HON. WAYNE SWAN MP
FEDERAL MEMBER FOR LILLEY
SECOND READING SPEECH
"First Home Saver Accounts Bill 2008"
TUESDAY, 27 MAY 2008
***CHECK AGAINST DELIVERY***
First Home Saver Accounts will help bring the dream of home ownership closer to a reality for many thousands of young Australians.
Rising house prices have increased financial pressures on households and made it harder to save a deposit for a first home.
Home ownership is vital to the economic and social wellbeing of Australians.
It is a stable base from which to participate in society, and the primary asset for most families.
In recognition of this, we committed in the election campaign to introducing First Home Saver Accounts.
Today, the Government is delivering on that promise.
First Home Saver Accounts are the first of their kind in Australia and will provide a tax effective way for Australians to save for a first home to live in, through a combination of Government contributions and low taxes.
For example, a couple each earning average incomes, both putting aside 10 per cent of their income into individual First Home Saver Accounts, would be able to save more than $88,000 after five years.
The introduction of the Accounts will also help spark a new savings culture amongst young Australians.
The Government has undertaken an extensive consultation process and has improved the accounts in line with industry and community comment. The result is a policy that is fairer and simpler to administer.
The legislation for First Home Saver Accounts is contained in three Bills.
The main features of the accounts are as follows:
From 1 October 2008, accounts can be offered by banks, building societies and credit unions, public offer superannuation providers, life insurance companies, and friendly societies.
The Bill also provides a framework to prudentially regulate public offer superannuation providers.
Providers that are banks, building societies and credit unions; and life insurance companies will continue to be prudentially regulated under the Banking Act 1959 and Life Insurance Act 1995 respectively.
The Government is investing around $1.2 billion over four years in the First Home Saver Account policy, including administrative costs.
This is part of a package of measures costing $2.2 billion over four years to boost housing supply and assist those most in need; namely, first home buyers and renters on low and moderate incomes.
Full details of the measures in this Bill are contained in the explanatory memorandum.