Brett Raguse (Forde, Australian Labor Party) Share this | Hansard source

I will continue my remarks on the First Home Saver Accounts Bill 2008 and related bills, which I commenced prior to question time. In doing that I will not go through a range of points but I will continue on the theme of the importance of this particular legislation for the electorate of Forde. It is an area in south-east Queensland that is under intense development and there is a lot of economic activity. We are seeing what I would suggest are some of the worst examples of the lack of home availability and affordability.

This bill will go some way towards relieving some of the pressures, certainly on young families. It is very much about providing solutions. I will reiterate some of the features of the bill before I give relevance to the concerns within my electorate. This is about the Australian dream—people getting into their own homes and having the ability to save their deposits. Essentially, the price rises in Queensland in particular have been quite horrendous. The criteria in this bill cover more than just young people; they cover all people who qualify to buy their first home. The biggest hurdle for those wishing to buy is saving for their deposit. The Rudd government recognises this and will provide $1.2 billion over four years to help first home buyers save for their first home. First home saver accounts will provide a simple, straightforward and effective way for Australians to save for their first home. I will give a little detail about the bill before I talk about the benefits of this legislation.

The first $5,000 of individual contributions to these accounts each year will attract a 17 per cent government contribution, providing more assistance to average income earners—a great incentive for our next generation of home buyers who may currently feel denied the opportunity. They have felt the pressure of trying to get a start in the market. For every $1,000 contributed the government will provide $170 tax free. Earnings will be taxed at a low rate of 15 per cent and withdrawals will be tax free when used to buy or build a first home in which to live. The accounts will allow a couple, each on average earnings and saving 10 per cent of their incomes, to accumulate a deposit of $88,500 after five years. This is about $12,600 more than would have been possible by saving for the deposit on their own. I am so concerned about these issues of housing generally that I have a separate motion before the House to discuss them further at some stage. The relevance of this bill is that it allows the government to give some relief to young families.

It is all about the great Australian dream—owning your own home. I bought my first home when I was 21. It cost me $19,000 and I was on a salary of about $15,000. So the house price was a little more than one year’s salary. Today house prices are about seven times annual salary. This is particularly true for the residents of my electorate who are finding it very difficult to enter the market. We should also understand that this is a raft and clarifies very much the Rudd government’s approach to young families and families who need relief. It is a piece of the jigsaw to give relief to workers and their families. The Howard government probably ignored these warning signs. I know that for a long time we called for a relief in public housing in Queensland. Even that would have certainly given us some relief. I heard the opposition speaking this morning about rent assistance and how rent assistance funds should be channelled into some other scheme. Essentially, we are stuck with that process—people who are dependent on that particular rent assistance scheme. This is another era; this is a complete approach to providing affordable housing through savings.

We have heard many times in the debate over the budget—we hear it from our Prime Minister and from our Treasurer—that it is very much about putting downward pressure on inflation, which is then going to put downward pressure on interest rates. In that environment the culture of saving is very, very important. Re-engaging young people with the ability to buy their home through an assisted program of savings has to take top marks. It is interesting to note that the opposition probably do not quite understand that our total approach to this is about providing a whole range of approaches. One of the challenges, of course, is that the availability of land is always going to have an effect on the prices of houses. It was suggested that maybe the government should look at plans. We have done that.

Our raft of proposals in this bill and in other legislation talks about our first home saver accounts, which I have just spoken about. We also have our Housing Affordability Fund, which will increase housing supply by providing money for local infrastructure and by giving state and local governments incentives to lower development charges. That is directly in response to some of the challenges that were made this morning by the opposition. We have the National Rental Affordability Scheme, which will provide investors with tax incentives to increase the supply of new affordable rental properties across Australia, saving 50,000 low- to middle-income families 20 per cent of their rental bills. Further to that we have a better approach to land release, with Commonwealth surplus land being freed for housing development or community infrastructure.

The pressure is no more obvious than in south-east Queensland where, with the economic boom—the resources boom—and a lot of people moving to Queensland, this whole raft of options will give us in Queensland and certainly in the seat of Forde some relief. We really are looking for solutions but there is negativity coming from the opposition. While generally they support this plan, they want to pick off individual points and drill down into some of the aspects of the bill without understanding that this is part of those four other proposals that I mentioned. As an example, in my own family I was very pleased that on 31 May my nephew and his wife, Mitchell and Jess Raguse, had their first child. They are a young family who want to get their own home. I know that they were very, very excited by the prospect of this particular piece of legislation. They are already trying to save furiously for their first home, so this bill is certainly going to give them some relief on that.

I mentioned that this is not only about the mortgage stress but about the whole supply and demand. The opposition challenged us today by talking about the bill as not being a solution to supply. The reality is that it is all about providing new housing. Young people will have the option to buy an existing home or to build their own home. Of course, one reason we have major issues with rental property and rental availability is that there are just not enough properties available. So any encouragement to build more homes to get young people and others into their own homes will then free up that rental market. In fact the rental market in my electorate of Forde has probably been most affected, with increases of up to 60 per cent in 18 months. It is quite phenomenal. The First Home Savers Accounts Bill and associated bills are an important start for young Australians and for working families who want to make the great Australian dream of owning their own home a reality. This bill will, I believe, promote the culture of saving, which is a necessary tool to help put downward pressure on interest rates and inflation while giving Australians an opportunity to own their own homes. For these reasons, I commend these bills to the House.

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