Page 2596 - Week 09 - Tuesday, 25 September 2007
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MR DEPUTY SPEAKER: Just before we proceed, my apologies to Mr Seselja. Your body mass index looks nothing like Mr Stefaniak’s!
DR FOSKEY (Molonglo) (11.36): I will be supporting the bill as well. I do feel that the bill could have gone further, and I would like to address those issues here. The booming property market means that a level playing field is no longer realistic, and the government must implement policies to help first home buyers and low-income earners to get a foot in the door of home ownership. As such, we must explore options which give home buyers an advantage against investors. The extent to which the ACT government can influence this is possibly broader than in terms of land tax and stamp duty, but those are certainly measures that the government can use to produce a more nuanced response in the market, and I believe that this bill does not explore the full potential that they offer.
In principle, the Greens will support any initiatives that improve housing affordability, and to the extent that this might be achieved by these amendments, I support these amendments. Nonetheless, it is fairly clear that one of the bases for this bill was to ensure that there was a minimum of revenue forgone. To the extent that the deferred duty payment scheme will make it easier at the time of purchase when there are lots of other expenses, we applaud the initiative. However, it has to be noted that five years down the track when it comes to repaying the debt, which has accrued interest over that time at market rates, I believe, home owners might not find themselves in such an enviable position.
The key issue is: at what rate will interest be charged? Leaving it to the minister’s discretion is very broad. Will the rate be reflective of the market rate or discounted to some degree? If so, the scheme may be of little advantage to potential home buyers. As there are no guidelines as to the interest rate, we are left to assume that they will largely correlate with market rates, although one would hope that there is some discount, given the target market and the desired outcomes. One has to ask the question: if this is the case—and it therefore means that the government will be forgoing some revenue—why not simply reduce the rate of stamp duty payable by first home owners?
To the extent that this has already been done, we support it. But I cannot see the rationale in just loading first home buyers with greater debts. It is very likely that not only will they have a very large mortgage, many will also still have a HECS debt and now a stamp duty debt, not to mention the debts on their furniture and other necessities that they might have had to pay for by hire purchase in order to furnish their new homes. If the interest is significantly discounted, then why not just extend the current stamp duty concessions? Given that it is getting harder and harder to buy a house that attracts a significant discount as house prices continue to climb, it would be appropriate to adjust the thresholds and/or the rates and also ask why we should not make the deferred payment scheme applicable to existing houses, rather than just limiting it to new developments.
There are still, though perhaps for not much longer, a number of existing houses selling for less than the home buyer concession scheme discount threshold at $365,000. The simplest measure that would deliver a clear benefit to home buyers
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