Page 2032 - Week 07 - Thursday, 4 June 2015
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First Home Owner Grant Amendment Bill 2015
Mr Barr, pursuant to notice, presented the bill, its explanatory statement and a Human Rights Act compatibility statement.
Title read by Clerk.
MR BARR, (Molonglo—Chief Minister, Treasurer, Minister for Economic Development, Minister for Urban Renewal and Minister for Tourism and Events) (10.18): I move:
That this bill be agreed to in principle.
The First Home Owner Grant Amendment Bill 2015 makes amendments to the first home owner grant legislation. The first home owner grant was initially introduced from 1 July 2000 and provided a $7,000 grant to help support eligible first homebuyers to purchase their first home and to offset the introduction of the GST. Since that time, the economic environment has changed and the first home owner grant has been retargeted in order to best support the economy and first homebuyers.
For example, in most Australian jurisdictions the first home owner grant now only applies to new or substantially renovated properties, thus stimulating construction and, importantly, increasing the supply of housing. The ACT, in 2013, retargeted its first home owner grant to new and substantially renovated properties and the grant amount was increased as a stimulus measure from $7,000 to $12,500.
Economic stimulus measures such as these were important and necessary to support the ACT economy at a time when the commonwealth was contracting and drastic cuts to commonwealth jobs in the territory were expected and delivered, but which significantly harmed confidence in our economy. The increased grant, in conjunction with conveyance duty concessions, provided an economic stimulus for first homebuyers in the territory to buy their first home and help sustain our building sector.
As the scale of these sweeping job cuts appears to be on the ease, it is important that the government review the objectives of our stimulus measures and continue to recalibrate the first home owner grant, balancing fiscal restraint with the willingness to support first homebuyers, especially in this period of record low interest rates.
As part of the 2015-16 budget, the first home owner grant amount for each eligible transaction will be gradually reduced over the coming years, to $10,000 from 1 January 2016 and back to the original $7,000 from 1 January 2017. This is a gradual withdrawal over 18 months of a stimulus introduced in 2013.
These changes will ensure the ongoing sustainability of the scheme, which is experiencing record costs, around $7 million higher than forecast in the 2014-15 budget. This return to the previous level of $7,000 reflects the end of the stimulus period from 1 January 2017. The grant amount is currently specified within the First Home Owner Grant Act. The First Home Owner Grant Amendment Bill 2015 will remove the grant amount from legislation and allow the minister to determine the grant value in a disallowable instrument.
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