Linda Kirk (SA, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Superannuation and Corporate Law, Senator Sherry. Can the minister update the Senate on the progress of its election commitment to help hardworking first home buyers fulfil the great Australian dream of homeownership?

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

Thank you, Senator Kirk, for the very important question. Unlike the Liberal opposition, at the last election the Labor Party, now in government, took housing affordability very, very seriously. We take the dream of homeownership very seriously. It was only the Rudd Labor government that committed to a real, deliverable scheme to help struggling, hardworking young people and young families realise that goal. I know the Liberal opposition do not want to hear this, but it is only the Rudd Labor government that took this challenge seriously when we promised to introduce first home saver accounts, a superannuation like first home savings mechanism and tax advantage for young Australians. The difference between the Labor government and the Liberal opposition is we deliver on our election commitments. You break yours.

Honourable Senators:

Honourable senators interjecting—

Alan Ferguson (President) Share this | Link to this | Hansard source

Order! Senator Sherry, it might help if you address your remarks to the chair.

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

Thank you, Mr President. We deliver on our election commitments; the Liberal opposition break theirs. We all remember core and non-core. The Labor government is moving quickly to implement its election promise, the first home saver accounts. We understand that hardworking families are under pressure in this area and we are taking action to help them address the cost of living legacy.

From 1 July 2008 we will have these low-tax superannuation style accounts. They will allow, for example, a couple each earning an average income to save a deposit of more than $85,000 after five years of disciplined saving. While exact figures will depend on the rate of return, the figure of $85,000 is up to $14,000 more than if that couple had saved using an ordinary bank or credit union type deposit account. That is up to $14,000 more because of the tax preferred treatment of the first home saver account.

Unlike the Liberal opposition, who spent much of their time in government whipping up disjointed policies and announcements with scant regard to their pork-barrelling—particularly from the former Minister for Finance and Administration, Senator Minchin, now leader of the Liberal Party in this place—we do have regard for the fiscal discipline that is required, but we will be delivering on all our election promises within the fiscal discipline that we have set out. Our first home saver accounts will be yet another part of our plan to help win the war on inflation. The accounts will also encourage private saving, and that is very important in an economic context. They will also put downward pressure on inflation and interest rates.

The accounts are expected to hold some $4 billion in savings after just four years. It is a medium-term savings vehicle, in addition to the other saving incentives that exist in our superannuation and saving system. The accounts will make a major contribution to first home owners. The government released a discussion paper on these accounts on 8 February and, following the release of the paper, the well-known financial commentator Scott Pape commended the policy to young aspiring homeowners:

… the FHSA rewards first home savers for developing a long-term savings plan.

…            …            …

… anything that instils the importance of savings at the start of a young adult’s life can only be a good thing.

I can report to the Senate that the consultation period closed last Friday, 14 March and we have received some 120 submissions. (Time expired)