Second Reading SpeechSenator Sherry (Minister for Superannuation and Corporate Law)
Rising house prices and higher interest rates over the last three years have increased financial pressures on households and made it harder to save for a first home.
Home ownership is important to the wellbeing of Australians. In recognition of this, in the 2007 Federal election campaign, we announced that if elected, we would introduce First Home Saver Accounts.
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 in which to live through a combination of Government contributions and low taxes.
For example, a couple each earning average incomes and 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.
Today, the Government is introducing Bills to implement some final parts of the scheme already passed in this place in June 2008.
The two Bills are the First Home Saver Accounts (Further Provisions) Amendment Bill 2008 and the First Home Saver Account Providers Levy Imposition Bill 2008.
The First Home Saver Accounts (Further Provisions) Amendment Bill 2008 includes various provisions to make the scheme operational. These include:
- a system for dealing with unclaimed money;
- amendments to secrecy and information sharing provisions between the ATO, APRA and ASIC; and
- dealing comprehensively with family law situations.
Other amendments are also being made to ensure the accounts work as intended.
The changes also introduce a framework for imposing a levy on FHSA providers to provide funding for the Australian Prudential Regulation Authority to carry out its supervision of financial institutions which offer FHSAs.
The levy is consistent with the existing financial sector levy framework that funds APRA's supervisory activities on a user-pays basis, and is modelled on the Retirement Savings Accounts supervisory levy.
Consistent with the existing financial sector levy framework, these Bills do not prescribe the amount of levies that will be imposed, as this is assessed each year and made by a Ministerial determination.
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.