First homebuyer grant scrapped in Tasmania

First homebuyer grant scrapped in Tasmania

Posted on Friday, May 24 2013 at 2:27 PM

The Tasmanian Government will scrap its First Home Owners Grant for established properties and wind down a boosted incentive for new builds, as part of its frugal 2013 Budget.

The government believes it can get the
balance sheet back in the black in four years’ time, despite recording a record
deficit this year of $425 million.

In handing down the State Budget yesterday,
Premier Lara Giddings outlined her plan to carve a path back to a surplus.

Two cost-saving measures include the
abolishment of the First Home Owners Grant, a $7000 bonus for purchasers of any
property, and the winding back of the $8000 First Home Builder Boost for new

They’ll both be replaced by a single $7000
grant for first-time buyers of a new home only. The change comes into effect
from July 1.

The Mortgage and Finance Association of
Australia (MFAA) slammed the move, describing it as “a disaster for Tasmanian
young homebuyers trying to break into the property market”.

The body’s state president, Bryce Harding,
believes the grant rejigging is a “poor decision” made purely to help balance
the books.

“Not all first homebuyers can or want to
build their own home and this decision will make it even harder for young
couples and single people to put a roof over their heads and plan the future,”
Harding says.

Giddings blamed the state’s ballooning debt
on GST revenue losses, downgraded state taxes and the bill for disaster
recovery in the wake of the devastating January bushfires.

The only other piece of housing-related
news was an additional $500,000 in funding to continue a major overhaul of the
state’s planning system.

Reforms focus on reducing costs and
breaking down barriers to development and boosting housing supply, Minister for
Planning Bryan Green says.

“These reforms will minimise costs for
builders and developers by increasing the consistency, clarity and certainty in
the planning system,” Green believes.

This new funding will enable the Tasmanian
Planning Commission to push through its assessment of revised planning schemes,
he says.

Despite its debt burden, the government’s
election year fiscal plan includes funding contributions towards the Federal
Government’s major education reforms and the DisabilityCare insurance scheme.

There will be a renewed emphasis on jobs in
the year ahead, the government says, as Tasmania continues to battle a stagnant
economy and rising unemployment.

“(The Budget) provides funding for a range
of initiatives in the Tasmanian Jobs Package, as well as the first increase in
the payroll tax threshold since 2000 and grants for businesses that create jobs
through innovation and investment,” Giddings says.

There’s funding for new infrastructure in
the areas of health, education and irrigation, she says.

While Giddings says “continuing financial
discipline” will be the medicine that cures the Budget’s widening debt black
hole, projections for a surplus in 2016-17 are based on what commentators have
described as overly optimistic growth forecast.

The government forecasts trend economic
growth in 2013-14 will be around two per cent.

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