James Stevens (Sturt, Liberal Party) Share this | Hansard source

I rise to speak on the Treasury Laws Amendment (2023 Measures No. 3) Bill 2023. It's great to have two TLABs to fill up our day today! I rise to make a contribution on this bill but in particular on the First Home Super Saver Scheme, the FHSSS, because this was one of the great enduring legacies of the previous government. It is an excellent policy to do all we can to help people save for a deposit for their first home.

Homeownership is in the DNA of all Australians. We know when we say 'the Australian dream' that we're talking about the dream of owning our own home. In fact, it's completely intertwined with the legacy of the Liberal Party; we've always been about homeownership and helping as many Australians as possible to own their own home. We see homeownership as absolutely critical to economic independence for people and families. When people buy a home, almost everyone buys a home with a mortgage. You then strive to pay off that mortgage and, from the point of owning the home, particularly when you own it without the encumbrance of a mortgage to a bank, you have got that economic independence, which completely changes the decision-making of the family budget and puts people in such a position of economic security.

Regrettably, at the moment, the trends are not going in the direction we would want them to when it comes to homeownership, particularly for first home buyers. Too many younger people are starting to see the dream of homeownership as being unattainable to them. There are a range of very significant policy challenges in this area, and, frankly, a lot of them are not in the control of the Commonwealth government. We know that state and local governments have the policy levers around land supply and planning and zoning and building approvals and all the red tape. And a lot of the taxes that they levy—land tax and stamp duty et cetera—are not in the control of the Commonwealth government.

One of the most significant ones that is in the control of the Commonwealth government is migration. Clearly, demand for dwellings is going to be driven very much by population growth, and the biggest contributor to population growth in our country has been, ever since the post Second World War era, the migration intake. We in the coalition are all for sensible and managed migration, but the housing situation in this country right now is not designed against the immigration intake that the government has projected in their budget, so homeownership is a challenge and a dream that is beyond the reach of a growing number of young Australians. We need to turn that around. We don't want to live in a country where our young people have given up the aspiration of owning a home, because, as I say, the economic independence that you get from owning a home completely transforms your economic security and your power to make decisions about your future and your family's future.

The First Home Super Saver Scheme, which has been in place for about five years, is a great way to give young first home owners or aspirants to first home ownership a way of saving with some tax preference within a structure that keeps the cost of that saving down for them as well. Obviously we all have superannuation anyway. The ability to contribute to that super fund beyond the compulsory employer contributions within the capped frameworks puts young people who are eligible for the scheme in a position to subsequently draw that saved amount out when they are ready to purchase their first home. Saving the deposit has been, until recently, the biggest hurdle for younger people in particular. We know that capital values of property compared to average incomes have blown out dramatically.

Regrettably, there's a second challenge now, which is the ever-growing interest rates and the burden of interest-rate repayments. In this debate recently, when we've talked about interest rates and referred to previous periods of time when interest rates have been much higher, that was absolutely in a period when the capital value of properties that people were aspiring to purchase as their first home had a much different relativity to their income. A few decades ago, when people talked about buying their first home, their first home was perhaps double or triple the value of their annual salary, whereas now most people are talking about something that is probably towards 10 times their salary. That dramatically changes the equation. In particular, it dramatically changes the equation to save for the deposit. As we all know and respect and understand, it's very important that a reasonable portion of the value of a home is equity, not borrowings.

It tends to be a figure of about 20 per cent. That is a figure that puts the banks in a position where they don't have to impose things like mortgage insurance and it gives them a high degree of confidence against the other measures that they have to take into consideration, such as serviceability of not just the current interest rate but the buffer, which we all know was increased a couple of years ago under the APRA framework.

Getting that 20 per cent deposit puts people in a very strong position to secure finance. A 20 per cent deposit comes after all the other costs you've got to take into account as well, such as stamp duty, conveyancing charges et cetera. Of course, when you purchase a home, you always expect to have some initial costs: moving-in costs and other purchases that might be necessary to make the home appropriate for you in your immediate future there. Getting that 20 per cent deposit on a home that might cost seven or eight times your annual salary—your pre-tax salary, I might add—is an enormous challenge, so the First Home Super Saver scheme was designed by the previous coalition government to give young people a much better chance of saving a large portion of that deposit. It has been increased to $50,000. That is the maximum you can withdraw out of your super under this scheme. That $50,000 is a very significant portion of a deposit. Of course, that can make a big difference when it comes to how people plan to try to save that deposit and access the Australian dream of purchasing their own home.

