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House of Assembly - Fifty-First Parliament, Third Session (51-3)
2009-10-14 Daily Xml
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FIRST HOME OWNER GRANT (SPECIAL ELIGIBLE TRANSACTIONS) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 9 September 2009. Page 3756.)

Mr GRIFFITHS (Goyder—Deputy Leader of the Opposition) (12:02): It is my pleasure to make a contribution and to indicate that I am the lead speaker on the First Home Owner Grant (Special Eligible Transactions) Amendment Bill. I also confirm that the opposition will be supporting the bill without amendment.

There is no doubt that in recent times governments of all persuasions, be they federal or state, have supported enormously the opportunity for young people and first home buyers to get into the home market. It is part of the Australian psyche. There is a desire, I hope, for every young person to purchase a home, to own a home and to be a part of Australia's property tenure to ensure they have a roof over their head that they are responsible for. For many, that opportunity is taken away through a variety of circumstances but, for the majority of people, for decades now and for generations, it has been an opportunity that has been pursued with vigour; and I commend everybody who has taken up that opportunity.

I remember building my first home in 1984 and the pleasure that brought me. Grants were not available in those days, but they are now. This bill amends the First Home Owner Grant Act 2000.

The Hon. K.O. Foley interjecting:

Mr GRIFFITHS: Must have been. The Treasurer points out that he thinks they were available.

The Hon. K.O. Foley interjecting:

Mr GRIFFITHS: Okay, that was a silly ignorance on my part at that stage. This bill is designed to provide the Commissioner of State Taxation with greater flexibility in dealing with the discretions relating to the eligibility of the federally funded First Home Owners Boost and the state government funded First Home Owners Grant.

The boost was a decision by the federal government to extend on 14 October 2008, with the intention of finishing regionally on 30 June this year, but as part of the federal budget announced on 12 May this year the decision was made to extend it in two stages: the full level until 30 September—and there was a lot of publicity about the fact that many in the first homeowners market were intending to make purchases by that date—and a 50 per cent level of that grant from 1 October to 31 December.

The bill aims to provide legislative backing for the First Home Owners Boost, and I will give members some history on that. The First Home Owners Boost provides $7,000 to first home buyers purchasing an established home or $14,000 for people entering into a contract for a newly constructed home before 30 September, and those figures are reduced by half for the period from 1 October to the end of December. This has resulted in a significant number of contracts being entered into.

I reviewed some figures probably six months ago where concern was expressed in recent years about the decrease of first home owners into the residential market. I think in the early 2000s it was about 18 per cent of home purchases, and it had dropped down to the 12 or 13 per cent range. I could be corrected on that, but I am advised that, as a result of the boosts both state and federally, that market percentage has increased and is back into the 19 or 20 per cent range. So, that is a good move. It shows that there are young people out there who have confidence in the future of home ownership in South Australia and in Australia and that, even with the economic uncertainty that exists and with many people concerned about their future with respect to employment, people are going out there and taking the opportunity to purchase a home.

We need to do that because, on the documentation that has been presented about population growth in South Australia (and that is something that I welcome and encourage, with the two million mark being set, I believe, in the early 2030s), we have an average occupancy rate in the range of about 1.85 people per home, or thereabouts. If we are to house an additional 400,000 people, in round figures we need a little over 200,000 homes. There will naturally be some people who currently own homes who move into other properties—to either upsize or downsize—but a large percentage of those will be young people coming through the system and those who are taking up the opportunity to purchase a home for the first time.

It is important that this bill is in place because, in the short term, before 31 December when the boost runs out completely, there needs to be some flexibility for the Commissioner of State Taxation (and I commend the fact that the commissioner is exercising flexibility on that) to review the circumstances to ensure that the completion date will be within the 26 weeks, as the contract will demand, but also to recognise that on some occasions it is completely beyond the control of the home purchaser to have their home built within that 26 week period. So, the commissioner's being able to exercise some flexibility will ensure that people in those circumstances are not disadvantaged and still have the opportunity to access at least that 50 per cent of the boost that will remain until 31 December for contracts that are entered into.

The bill will allow the commissioner to vary legislative time periods relating to the eligibility criteria of the First Home Owners Grant and give the commissioner the flexibility to consider whether to write off a liability. In the briefing, I asked a question about where a liability might be in place, and I believe (I stand to be corrected) that it could be in a circumstance where a grant had been supported but then evidence might have come about that the conditions attached to that grant were not necessarily being met. My understanding is that occupancy needs to take place within the first 12 months for at least a six month continuous period for people to be eligible for the grant.

Some press has been circulated about young people who are looking to build up a real estate portfolio, who meet the criteria and access the grant, but then go back into shared accommodation. I understand that is occurring. My preference would be for people to take up this grant and reside in those homes permanently to give them the chance to have a roof over their head.

A point was also made to me in a general debate that I had with some people about this bill. An example was quoted to me of a two year old child who, for some reason, was put onto the property ownership records of a property. That property was later sold by the parents, who were also involved in the property ownership. When that child had matured and become, as they thought, eligible, because they were not aware of this previous property ownership, they were then actually ineligible to attract the grant.

