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Tuesday, 7 August 2001
Page: 29288

Mr ROSS CAMERON (2:32 PM) —My question is addressed to the Treasurer. Would the Treasurer advise the House how this government's policies have made it easier for Australians to buy their first home?

Mr COSTELLO (Treasurer) —I thank the honourable member for Parramatta for his question. I think he would agree, as most people on this side of the House would agree, that one of the best things you can do for young Australian families is to help them buy their own home. I know that has been very important in the electorate of Parramatta, and I know that the new member for Aston will agree also that helping families with their homes, giving them that secure base, is one of the best things you can do to help Australians and their children.

This government has recently put in place a First Home Owners Scheme which gives people who have not owned a home before a grant of up to $14,000 for the construction of a new home. The grant can be used for any purpose, such as payment of mortgage, payment of deposit or maybe even fitting out some of the goods or chattels in that new home. The total value of grants paid to first home owners in 2000-01 was $1,057 million—that is $1,057 million out to the home buyers of Australia.

The second thing that you can do to help people buy homes is to get their income taxes down. We have not heard any questions about income taxes today from the Labor Party; we have gone off that issue. If it had not been for tax reform, a person on average wages in Australia, at $42,000 per annum, would now be on a marginal income tax rate of 43 cents in the dollar. Under Labor you would be paying 43 cents in the dollar for every extra dollar that you earned on average wages. Tax reform brought that down, and it brought it down to 30 per cent. So 80 per cent of Australians pay a marginal income tax rate of no higher than 30 per cent. Of course, that is why they are worried about this roll-backwards, which means roll up the income taxes right back to where the Labor Party had them.

Perhaps the best thing you can do for home buyers in Australia is have a policy of low interest rates. When this government was elected, interest rates on a home were 10½ per cent; today they are 6.8 per cent. The average Australian loan today is $130,000. This means that, from the time this government was elected to today, on the average Australian loan you pay $4,810 per year less in interest—that is $400 per month on the average Australian loan compared to 1996. If you want to go back to when the Labor Party last held the seat of Aston—and I know the honourable member for Aston used this to great effect during the Aston by-election—and interest rates were 17 per cent per annum, on the average Australian loan you were paying $1,105 per month extra of after tax money. Imagine paying $1,100 per month extra of after tax money on a marginal rate of 43c. You would have to earn $2,000 a month to put yourself back in that same position; that means a second job.

The findings of the Ashe Morgan Winthrop group, which were released yesterday, said that the federal home grants were driving the housing market in the smaller states. Ashe Morgan Winthrop said that the federal government first home buyers grants were driving growth in residential development in states such as South Australia, Western Australia and Queensland. It said that property investors in the larger states of New South Wales and Victoria tend to view the stimulatory effects of continuing low interest rates as the primary factor in their markets. So what can you do for Australian families to help them get on with their lives, look after their children and realise their ambitions? Provide lower income taxes, the first home buyers grants and lower interest rates—that is the most direct, practical way of helping Australia's young families that has yet been put into place.