Scott Ludlam (WA, Australian Greens) Share this | Hansard source

I did. And I am really looking forward to your contribution. I will speak in a bit more depth when we get to the committee stage as to the purpose of these amendments. This was something, I believe, that was supported unanimously—certainly when it was introduced by the Rudd government. I went back to look at the comments that I made and that some other senators made in 2008 when this measure was introduced. The situation for first home buyers is worse than it was when this measure was introduced.

I want to make a very careful distinction here between the First Home Saver Accounts and the first home buyer grants, which are largely issued by the states. I am not sure that there is any Commonwealth tax expenditure left in first home buyer grants, but they have a direct inflationary impact on house prices. You simply give people money, and that inflates property prices by roughly the same amount. And, actually, it does not help overall housing affordability. Whereas this is arguably a bit of a blunt instrument as well, and I understand that it is not perfect. But incentivising and encouraging first home buyers to save the deposit when—and, frequently, they will be paying as much of their wages on a mortgage as rent—the hurdle is getting the deposit in the bank. We do not want to be encouraging banks and lending institutions to lower the amount of deposits that are required. In fact, in a very low interest rate environment and under conditions of substantial overheating in our housing market, I would argue that having people come up with a substantial deposit is a good idea. But incentivising it, as this scheme did, would appear to me to be the right way to go.

For $134 million over five years—which is what, I understand, Treasury has estimated over the forward estimates will be saved by the abolition of this scheme—is the size of the tax expenditures and the concessions that we hand over to property investors through negative gearing and capital gains tax exemptions every six days. That is the scale of the incentives that we are talking about here. While still propping up property investors and quite heavily tilting the table in favour of investors against people in public housing, people in the broader private rental market, first home buyers and people who are struggling with the experience of homelessness, what we are doing is pulling one more prop out of the system—one small incentive that was there.

Maybe, Senator Cormann, one limb of your argument will be that it simply was not taken up enough, that enough people were not taking advantage of it, but for—