The only circumstance that I could directly think of in that respect was holiday homes that people would have owned that were shared as shack site leases in coastal areas. However, that did not involve permanent tenure; it was a lease. The Treasurer might have an explanation about where, indeed, this circumstance has been met. Presumably some people have been caught up in this crazy situation. They have no real memory of the fact that, for whatever reason, they have been part of a property ownership as a child and now, when wanting to access the grant, they are not able to do so. I understand that an objection opportunity is in place whereby an applicant has been deemed not to be compliant with that, and that is certainly appropriate.

It is important that we all have the opportunity to have decisions reviewed, so I am pleased that that will also be part of the bill. I want to put on record my thanks to the Treasurer's staff and to the departmental staff who briefed me on this. The briefing did not take a long time because it seemed fairly obvious to me that this matter should be supported. However, I thank them again for their support in answering any questions that I had. This bill certainly will assist people before 31 December to enter into a contract in the knowledge that, if it is a first home purchase, they have the opportunity get some money which is available to them and which has been in the market for several years now.

Certainly, I recognise the fact that state support is continuing and that this bill relates only to the federal government funds which were part of an impetus announced quite some years ago to support the continuing opportunity for our young people to get into home ownership. With those brief comments, I confirm again that the opposition will support the bill without amendment, and I look forward to its swift passage through the house.

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (12:20): I thank the honourable member for his contribution. Obviously, this scheme was one of a suite of emergency measures put in by the Rudd government to stimulate building activity at the beginning of what was clearly going to be a significant economic downturn, and it has fulfilled that task exceptionally well. There will be ramifications. There was a degree of pull forward and there will be a degree of readjustment in the market as this unwinds.

I thank the honourable member for his comments. On that issue of the two year old, I am not sure whether that is the right analogy. I preface my comments by saying that there have been many incidents where the tax commissioner and/or his staff have made what, on the surface (and perhaps even below the surface), appear to be very harsh decisions when it comes to eligibility. Let us bear in mind that the state tax office is given the task of overseeing the implementation of these schemes but with very strict guidelines from the commonwealth. It is our officers interpreting the requirements of the commonwealth government, which is providing the money.

The commonwealth government has been extremely strict in its criteria for it. If there was any previous interest in a property, that person was simply not eligible. You really have no other way of doing it because, if you start to introduce ambiguity or a degree of flexibility in the interpretation, it becomes a very slippery slope. In a perfect world they probably should have got access to one of these loans, but we have taken advice, as required by the commonwealth (initially from the commonwealth Liberal government and now the commonwealth Labor government) to adhere to very strict criteria.

On the issue of the two year old, as I have said, I am not sure whether that is quite the right analogy. What has occurred is that adults of today who are wanting to take advantage of a tax break to get into home ownership have been deemed ineligible because their parents, 15 or 20 years earlier, availed themselves of a tax break by putting their child or another family member on a title of a property to avoid land tax, for example. Members will recall some years ago now—and this created some angst—that we closed a legitimate loophole (other states had closed it off) whereby people were able to apportion property they had purchased in the name of a family member to avoid paying land tax.

My guess would be—and I am looking at my officers to get a nod, yes or no—that if a home owner, an adult, previously had put a child on the title to avoid paying land tax (or some other tax) at the time, they would then be ineligible for this home owner's grant.

Mr Pengilly interjecting:

The Hon. K.O. FOLEY: It is an issue of equity. If the parent took advantage of a way to minimise their tax bill two decades earlier, good luck to the parent, but the penalty unfortunately for the child as he or she has got older is that they have had an interest in a property, even if they did not even know it, because the old man was getting a bit of a tax break 20 years earlier. Officers, is that a reasonable analogy? I have one nodding and one shaking his head. I had better take some further advice. As always, good, frank and fearless advice: we—these officers—do not have an opinion or a view as to why someone would put their two year old on a title, because our Treasury department and our tax officers are not allowed to have moments of flight of fancy of their opinions on what they reckon the motivation was. They just have to look at everything in black and white.

I just happen to think that, if someone has put their two year old son's name on a title, they have done it for tax reasons, not through a generosity of spirit where they somehow want to be able to put a title on a wall with their kid's name on it. That is all good and well. There was a day up until recently where that enabled someone to avoid paying land tax; therefore, the parent took advantage of the tax system. We take the view now, quite properly, that they had an interest in a property, whether they like it or not. That is really it.

So, when a constituent complains, tell them to go home and say that the old man owes them about five or six grand. But then again, if they have left a holiday home in their will, they should probably just shut up and accept the fact that they are going to do very well out of the old man's investment some years earlier. That may not always be the case, but that is an explanation for that. It is very difficult. I have had a number of cases where MPs and constituents have written to me about that very point: that they had no idea their parents had them on a title some years earlier. That property may no longer exist in the family, for whatever reason.

It is a pretty brutal realisation and decision by our people. What I have learnt in this job—and I sincerely hope that one day, but not too soon, you have a chance to do this job; in about 20 years—is that, what you will find is that you just have to make hard decisions. You have to accept that there is no grey in most things when it comes to deciding who is eligible and who is not, because the minute you enter into consideration of who may or may not be eligible, you just set a precedent, and there will always be another one coming up behind it. Sometimes it is better to just say, 'That's the law. That's it!'—no flexibility. I am romancing now. I thank the member opposite and the opposition, and I move that this bill now be read a second time.

Bill read a second time and taken through its remaining stages.

Mrs GERAGHTY: Madam Deputy Speaker, I draw your attention to the state of the house.

A quorum having been formed:

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