Anne McEwen (SA, Australian Labor Party) Share this | Hansard source

The incorporated speech read as follows—

Over the last decade it has become increasingly difficult for people to purchase a home. The rising cost of living has hit many Australians hard and it is our responsibility to ease this pressure as much as possible. Australians suffered under the I 0 interest rate rises that occurred under the Liberal Party and while they suffered, the Liberal Party wasted taxpayer money on their spending sprees.

When Labor came into Government, Government spending was running at between four and five per cent growth on the part of the Coalition. We have reduced that to just on one per cent.

If we had continued this irresponsible spending, at the same growth level that the Howard Government had it running at for the last several years, it would have cost taxpayers an extra $23 billion worth of outlays. Another $23 billion of taxpayers’ money would have been blown away. Those opposite spent recklessly with the money of the Australian public and the damage that recklessness has caused to this economy is still evident today.

Thankfully, families were able to breathe a slight sigh of relief when the Reserve Bank of Australia’s recently made an interest rate cut. This is the first time families have had a rate cut in 7 years. For 740,000 first time buyers, this is the first time they have experienced any mortgage relief at all. Families and the Government expect banks to pass on this rate cut as quickly as they passed on the 10 consecutive rate rises under the Liberal Party. Australians need to feel the benefit of this cut.

Every economy in the world today is facing tough economic conditions. The global credit crunch and global oil price shock have buffeted confidence and share markets and are slowing global growth. Wall Street stocks have tumbled and consumer confidence across the OECD economies has fallen to its lowest point in almost 30 years.

Here at home, we have seen the cost of living soar and the reality of this is that people are not only struggling to put food on the table and fill their petrol tanks, they are struggling to put a roof over their head. No one does it tougher than the homeless.

According to the Australian Bureau of Statistics report Counting the Homeless Australia 2006, the number of Australians who sleep rough rose by 16 per cent in the five years between 2001 and 2006.

The report showed there were 105,000 Australians who were homeless on Census night in 2006, up from 99,900 in 2001 with 16,000 rough sleepers in 2006, up from 14,000 five years earlier.

The report shows a shift in the type of households who are becoming homeless—with more couples and families becoming homeless and slightly fewer singles. Addressing homelessness is a major priority for the Government, and we have already announced an additional $150 million to build new homes for homeless Australians under A Place to Call Home.

The Government released its Green Paper on homelessness in May and is currently developing a White Paper to set the agenda for tackling homelessness to 2020. The White Paper is likely to be publicly released in early October.

Labor is not only dedicated to assisting those already homeless, it is also determined to prevent more Australians ending up on the streets. With more families becoming homeless, we have recognised that something must be done about housing affordability.

During the election campaign, Labor put forward a strong housing policy to assist Australians in keeping a roof over their head; these bills are a part of that. The Rudd Labor Government will invest around $1.2 billion over four years into the First Home Saver Account plan. One of the biggest barriers to home ownership is of course saving for a deposit; First Home Saver Accounts will assist people to get that deposit, providing a tax effective way for Australians to save for a first home through a combination of government contributions and low taxes.

For example, a couple each earning average incomes and both putting aside I 0 per cent of their income into individual first home saver accounts would be able to save more than $88,000 after five years. Consumers who receive these accounts will benefit in a number of ways. For example, any contributions made to these accounts will not be subject to tax and investment earnings or interest will be taxed at a minimal rate of 15 per cent and withdrawals from a first home saver account will be tax free where they are used to purchase a first home to live in.

Contributions may be made to the account 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.

A wide variety of providers will be able to offer these accounts, including public offer superannuation providers, life insurers, banks, and credit unions. 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.

The impact and benefits of Labor’s first home saver accounts extend further than just those individuals. 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.

Earlier this year, the First Home Saver Accounts Act 2008 and the First Home Saver Accounts (Consequential Amendments) Act 2008 and the Income Tax (First Home Saver Accounts Misuse Tax) Act 2008 implemented the Government’s election commitment to introduce these accounts.

The bills before us today implement further aspects of the Government’s policy. The two bills are the First Home Saver Accounts (Further Provisions) Amendment Bill 2008 and the First Home Saver Account Providers Supervisory Levy Imposition Bill 2008.

The First Home Saver Accounts (Further Provisions) Amendment Bill 2008 includes various provisions to make the scheme operational. These include:

• a system for dealing with unclaimed money;
• amendments to secrecy and information sharing provisions between the ATO, APRA and ASIC; and
• dealing comprehensively with family law situations.

The system for dealing with unclaimed money will be similar to the way other non-superannuation investments are currently administered. Accounts which have been inactive for seven years, and where the provider has been unable to contact the account holder, will be paid to the Commonwealth. Individuals who later identify themselves to the account provider will be able to reclaim their money. These provisions will ensure that First Home Saver Account providers are not required to service small, inactive accounts, reducing the burden on providers.

