When I went into 3AW last week to record our next ad, I was stopped in the corridors by one of the radio hosts and asked to comment on Joe Hockey’s statement about first home buyers affordability factor.
I responded accordingly.
I think the Treasurer has it wrong on so many levels. For one thing, our real estate for development sites have almost doubled in the last three years, which is going to make affordability of apartments and townhouses even more out of reach.
I don’t understand a government that doesn’t support first home buyers, when you consider that three years ago you could get up to $26,000 assistance, and today it is only $7,000 at best, with some stamp duty relief.
“Getting a better job” is a very un-Australian thing to say, in my opinion. But getting a second job is something that is within everyone’s reach. What we need is tax reforms for second jobs, because today tax is quite high.
I believe that Joe Hockey would get a lot more traction if he killed two birds with one stone. He could implement a cultural change overnight, and begin to reverse the current trend for our Baby Boomer parents who are funding their “adult children” theme in Australia.
Today parents are pumping in $22 billion dollars a year to help their “adult children” to makes ends meet. My criticism runs deep when “adult children” are living at home aged 27 plus and going out to wine bars ordering $18 cocktails by the dozens with their chorus of friends and then complaining to their parents about the price of housing.
What I would prefer to see is an incentive to lower the age of “adult children” back down to 18 – 21 years of age, rather than 30 years of age as it is today.
If Joe Hockey were to introduce a tax incentive for first home buyers that had an age limit, I believe we would incentivise the new generation coming through to take a bit more ownership on working and saving to buy a home. A bit like the travel incentive that we share with other countries. You can travel and work overseas on a travel visa until you reach the age of 27 years. Not all countries have joined this scheme, but the majority that our youth seek are partners with Australia.
I have observed over the years, that this scheme stimulates the younger generation to get their ‘savings in order’ by a certain age to fund the travel. I remember being in high school with my mates, and we were already planning on how we could fund our trips knowing we had an age limit. I think the age cut off was a real incentive.
If Joe Hockey was to create an incentive with tax aid, it would pass the responsibility back to our “adult children” to get their act together earlier rather than later. In order to get a loan these days, as a first home buyer, you need to have demonstrated savings. Even if you inherit a lump sum, you still cannot get the loan without the 12 months of demonstrated deposits as a first home buyer.
The incentive would work along these lines. We call for Joe Hockey to create an aged based incentive scheme that would have first home buyers register a bank account under the scheme, that would be a Deposit Driver account, that matures at 27 years, and has many benefits to drive that incentive forward.
The Government needs to step in and make the following incentives or changes available for Deposit Driver accounts;
- No, or little, tax on interest earned in deposit driver accounts.
- No, or little, tax on the second job whereby the funds are directed straight into the deposit driver accounts.
- No, or little, stamp duty on first home buyers homes.
- People who qualify under the arrangement will further qualify for a Government Backed Lenders Mortgage Insurance arrangement, whereby they only have to save 10 percent of the property amount to qualify for purchase.
- Cap the age for qualifying to 27 years.