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 THE FIRST HOME - A DREAM GONE SOUR. |
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Australia has long been regarded as the land of the great opportunity. For many decades the influx of migrants has been generated by the desire to settle in a country which provided every willing person with the opportunity to be successful, to own their own home and to bring up their children in a secure society.
Some of those opportunities still exist today. Australia still offers everyone the chance to be as successful as they want, and we certainly still have a stable and secure society which is the envy of many other nations. In fact Australia is one of the greatest, if not the greatest, democracies in the world.
However one important aspect that has been damaged, and particularly so in Victoria, is the ability of younger Australians to realise their dream of buying their own home. Home ownership is now out of reach for many young Victorians and this is happening at a time when interest rates on home loans are at their lowest for decades.
So what has occurred that has ruined the first home buyers dream? Have housing prices escalated to such a level that working families on an average income can no longer afford to buy or build a house? While the price of housing has risen, that increase cannot be regarded as the major reason why home loans to first home buyers in Victoria have declined from 26.8% of all new home loans in late 1999, to 14.6% in July 2003. What is puzzling is that this drop in loans to first home buyers has taken place during a period of improved employment and higher incomes.
Experts in finance and housing agree that the major factor in the drop of first home buyers is the huge increase in stamp duty by the Bracks Government. Many young Victorians have had their home ownership dream shattered by the stamp duty impost which now provides over 22% of all State taxation revenue. This $2 billion annual stamp duty windfall continues to grow higher and higher and is now raking in more than twice as much as it did 5 years ago. The Bracks Government now relies on stamp duty to keep their Budget in credit as its profligate spending shows no signs of abating.
Stamp duty on a median priced home in Melbourne is now well over $17,000, compared with $12,000 for a property in Sydney of the same value.
Locally the stamp duty rip-off is far worse than in Melbourne, with a median priced house in Mornington attracting stamp duty of $27,760, in Mount Eliza the tax is $29,560 and in Mount Martha buyers of a median priced house are slugged an astonishing $32,020.
With those sorts of tax demands from the Bracks Government it is little wonder that many first home buyers in Victoria are giving up on their dream.
All of this information about the affect that their stamp duty tax is having on the community is well known to the Premier and his Treasurer. Such is their indifference to the plight of home buyers that they still categorically rule out any chance of stamp duty relief.
Prior to the State election in November 2002 the Liberal Party put forward a detailed policy to provide stamp duty relief on all house purchases up to $580,000 in value. We continue to regard tax relief as a high priority and we have not let up on urging the Bracks Government to do something positive on this issue.
The approach of the Liberal Party stands in stark contrast to the uncaring attitude of Steve Bracks and John Brumby. We believe that stamp duty on real estate transfers must be brought down to a fair and reasonable level, and that this should be done immediately before the situation for all first home buyers becomes completely unsustainable.
10 September, 2003
