Legislative Assembly for the ACT: 2015 Week 08 Hansard (Thursday, 6 August 2015) . . Page.. 2421 ..
MR RATTENBURY (Molonglo) (11.11): This is a very simple bill, and it allows the minister to make a disallowable instrument to set the first home owners grant. At the moment the legislation prescribes what the amount should be, which is $12,500 currently. The intention of the Treasurer is to reduce the grant to $10,000 next January and to $7,000 the following January in 2017, as outlined in the budget papers.
The history of the grant is interesting, as it was originally introduced as a commonwealth scheme in July 2000 to coincide with the introduction of the GST to be administered by the ACT government. It was then $7,000. Realistically, that seemed to be about the amount to cover the cost of stamp duty. What happened, though, is that the first home owner grant was seen to be falsely pushing up house prices and not achieving what it was intended to do. The grant has since been increased to $12,500 in 2013 and reduced to only apply to new houses or substantially renovated properties, and thus form more of a subsidy to developers rather than a boost for first homebuyers. Although it was being used clearly as a stimulus for construction activity—so it was achieving what it was intended in that way—it was not necessarily helping low income first homebuyers.
The Greens have found this grant scheme to be dubious in this case, and we are pleased to see it is now being reduced in this way. This is the type of grant that would be better if it were means tested or targeted to particular types of housing. The Greens support initiatives that assist people to move into home ownership, and we would like very much to see a comprehensive plan that is effective, efficient, targeted, proportionate, and able to assist people improve their circumstances and enjoy the benefits of home ownership.
The ACT already has a much more targeted and effective assistance scheme, and this is the stamp duty concession scheme. The scheme is capped at the median price and is means tested, and we believe this is a much more effective way of providing assistance. As members are aware, the government is also working to considerably reduce stamp duty, which the Greens support as part of the overall changes to the taxation scheme. I believe that is a better approach than the one provided through the first home owners grant. On behalf of the Greens, I will be supporting this bill today.
MR BARR (Molonglo—Chief Minister, Treasurer, Minister for Economic Development, Minister for Urban Renewal and Minister for Tourism and Events) (11.13), in reply: I thank the shadow treasurer and Minister Rattenbury for their support of the bill. It is, as they have alluded to, quite straightforward. The only observation to make is that the government’s intention is to continue to monitor the effectiveness and the take-up of the grant in the context of the performance of the economy and the housing market over the longer term.
Mr Rattenbury has gone to the history of the grant; it has moved between $7,000 and $12,500 reflecting different points in the housing and economic cycle. The government will continue to monitor where we are in those respective cycles in making decisions about future levels for the grant. I thank members for their support of this bill.