Fed: First home buyers none the wiser on grant's future

AAP General News (Australia)
04-24-2009
Fed: First home buyers none the wiser on grant's future

By Colin Brinsden, Economics Correspondent

CANBERRA, April 24 AAP - Potential new home buyers will head into Saturday's Anzac-shortened
house viewings none the wiser about the future of the government's more generous first
home owners grant.

Should they buy anything or hand over any cash now to ensure they make the June 30
cut-off for the increased grant, or will there be something in the May 12 budget that
extends it in some form?

Prime Minister Kevin Rudd was sticking to his line that "all good things must come
to an end" when quizzed on the issue on Friday.

However, Finance Minister Lindsay Tanner said the grant, along with a number of issues,
is something that the government was still actively considering for the May 12 budget.

Opposition Leader Malcolm Turnbull said the government was sending out too many mixed
messages on economic measures, including the home owners grant.

"There seems to be a state of confusion about what they are going to do in the budget,"

Mr Turnbull told reporters in Darwin.

Adding to the speculation about the future of the grant, News Limited newspapers said
the scheme could be revised in the budget to favour new home construction over purchases
of existing homes.

The $1.5 billion scheme formed part of the $10.4 billion economic stimulus package
announced in October last year.

The grant to first-time buyers of existing houses was doubled to $14,000, and raised
to $21,000 for those buying new housing stock.

Industry groups want the scheme extended beyond June 30.

Queensland's Master Builders industry group is urging the government to keep the more
generous scheme to boost activity and employment in Queensland's building and construction
industry.

"We consider an extension of the (grant) would be in the best interests of the Queensland
economy and would assist in protecting the jobs of thousands of Queenslanders," Master
Builders Director of Housing, Darren Barlow said.

Official data shows that first-time buyers made up a record 26.9 per cent of granted
home loans in the first few months of this year.

Building approvals too have started to grow after months of decline.

"It's been a big help," Mr Rudd told the Fairfax radio network.

Mr Rudd clarified that the basic $7,000 grant was likely to continue.

He rejected opposition suggestions that the grant had served only to push up home prices
through boosting demand while doing nothing to increase the supply of homes.

"When we looked at this decision for government last October, it was very practical
- how could you reduce the impact of this recession on Australia," he said.

"This boost, as the industry has told us and many people have told us, has helped keep
our housing construction figures up when the rest of the world has actually been falling
in reverse."

Despite its success, Mr Tanner said the increased grant, as it stands now, will end
on June 30. But that issue, along with a number of others, is something that "we're still
actively considering".

"And because the economy has deteriorated even further over the past few months as
a result of the global recession, then clearly there's a lot of issues that we have to
give some further examination to. That's just one of them."

Opposition treasury spokesman Joe Hockey warned that caution was needed in extending
the grant at a time of rising unemployment, which could see up to 300,000 people out of
work.

"It might be great to stimulate and distort one part of the economy," Mr Hockey he
told ABC Radio.

"But if it means that those poor buggers are going to end up unemployed and default
on their home loan in 12 or 18 months' time through no fault of their own, then this will
be seen to be a mistake."

AAP cb/jl/jlw/

KEYWORD: HOME WRAP

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