Within this bill there are some technical changes to the way in which the scheme operates and to the Commissioner of Taxation's powers around this scheme. The scheme is one where eligible applicants do in fact apply to their fund to say, 'I've been contributing this amount of money. That's all within the rules of the scheme. I'm now off to purchase my first home and, therefore, I'm applying to you to withdraw those funds.' There has obviously been some developed understanding of how that needs to operate in a fairer away, how that can be cleaner and how the Commissioner of Taxation can have some clearer powers around that, and we want to do everything we can to support change that means that the whole point and purpose of this scheme, which is to help people buy their first home and save that deposit, is protected for those individuals.

We are, indeed, seeing a concerning drift more broadly in superannuation around a whole range of policy areas and also around the way in which some super funds have been behaving with regard to people accessing their own money. Superannuation doesn't belong to the super funds; it belongs to the people who are putting that money away for their retirement. The people whose money it is are what super is about, not board fees for the union officials who serve on the funds or first-class fares to Davos conventions every year for those same directors and all the other ways in which money is being paid, particularly by the industry super funds, to all sorts of shady organisations to do we're not quite sure what. We've made some important changes and we're now seeing, finally, some important investigations into the conduct of some of these money-go-round activities. We suggest it needs to be confirmed whether or not those activities are in the best interests of the members of the super funds and them getting the maximum return on those funds invested for their own retirement. That's what super is about.

We're now seeing, of course, this creep of tax changes around super. There is the new doubling of tax on the earnings of super funds over $3 million not indexed. We heard in the last TLAB debate that the member for Canberra has admitted that Treasury has modelled that 10 per cent of young people today will trigger that $3 million balance. Ten per cent of people are now going to be paying double the concessional tax rate. So, instead of 15 per cent, they will be paying 30 per cent on the earnings of their funds. That's if the Treasury modelling is accurate around inflation. The fact is that this isn't indexed.

The reason it's growing is obviously the deteriorating value of money based on inflation, and whether or not Treasury have got this prediction right—because they haven't in the past. Inflation has been running much hotter over the last 12 months than any of the predictions and the forecasts. At best, 10 per cent of young people today will be having the tax on their super funds double.

When we introduced this First Home Buyer Super Scheme, it was not met with a great warmness from the then opposition and now government, so I suppose we are just grateful that in this bill they are not scrapping the scheme. The ultimate economic security you can achieve is purchasing a home as early as you can manage in your life, to pay off that home loan through your career and, when you reach retirement, to own your home outright and to have a significant amount of superannuation that allows you to support your retirement. We thank and are grateful to the people that self-fund their retirement—they take an enormous burden off government by funding their own retirement. We are grateful to them and we thank them. They should not be treated as an opportunity to ratchet up taxes on the savings they have provisioned for their retirement—quite the reverse.

This First Home Buyer Super Scheme allows people to progress down that path and put extra into super beyond the employer mandated contribution. That extra builds up within the fund and can be withdrawn to assist you to save your deposit for your first home, buy your first home earlier and, hopefully, pay it off earlier. When you sell that home you have got to put the proceeds back in, and then you reach retirement, hopefully, and you don't have to use the lump sum of your super to pay off the rest of your mortgage that you could not pay off because it took you much longer to buy your first home because we weren't helping you to save for your deposit. That's what we want in the coalition. We want people to buy a home, own that home, pay the mortgage off as rapidly as possible and achieve the economic independence that home ownership gives to them, while also contributing to superannuation under the framework that's in place. People can have a very happy, healthy and enjoyable retirement owning their own home and having enough superannuation to give them a very happy and comfortable retirement, which they deserve.

We thank superannuant, self-funded retirees. We in the coalition are here to support you, back you and stand up against any attempt to raid your savings and take that from you because that's your money. The money in super belongs to the people whose savings that is—not the super funds—and the First Home Buyer Super Scheme is a great example of using superannuation to also help people achieve the Australian dream of home ownership.

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