Take-up of First Home saver Accounts small, money remains unspent

The target of 730,000 accounts by mid-2012 now looks laughable. But the Government is still putting money aside for the scheme, almost all of it unused – $130 million for this current financial year and $226 million for the next.

Opposition housing spokesman Scott Morrison said the money could be better spent elsewhere, and not on a scheme which is clearly unpopular. He called the scheme a hollow log the Government should raid to pay for more worthwhile projects.

I have never used the first home buyers. I bought a house a few years ago with a girl who had already owned. A few months…

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Brett of Adelaide

He said a cancelled scheme could have provided “$700 million of debt reduction or insurance against the cruel cuts to the Medicare safety net”.

“Responsible financial management is about staying on top of your program,” Mr Morrison said.

“This program is chronically underperforming and the minister should have identified this as a saving measure before the Budget.”

Several factors have limited take-up of the scheme, including the end of the housing boom.

The 4.25 percentage point cut in interest rates, the increase in the First Home Owners Grant and the falling prices of real estate have encouraged young buyers to get into the market quickly.

They aren’t prepared to wait out the slower timetable of the First Home Saver Accounts.

But Mr Morrison also believes the scheme has languished because the process of getting one of the accounts is so complicated, and financial institutions are so uninterested in promoting them.

He said the scheme had failed to generate in six months what the Government said it would in just one week when it came to savings in accounts.

A spokesman for Treasurer Wayne Swan declined to comment.