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Tuesday, 14 October 2003
Page: 21309


Mr PEARCE (3:24 PM) —My question is addressed to the Treasurer. Treasurer, are you aware of any inappropriate payments by the Victorian government under the First Home Owners Scheme? What action does the Treasurer intend to take to ensure that taxpayers' interests are protected?


Ms Plibersek —They're your rules.


The SPEAKER —The member for Sydney! Has the member for Aston concluded his question?


Mr PEARCE —I would just like to repeat the last section. What action does the Treasurer intend to take to ensure that taxpayers' interests are protected?


Mr COSTELLO (Treasurer) —I thank the honourable member for Aston for his question. According to a Melbourne newspaper today, the Victorian government has paid out First Home Owners Scheme grants to 38 infants and toddlers below the age of 10. This is in clear violation of the Victorian government's undertakings, and the federal government will not tolerate the Victorian government abusing the First Home Owners Scheme.

By an intergovernmental agreement between the Commonwealth and the states, the states and the territories have agreed to make legislative provision for the First Home Owners Scheme and provide that eligible applicants must be natural persons who are Australian citizens or permanent residents who are buying or building their first home in Australia, and an eligible home must be intended to be a principal place of residence and occupied within a reasonable period. It is an absolute nonsense to suggest that a toddler could be buying or building a first home in Australia. In fact, it is an absolute nonsense to suggest that a toddler could sign a contract for the purchase of a home—which apparently the Victorian government legislation has made provision for. In addition, it is an absolute nonsense to believe that toddlers could be moving into their principal place of residence while they are three or four or under 10 years of age. So the Victorian government have admitted 38 people under the age of 10 to the First Home Owners Scheme, and they have done so in complete violation of the intergovernmental agreement between the Commonwealth and the states.

The Victorian Treasurer, Mr Brumby, according to AAP today, said that it appeared parents who were ineligible for the grant because they already own a home have been making applications in the name of their children. If the Victorian government has allowed people who already own a home to make applications in the name of their children and has paid them a First Home Owners Scheme grant as a consequence, that is an abuse of the system. Mr Brumby said today that he will be introducing legislation in the Victorian parliament to close the loophole which apparently exists in his own legislation. As far as the Commonwealth is concerned, that loophole should never have been opened by the Victorian government, and the Victorian government should never have paid First Home Owners Scheme grants to toddlers.

If it is the case—and I believe it most probably is the case—that the Victorian government has claimed from the Commonwealth reimbursement of the grants that it has paid to 38 toddlers, the Commonwealth will not be reimbursing the Victorian government for those amounts. In addition to that, if it has already been claimed and paid, the Australian government will be claiming that money back from the Victorian government, because the Victorian government was never authorised to claim from the Commonwealth reimbursement for First Home Owners Scheme grants to toddlers.

This afternoon I will be writing to the remaining states and territories alerting them to the fact that this has apparently occurred in Victoria and asking them to ensure that they have not claimed reimbursement for any such grants in their own states and, if they have, asking them to reimburse the Commonwealth accordingly. The Victorian government is apparently changing its legislation today to close this loophole which should never have existed. I point out to the parliament that not only does it have to be a natural person buying a home and intending to live in it as their principal place of residence, but the relevant states and territories have also covenanted to put provisions in their legislation to prevent abuse of the First Home Owners Scheme.

As far as the Commonwealth is concerned, this is an abuse of the First Home Owners Scheme. There should have been provisions in the Victorian legislation to prevent it, and the Commonwealth will not be reimbursing Victoria for any grants if they have been claimed from the Commonwealth under this scheme.