr President, I rise to speak to the First Home Saver Accounts Bill 2008 and related bills.

The purpose of this bill and the related legislation is simple: it is designed to help many Australians realise the dream of owning their own home.

As we know the cost of housing has skyrocketed over the past decade ... that-the dream has become more and more remote for families, couples and singles around the nation ... more and more of a struggle for many people just wanting a modest place to call their own...a place to call home.

It doesn’t seem that long ago in my home state of South Australia that $250,000 would buy an extremely well-appointed house in Adelaide or an inner-city suburb.

The real estate pages make it clear that these days a similar property would fetch anywhere between $500,000 and $800,000.

A 3-bedroom unit that sold for $102,000 in 1995, was snapped up at $321,000 in 2007.

The picture is clear. It’s tough for people trying to break into the market in 2008.

Median Adelaide house prices for the March quarter this year, according to the Real Estate Institute of South Australia, were more than $350,000.

Eight years ago, in March 2000, the median price for a metropolitan house was around $130,000.

The reality is, that would-be first homebuyers still are battling to gain a foothold on the path to owning their own home.

In the bills before us today, ...

The Government is honouring a promise to the Australian people to work for better housing affordability ... to bring the dream back within reach.

The main bill before us establishes First Home Saver Accounts, which are low-tax accounts aimed at giving aspiring homebuyers a boost.

The accounts are an uncomplicated, tax-effective means by which Australians can save up for their first home, resulting from the partnership of low taxes and Government contributions.

They aim to give a hand to those working hard and saving hard for their first home.

The Government will add 17 per cent on the first $5000 put in by individuals, meaning that through the scheme, a couple on average incomes will be able to save a deposit of more than $88,000 after five years.

That’s up to $12,600 more towards the cost of a home than the same couple would save using an ordinary deposit account, naturally dependent on returns.

As an added benefit, the First Home Saver Accounts will provide young people with a real incentive to save.

This is not only a Government determined to reform, revamp, repair and re-energise a society ...

The Rudd Labor Government is a government that, unlike its predecessor, believes in listening to the people who elected it ... and working towards a better, fairer, more inclusive nation for the young people of today and tomorrow.

This Government believes in working with the Australian people ... that’s why, after broad consultation, this policy has further been improved.

The resultant legislation makes for a program that is more straightforward—and, crucially, fairer.

Among these changes for the better, we’ve removed the $1000 upfront contribution and the link to residency.

This will make it simpler for people who don’t currently have savings, to open an account and get a foot in the door of home ownership.

In another sensible, simplifying move, the Government has moved to an overall indexed account balance limit of $75,000, rather than the $10,000 annual contributions limit previously proposed.

Another important aspect of the scheme is that parents and grandparents will be able to put money into accounts for their children and grandchildren.

And parents who want to open an account for their child also will benefit from the removal of the required $1,000 upfront deposit.

These factors will see further benefits to those saving for their first home.

The second bill in the package, puts forward consequential amendments needed to establish the First Home Saver Accounts.

These amendments largely relate to tax and corporations law.

Individual contributions to the First Home Saver Accounts are not taxed as they come out of participants’ income after tax.

The government’s contributions to the accounts will not be subject to tax.

There are other tax savings, too, with these special new accounts.

Withdrawals to buy a first home will not be taxed, while earnings on the accounts will be taxed to the account provider at 15 per cent.

With a regular account, the individual account holders would be taxed on any earnings at their marginal income tax rates.

To ensure those taking part don’t misuse the accounts, the third bill in the package establishes the First Home Saver Account Misuse Tax, which will be applied to recoup any benefits improperly obtained.

Overall, these bills give people striving for their first home a chance to gain this important asset.

They will give Australians a chance to take part more fully in society and to build more economic and social stability for themselves and their families.

I commend these bills to the Senate.