Domain’s Jenny Duke has penned a piece bemoaning that the Budget did not go to greater lengths to assist first home buyers (FHBs) into the market:
…the much-awaited savers scheme for first-home buyers… [allows] young Australians to make contributions into their superannuation for future use as a deposit.
The only problem is the scheme falls a little short of what first-home buyers might have been hoping for, allowing a maximum of $30,000 plus earnings to be used for the purpose of a deposit.
In Australia’s most expensive market, Sydney, a 10 per cent deposit on even half of the median house price would be $57,500. Add stamp duty and other costs and this suddenly doesn’t look too generous. It’s a similar story in Melbourne.
And that’s provided first-home buyers opt to use it. A previous scheme was scrapped due to its lack of uptake, though it did require first-home buyers to keep their funds in a separate account for a much longer period of time…
But what about those hoping to buy a first-home within the forseeable future?
Even without a silver bullet, there should have been more decisive changes for those wanting to buy in the next few years.
I must admit, my first response to the Budget’s housing measures was relief – relief that it will not throw too much good money after bad and artificially inflate housing even more.
Fortunately, the re-gigged First Home Savers Account is, like its predecessor, is rather weak. It’s only expected to cost the Budget $250 million over the forward estimates (see below) – probably an overstatement given Labor’s scheme had such a poor take-up rate and just 2% to 3% of young people currently salary sacrifice additional funds into superannuation.
I was also relieved that the Budget’s bribe for baby boomers to downsize was very modest. As shown below, its direct cost to the Budget would be just $30 million over the forward estimates, and any funds accumulated would still apply against the assets test for the Aged Pension.
The truth is, MB expected the Budget’s housing measures to be much worse, so we were relieved that they ended up being Mickey Mouse.
While we would still love to see the Coalition take concrete action on housing affordability, such as unwinding negative gearing and the capital gains tax discount, providing incentive payments to the states to free-up land supply and planning, and cutting immigration, at least the Budget did minimal harm. And for that we should all be thankful.
