Friday, April 18, 2008

Rudd's dud plan for first home saver accounts

Jessica Irvine, in this morning's SMH:

"THE centrepiece of the Rudd Government's plan to increase national savings and make housing more affordable - its first-home saver account - is unfair, too complex and may not be available on time, according to a flood of submissions to a Treasury inquiry into the plan.

They say it is highly regressive, gives rich savers double the benefit of poor savers, makes no provision for a direct withdrawal of funds if someone's circumstances chang, its eligibility age of 18 is too high, and it may be too complex and costly for superannuation funds to set up by the proposed start date of July 1.

The Government has refused requests by the Herald to see the submissions, understood to number about 120, even though the deadline passed six weeks ago. The Treasury website said they would be treated as public documents unless otherwise requested.

But a number of submissions obtained by the Herald reveal a long list of criticisms from consumer groups, super funds and other financial bodies"...

Read the full thing:


Alan said...

Jessica, you have summarised the Rudd government, and for that matter the previous losing party of Libs, well – “HIGHLY REGRESSIVE”.

Not only is this proposed Saving scheme highly regressive, giving the biggest free kick to those who least need it, but policy announcement so much resembles the rhetoric of political fledglings – the Feudal Options (FO) party it is bordering on plagiarism.

This First Home Savers Account plan is the second plan announced this year that is intended to address Australia’s housing unaffordability.

Who can forget their first effort? On 04 March PM Rudd offered a $60,000 ($6000 x 10 yr) tax credit for residential property investors to build new dwellings.

Strictly speaking, the $60,000 tax credit is another example of the regressive nature of our political think tank. Or is that political rort tank?

Why was the $60,000 tax credit not given to FHO or home owners in general? Every person I ask that of says “YES, why didn’t they?”

The answer. The main parties now have an entrenched mentality, narrowly focused on their own interests, and the next generation can fend for themselves. Investors need rental milch cows, the more the better.

Another way of looking at the regressive $60,000 tax credit to investors is to say that it was a $60,000 slap in the face of potential home owners.

It is good to see a journalist questioning the latest hair brain scheme.

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