Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Thursday, 13 September 1984
Page: 1234


Mr LEO McLEAY(1.19) —In the short time I have available I should like to draw the attention of the House to some anomalies that have been created by the changes to the first home owners scheme, and I am pleased to see that the Minister for Housing and Construction (Mr Hurford) is in the chamber today. At the outset I should say that he is to be congratulated for this most successful scheme, which has helped many people gain their own home. However, in my view, the changes that occurred recently have hurt some people on the margin.

There have been two recent changes to the scheme. The income limits have been reviewed for those whose contracts to buy or build a house were signed after 21 August. Following the review, the upper income limit of $27,900 will remain unchanged for families, joint applicants and sole applicants with dependent children. For those home buyers the maximum grant of $7,000 will still be payable. However, the people whose assistance has been changed to their detriment are those who are sole applicants. There will be no changes for families or for joint applicants, but for sole applicants there will be a considerable change. Their income limit will be half that of other applicants. The upper income limit will be $13,950 a year, with the full grant of $5,000 payable to applicants with incomes up to $10,000 a year. I might add that these limits are before tax is deducted. A person on $13,950 is not earning what one might call a substantial income.

I believe that the reasons for these changes are valid, and the Minister was quite right to review the scheme and change the income limits to ensure that assistance is targeted towards those most in need. I also recognise that the scheme is still the best first home owners scheme any government in Australia has ever put together. Indeed, the scheme might be said to have been too successful, and that has necessitated some of the changes that have occurred. While the Minister was right to change aspects related to those in need, he should consider those people who had already entered into arrangements to purchase a house prior to the date of announcement of the changes. Many people have come to see me in my electorate office and have written to me about problems they have encountered. They have paid a holding deposit on a house and have accrued legal fees because of the process of financial approval and conveyancing-a process, I might add, that can take up to six or eight weeks in New South Wales-and in some cases these people have lost their deposits.

I feel sorry for such people and I think the Government should have a look at whether any assistance can be given to them. In theory, they could have gained financial approval on the Monday or Tuesday of Budget week, rung their solicitors to go ahead with the transactions, and on the Wednesday the solicitors could have proceeded and committed the clients due to ignorance of the changes. The clients could have lost not only their legal fees but also the 10 per cent deposit because they were not able to go ahead with the purchase. They would already have lost the expensive legal costs involved in arranging finance and conveyancing and legal searches by their solicitors.

These people have quite obviously proceeded through the legal steps of acquiring finance and, in my view, the Government should consider them as special cases and see whether some assistance can be given to them. They can document their cases and show that they had made applications to lending institutions. They can show that they had paid holding deposits and that they had approached their legal advisers to begin the legal process. Their real problem is that they had not signed a contract by 21 August. I think that people who can show that they had genuinely begun the transaction should be given some assistance by the Government. In many instances they had been given approval for finance and they now find that with the loss of the grant to which they would previously have been entitled, they are not able to proceed. They lose the prospect of a house as well as the deposit they had paid and the legal fees they had accrued.

I have received a number of letters from constituents about this matter, and all of them fit into the category of applicants with no dependants. They are honest people who have been caught in the change. Other people less honest than they would have used the expediency of having their lawyers backdate the contract, thus ensuring that they could get the finance. The people who are honest and honourable have not done that and find themselves caught. They are the people I am hearing from and they are the people I would like to see get a fair deal. One of my constituents from the suburb of Ashbury complained that it was almost impossible either to save a deposit for a home or to be recognised as a genuine borrower by any lending institution. She had mostly good things to say about the scheme, as I do.

With 55,000 first home buyers last year being assisted under the scheme it is commendable and successful. It has been successful in encouraging low to moderate income earners to buy their first home and it gave many people who would never have had the chance or opportunity to get into the great Australian dream. It has stimulated construction and created more jobs in the industry. However, the changes that were made occurred overnight, as is normal with budgetary arrangements, with the new limits becoming effective immediately. Governments say that that is necessary to ensure that people do not take advantage of changes in arrangements, and I think that too is right. However, the Government should look at people who are caught in this shoulder effect. They have made a genuine attempt to raise finance and can document that attempt and have done everything except sign the contract prior to the date.

I ask the Minister whether these people, who in some cases have lost their deposit and in others have incurred significant financial costs, could be given a chance. Will the Minister consider the situation in which these people find themselves and reconsider the case of those who were in the final stages of exchanging contracts prior to the changes being made. I do not think that a great many people are involved but they are genuine and honest, and we should be attempting to give them a fair go.