The Life Insurance Act 1995 (section 216) and the Banking Act 1959 (section 69) provide for the treatment of money, in a life insurance company and bank account respectively, which become unclaimed.

These Acts generally provide that a policy or account which is inactive for seven years becomes unclaimed money and is to be paid to the Commonwealth. Without amendments, these Acts would apply to FHSA provided by life insurance companies and banks. Because of the particular requirements in those Acts, this makes it doubtful whether the Commonwealth would be able to pay unclaimed moneys back to the bank or life insurance company unless the account holder had satisfied the FHA withdrawal rules, including the four-year rule in the main case of a home acquisition payment.

The amendments to the secrecy and information sharing provisions will ensure the secrecy provisions enable Commonwealth agencies to share information they require in order to fulfil their statutory obligations, while also ensuring the privacy of account holders is protected.

Part of these changes is to do with the exchange of information between the Commonwealth and the States and Territories. In each State and Territory, the Commissioner of State or Territory Taxation administers the State or Territory’s First Home Owner Grant Acts. State or Territory Commissioners do extensive compliance work in relation to the grants, including whether home buyers do actually live in the homes that they buy. Having access to this information would clearly provide great assistance to the Commissioner in the administration of First Home Saver Accounts, particularly in terms of compliance work.

These amendments are necessary to make that information sharing possible. They put in place provisions that will enable the Commissioner to provide First Home Saver Account information to State and Territory taxation officers in instances where First Home Owner Grant information can be provided in return.

A number of changes will be made so that Family Law situations are dealt with effectively. Currently, if a First Home Savers Account provider accepts a contribution which breaches the account balance cap, it can be returned to the account holder within 30 days, and the account provider will not commit an offence. This is not an appropriate outcome where the contribution is a result of a family law obligation. An amendment is being made to allow the account provider in such cases to return the contribution to the account provider from which the contribution came.

To ensure payments and contributions to superannuation made under a family law obligation are treated the same as other payments and contributions, a number of provisions are being modified to refer only to payments or contributions from a First Home Saver Account, rather than referring to the sections under which the payments or contributions are made

An amendment is made to ensure account providers who act in good faith in relation to a family law obligation will not be liable for loss or damage. The Government wants to ensure that these accounts create no disadvantage to any party.

The Government acknowledges that there are likely to be medium implementation costs for providers who choose to offer FHSAs. For this reason the design of the initiative as reflected in the law has sought to minimise compliance costs for account providers.

The second bill we are debating today, First Home Saver Account Providers Supervisory Levy Imposition Bill 2008, imposes a levy in relation to the provision of first home saver accounts. It also establishes the administrative framework for the collection of these levies to fund Australian Prudential Regulation Authority’s role in the supervision of the accounts.

The levy will be collected from the 2009-10 financial year and will have two components: the restricted component (related to the cost of supervision) and the unrestricted component (related to potential system impact and vertical equity considerations). Both components are determined as a proportion of assets, with minimum and maximum limits for the restricted component.

The bill does not set the actual amount of the levies but only provides a formula for their calculation. The Treasurer must later determine the actual amounts and percentages to be used in the formula, with such figures to be contained in a disallowable legislative instrument.

Further demonstration of our commitment to making housing more affordable is the Housing Affordability Fund, guidelines of which were released last Monday. Local, State, and Territory Governments and private companies can now apply for grants from the Rudd Government’s Housing Affordability Fund to help reduce the cost of building new homes.

The Housing Affordability Fund is a Rudd Government initiative that invests $512 million over five years to target the planning and infrastructure costs that are incurred when building new housing developments.

Tens of thousands of new home buyers are set to directly benefit from the Fund, with savings coming from grants of up to $10 000 per home, reduced holding costs, and contributions from other levels of government.

The Fund will also address some of the other upfront costs faced by developers that are ultimately passed on to home buyers—like infrastructure charges for the installation of sewerage, roads, cycle-ways and parks.

State, Territory and local governments and private companies are all eligible to apply for grants. The Housing Affordability Fund is a critical part of the Australian Government’s housing strategy. The 2008-09 Budget included $2.2 billion in new housing affordability investments:

• $623 million National Rental Affordability Scheme to encourage the building of up to 50,000 new rental properties;
• $150 million Place to Call Home initiative to build hundreds of new homes for the homeless across Australia; as well as a
• $1 .2 billion investment in the First Home Saver Accounts that we are discussing today.

These bills are a significant element of the Rudd Government’s plan to boost housing supply and assist those who need it most, particularly first home buyers and renters on low and moderate incomes. I commend the bills to the Senate.